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Last edited 26 Jan 2024

Corporate social responsibility in design and construction

[edit] Origins of the term corporate social responsibility

The term Corporate Social Responsibility (CSR) was coined by the American economist Howard Bowen in his book Social Responsibilities of the Businessman (1953), which possibly started discussions regarding business ethics and social responsibility. Today, he is generally considered the father of CSR, and his ideas gained some traction regarding the morality of the way companies behave towards society in the 1950s and 1960s, which coincided with the gradual expansion of some companies into large conglomerate corporations.

[edit] Background and development of CSR

[edit] 1970s

The moon landing in 1969 produced the first image of the globe from outer space, which in many ways marked a milestone for the environmental movement, one inherently connected to social responsibility and coupled by the image of a single planet. The first Earth Day was held one year later. The 1970s were marked by significant legislative changes in relation to environmental protection, with the first United Nations Conference to make the environment, or what was called the human environment, a major issue. It was held in Stockholm in 1972 and resulted in the Stockholm Declaration and Action Plan for the Human Environment and several resolutions. Other changes included the formation of the Environmental Protection Agency in the US, the Department of the Environment in the UK, the launch of the Green Party, the Clean Air, Clean Water and the Endangered Species Acts and so on.

[edit] 1980s

Although many of the changes of the 1970s centred particularly around the environmental movement, as opposed to social movements per se, the connections and links between these fields in terms of responsibility or morality had started to become clearer. In many ways, the 1980s acted to more readily define these, in particular via the World Commission on Environment and Development (WCED), set up in 1983, which published its key report in 1987. Entitled Our Common Future, this report came to be known as the 'Brundtland Report' after the Commission's chairwoman, Gro Harlem Brundtland. This report clearly defined the idea of sustainable development with social aspects sitting equally alongside environmental and economic reinforced at its centre by the definition 'Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs” (United Nations, 1987).'

[edit] 1990s

The connection between social impacts as a result of climate change became ever clearer through the 1990s, with the Agenda 21 adopted and the Kyoto Protocol setting binding targets for 37 industrialised countries and the European community to reduce GHG emissions. This was coupled again with the increasing globalised nature of business and corporations, in particular the numbers of MultiNational Corporations (MNC). By the 1970s there were around 9,000 MNCs globally, by the 1990s 30,000 (in the 2010s the UN estimated this figure to have risen to over 100,000, with control of over 900,000 affiliated companies). So global perspectives on CSR became a driver for impact through a variety on initiatives.

[edit] 2000 on

An inventory of sustainability-related city networks by Keiner and Kim (2007) showed a boom between the launch of the UN Agenda 21 and the passing of the United Nations Millennium Declaration (2000). These were accepted as a way to support local action on a transnational scale. From the millennium onwards the increasing number of initiatives that supported broad networks of businesses and organisations in setting targets relating to both social and environmental indicators and reporting on these. The Millennium goals were launched at this time a time where world leaders unanimously committed themselves to fight poverty and hunger, gender inequality, environmental degradation, and HIV/AIDS, while improving access to education, health care and clean water by 2015.

The Sustainable Development Goals (SDGs) were born at the United Nations Conference on Sustainable Development in Rio de Janeiro in 2012. The objective was to produce a set of universal goals that meet the urgent environmental, political and economic challenges facing our world. The shifts in the role of digitisation and technology as a cross-cutting theme of innovation, that incorporates the sustainability agenda were supported by the Lisbon agenda as opportunities for a knowledge-based economy. In around 2014 the UN published their Smart Sustainable Cities Reconnaissance Study, a useful reference for the growing landscape of programmes around the world, that included a definition of the Smart and Sustainable city.

[edit] General principles of CSR

Definitions of CSR vary, as do the types of key performance indicators used to evidence and measure impacts. The Sustainable Development Goals are a set of higher level international goals, though elements of these can in turn link back to CSR policies. In general, however, CSR expresses a fundamental morality in the way a company behaves towards society. Promoting ethical behaviour towards stakeholders, it recognises the spirit of a legal and regulatory environment looking to positively impact the wider society rather than simply generating profit. The overall impact of a company is determined by what it produces, the environmental impact, its recruitment and training processes, its adherence to rights and values, its investment in the community, and so on.

CSR responsibilities might be expressed in terms of a variety of general categories with social and environmental aspects crossing through economic, legal, ethical and philanthropic responsibilities or in some cases legal responsibility crossing all four with environmental as the fourth. Others look at CSR in terms of social obligations, social responsiveness, and social responsibility.

[edit] CSR aligned design and construction

The culture of a company, be it in design or construction, as perceived by society as well as by the company itself, is often determined by the principles of CSR that it follows. There can be considerable damage, in terms of PR as well as potentially financial impacts, if a company fails to fulfil obligations in terms of health and safety, the environment, human rights, gender discrimination, and so on. Surveys often show that people believe a company to be a ‘good employer’ if they have established links with charities, schools, or other local community groups. In addition, companies that are open and transparent in their reporting on CSR are generally viewed more positively by their stakeholders. In general,CSR helps build wider trust and confidence in a company from stakeholders and society.

Construction companies are often challenged to do more in this area and have, in the past, made great strides to improve, particularly with regard to health and safety. However, the industry as a whole has a generally poor record on employment and diversity issues, with women and ethnic minorities being consistently under-represented. A 2016 survey found that women make up only 11% of the UK construction workforce and just 1% of on-site workers.

[edit] How construction companies can incorporate CSR

Construction companies can incorporate CSR in many ways, increasingly there may also be a need to evidence and report this accordingly if used as a element of publicity, but in simple terms there are several ways to help improve activities that relates to CSR such as:

Well-designed buildings that improve quality of life and wellbeing.
Supporting education programmes.
Supporting local community groups.
Giving time or other resources for charitable activities.
Good design and construction of community spaces, such as lighting, cycle paths, landscape, and so on.
Responsible purchasing.
Minimising waste.
Internships and work experience programmes.
Supporting apprenticeships.
Flexible working for employees.
Work-from-home plans, gym memberships, subsidised public transport, and other employee benefits.
Improved hiring practices.
Career management, mentoring, and training programmes.
Paying the living wage to all employees.
Minimising payment delays to subcontractors in the supply chain.
Energy efficiency initiatives.

There are also a wider variety of construction related initiatives and city networks that started to set, support, and promote improvements in the way that buildings were built many focussing on energy and carbon emissions (which has socially relate consequences) but also more directly covering social impacts. Examples of these are many but might include BREEAM, Passivhaus, LEED, Level(s) etc. At the same time selection of materials and products used in buildings with third party certification can further more add further assurance of the environmental and social impacts of the projects in line with the principles behind CSR.

[edit] CSR-related terminology

Today, there are many terms that relate to the essence of what corporate social responsibility is concerned with, including socially responsible investing, corporate sustainability, corporate citizenship, corporate social impact, and corporate responsibility. Responsible business conduct (RBC) as well as environmental,social, and corporate governance (ESG), selected Key Performance Indicators or SDG aligned CSR. While the term continues to express fundamental morality in the way a company behaves, it is increasingly incorporated into policies, and as such, more formal definitions, along with its correct use, appropriate measurement, and evidencing, might be required. Here are some of the variations in terms of definitions from different bodies:

[edit] Social responsibility under the ISO

The International Standards Organisation (ISO) 'Guidance on social responsibility' (ISO 26000) defines social responsibility as "the responsibility of an organisation in relation to the impact of its decisions and activities on society and the environment, through transparent and ethical behaviour that contributes to sustainable development; including the health and well-being of the society; takes into account the expectations of stakeholders; complies with applicable law while being consistent with international standards of behaviour; is integrated throughout the organisation and implemented in its relationships".

[edit] The UN Global Compact

The related but different initiative the UN Global Compact is a principle-based framework that has been developed for businesses, which states ten principles in the areas of human rights, labour, the environment and anti-corruption to which business members sign up voluntarily. Many of the principles are aligned with the ideas behind Corporate Social Responsibility, ethics, transparency and accountability.

[edit] Responsible business conduct under the OECD

The inter-governmental Organisation for Economic Co-operation and Development (OECD) which works in close cooperation with business, trade unions and non-governmental organisations, refers to the term Responsible business conduct (RBC). The OECD defines RBC as "making a positive contribution to economic, environmental and social progress with a view to achieving sustainable development and avoiding and addressing adverse impacts related to an enterprise's direct and indirect operations, products or services."

[edit] Climate Related Financial Disclosures under the G20

In response to the lack of response to the 2015 Paris Agreement the Group of 20 nations (G20) and the Financial Stability Board (FSB) formed a Task Force on Climate Related Financial Disclosures (TCFD) aligned with nationally determined contributions (NDCs). NDCs and the TCFD jointly aimed to standardise climate-related emissions, disclose these and promote better informed investment. In 2021, the UK became the first G20 country to mandate that the UK's largest private companies disclose climate-related data in line with recommendations of the TCFD. However the Financial Services and Markets Act 2000 limits the authority of FCA to impose such disclosure requirements. The Task Force produced its last Status Report in 2023, and on request of the Financial Stability Board was disbanded. In a shift seen as being from consultancy verification to accountancy, COP26 announced formation of the International Sustainability Standards Board (ISSB), in which the TCFD would converge. Intention being for the ISSB to work closely with the International Accounting Standards Board (IASB) to achieve a harmonisation between financial and climate accounting.

[edit] Corporate responsibility in the UK

The UK Government defines CSR as “the responsibility of an organisation for the impacts of its decisions on society and the environment above and beyond its legal obligations, through transparent and ethical behaviour.”

A second-term corporate responsibility (minus the social) is often referred to in the UK. The UK government defines corporate responsibility as the ‘voluntary action businesses take over and above legal requirements to manage and enhance economic, environmental and societal impacts.’ A bill called the Corporate Responsibility Bill was indeed put to Parliament on a number of occasions but as of yet has not been made into law.

There is as such no legal responsibility or duty in law which equates directly to CSR, however CSR or elements of it do appear in for example government procurement policies and The Companies Act. In Section 135 of The CompaniesAct2006 requirements of an ethical or CSR nature are placed on directors stating they are required to ‘consider the interests of employees, consumers, suppliers, the environment and the community when pursuing the interests of shareholders.’

[edit] Corporate sustainability and responsibility under the European commission

The EU Commission defines CSR as 'the responsibility of enterprises for their impact on society and, it therefore, should be company led. Companies can become socially responsible by integrating social, environmental, ethical, consumer, and human rights concerns into their business strategy and operations.' It often also uses the terms Environmental, Social and Corporate Governance (ESG) and Corporate sustainability and responsibility alongside CSR, encouraging a systemic approach to corporate social responsibility over a longer and sustained period.

In 2024 a number of major CSR related directives for larger corporations as well as their supply chains come into force, these will increase the reporting requirements placed of larger firms but importantly is likely to filter down to their supply chains. In many ways these are aspects of CSR principles that will become in effect mandatory for certain companies or at least will require reporting of performance over and above financial reporting.

[edit] Corporate Sustainability Reporting Directive

Corporate Sustainability Reporting Directive (CSRD) in January 2023, the Corporate Sustainability Reporting Directive (CSRD) entered into force and as of 2025, the EU will require large and listed companies to disclose information on risks and opportunities related to their Environmental, Social, and Governance (ESG) practices. A particular focus will be the impact of activities on people and the environment and it is likely to effect around 50,000 companies, as well as supply chains through reporting requirements.

[edit] Corporate Sustainability Due Diligence Directive

Corporate Sustainability Due Diligence Directive (CSDDD) is expected be passed in 2024 and thus made law. In will primarily impact EU-based companies with over 500 or more employees and over €150 million annual revenue, but will also impact international companies doing business in the EU and most likely their supply chains. Compliance will require;

Integration of sustainability and human rights due diligence into procurement policies
Identification of actual or potential adverse human rights and environmental impacts in supply chains
Prevention, mitigation or end of negative impacts in supply chains based on a set criteria
Establish and maintain workers' rights complaints procedure in a supply chain
Design and implementation of a supply chain climate transition plan for the largest of companies.
Monitor due diligence policies and measures, report on and publicise these also for suppliers.

[edit] Directive on Empowering Consumers for the Green Transition (ECGT)

Directive on Empowering Consumers for the Green Transition (ECGT) came into force in January 2024 and aims to curtail green-washing, climate neutral claims and unfair company tactics that prevent consumers from making sustainable choices. Products will only be able to be labelled as eco, green and so on when the entire product is certified by a trustworthy scheme such as the EU Ecolabel and deemed so.

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[edit] External links

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Comments

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Zhao, Z,Y., Zhao, X.J., Davidson, K., Zuo, J., (2012), A corporate social responsibility indicator system for construction enterprises, Journal of Cleaner Production, Retrieved from http://dx.doi.org/10.1016/j.jclepro.2011.12.036

This evaluative paper, cited by 143, develops a framework for CSR indicators relevant to construction enterprises worldwide. It was identified that the construction industry has become increasingly targeted by governments to manage their performance, based on social responsibility, and that comprehensive indicator measurement was lacking. Analysis was divided between project and corporation levels. Through an extensive literature review, thirty CSR indicators were identified, eight of which were related to Health and Safety for Employees. Zhao Zhen Yu is a professor and Zhao Xiao-Jing is a doctoral student at the School of Economics and Management, North China Electric Power University. Davidson is a Lecturer and Zuo, PhD in Architecture, is associate professor, at the University of Adelaide.

The study places Health and Safety firmly in the realms of CSR for construction companies.

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