Sustainability winning for your business and the climate

Sustainability, Social Value, ESG (Environmental Social Governance) all sound like buzz words to many of us, but in reality, if you don't pay attention to what is behind the phrases, you could start losing work to those that are.

Fortunately for the construction and plant sector, starting to learn more doesn't have to cost the earth, thanks to the formation of the Sustainability Supply Chain School. It's funded and supported by the construction industry to provide free information, webinars, events, and more to organisations, business owners, and operators alike.

And it also has a plant sector specialist called James Cadman, Head of Consultancy and Carbon at Action Sustainability. He is responsible for managing the plant sector inputs to the school. I caught up with him to learn about its Plant Charter and the big changes he has witnessed since its launch in April 2020. In this interview, he also highlights how Sustainability is having a bigger commercial impact on the sector.

James: "Sustainability has always been a driver for individuals and businesses to become better guardians of the environment, so we leave it in good hands for the next generation. But we also need to profit from investment in new equipment, technologies and the solutions we need to do this. It's common sense, really. There is no way anyone would invest money if that investment doesn't allow you to do things better, more productively and more efficiently. It's why we launched the Plant Charter last year, to support the industry in taking the next steps to a more sustainable future.  

"The Plant Charter itself is a six page document that is available to download at the supplychainschool.co.uk website. It sets out key commitments for those signing up and was created in collaboration with numerous stakeholders in the industry. These included clients like National Highways (formerly Highways England), HS2 Ltd, Network Rail, tier one contractors, plant hire companies, earthworks contractors, OEM's, technology providers and end users. 

"What has been developed is an approach that is grounded in commercial reality, and that has now attracted over 20 signatories, including main contractors like BAM Nuttall, Costain and Morgan Sindall and plant operators like Flannery Plant Hire, GAP Group. L Lynch Plant Hire, M O'Brien, Sunbelt Rentals, Ardent Hire and Thomas Plant Hire. 

"The main objective of the charter is to increase air quality and reduce greenhouse emissions, removing the negative impacts caused by the use of construction plant and equipment. One of its key aims is to develop minimum standards when it comes to plant emissions.

It also aims to encourage investment throughout the sector. For signatories, it's a clear, public declaration that the individual business is focused on actively reducing the emissions from plant. Not only to improve local air quality for your colleagues, neighbours and surrounding communities but also to play a part in reducing the effects of global warming.

"And the benefits are clear, as a client, it sends a clear signal that you want your contractors to support your objectives, to be a progressive and sustainable organisation. As a contractor, this will strengthen your sustainability statement when it comes to winning work. This means organisations will know you are committed to increasing the purchase of equipment that meets the greenhouse gas emissions and air quality standards outlined in our technical supporting documents. They will also know you are focused on delivering Social Value, investing in people, skills, and training, and helping other supply chain members. 

"Some people may ask why all this has become so much more important. It's all down to how Government and major investors run tender and procurement processes. For example, one thing that really stood out earlier this year was the announcement of the Construction Leadership Council's (CLC) targets and ambitions for its Construct Zero Performance Framework. It talks about its commitment to reducing diesel plant on site by 78% by 2035.

"Everyone reading this will know it's a big ask because there's a lot invested financially and emotionally in all the plant and equipment we have. And the last thing we want to see people do is to sell perfectly good equipment. But if you are tendering for major projects that this framework will cover in the future, you will have to show how you are transitioning away from older equipment to newer or cleaner solutions.

Why has social value become so important?

Readers may not be aware of a piece of legislation from the Government called Policy Procurement Notice PPN 06/20. It announced that from June 2020, when big public sector organisations want to procure, they have to include Social Value in their tender. It applies to all contractors who tender for and win work. In practical terms, these businesses have to put information in their response about how they will generate additional Social Value. Having seen some of these tenders, it can now carry a weighting of 10% or more, a big win or lose margin.

"This is why major contractors are focusing on this area. In turn, they are telling shareholders about how they will be 'Net Zero' in varying stages and dates in the next 10 to 25 years. Why is this important for the earthworks community? In some cases, the carbon impact of the projects these contractors deliver is over 90% dependent on the supply chain activity.  

"It is no surprise to learn, therefore, that both client and tier one contractors are really ratcheting up demands from their supply chains for cleaner and lower emissions equipment. This will be further enhanced throughout this year as we head for the COP 26 UN Climate Change Conference in Glasgow from 31st October to 11th November. Couple this with Local Authorities outside London like Birmingham and Bristol bringing in 'Low Emissions' or 'Clean Air Zones' this year, and you can see how the global issues are fast becoming the local ones.

The big diesel changeover meets Super Deduction tax break.

With the imminent change from Red to White diesel set to add over 40 pence per litre to fuel costs, there has never been a more important time to focus on fuel and carbon savings. Not only will it help win work, it will also deliver significant cost savings, straight to the bottom line. Think of it in value terms. If you can get more productivity and efficiency out of a drop of fuel, you are ultimately going to be saving a lot more money when the diesel switchover takes place in April 2022.

"It, therefore, makes sense to look at your overall cost of ownership and operation of plant equipment right now. Knowing this information and looking at available financial and equipment options, it might be more cost-effective to invest in new equipment. This is particularly important to analyse in this year and next as up until March 2023 businesses can take advantage of the 130% Super Deduction tax break offered by the Government."

Help is available, and it's free.

James: "It can all seem a bit overwhelming with clients and contractors asking for real-time data on fuel consumption, projected carbon footprint calculations, Social Value impacts, the list goes on. This is why the Sustainability Supply Chain School team is working hard to make information available to businesses of all sizes, and it's all free if you register your details on the website.

"For example, we are putting together a Lunch 'n' Learn hour-long webinar on 'Best Practice and Low Carbon Fuels' on 9th November at 2pm. This will feature experts talking about HVO and other fuel types. It's a particularly important subject right now as HVO is already being mandated onsite by contractors like Skanska. 

"And in the future alternative fuels will become even more important. You only have to look at the rise in electric power for smaller plant and the acceleration of hydrogen investment for others to see what is coming down the road to net-zero." 

James concluded: "Of course, we all know that with a whole plethora of power sources, there is never going to be a 'one size fits all'. But we've got some stringent targets to meet and will need to work together on what organisations want and what can be provided. That is why we are encouraging more people to use and our resources as educational tools."

You can register and access all information from the Sustainability Supply Chain School at www.supplychainschool.co.uk. You can also listen to a Podcast with Peter Haddock and James Cadman on the subject matter above by searching for 'Content With Media' on your preferred podcast channel.