Construction Companies will have to demonstrate their commitment to Environment, Social and Governance Goals
Just consider all these numbers and facts –
- By 2035, India’s urban population will be 43.2% that is 675 million in 2035, behind China’s 1 billion, according to the United Nations – Habitat World Cities Report 2022. Ref- [i]
- In 2023, about a third of the total population in India lived in cities with people moving from rural areas to find work in the cities. Ref-[ii]
- India’s construction industry is the second largest contributor to the GDP after the agricultural sector and employs a work force of nearly 32 million. Ref-[iii]
- In 2023, the construction industry was the sixth-largest foreign direct investment recipient sector and experienced notable growth in 2022-23. Ref-[iv]
- This sector is one of the main causes of urban air pollution apart from having other adverse effects like habitat degradation, debris dumping, water and noise pollution, community displacement and poor working conditions.
In the light of these huge numbers, Indian construction industry is gearing up to make their practices sustainable and understand how best to reach Environment, Social and Governance (ESG) goals. The Delhi Declaration of the G20 Summit held in 2023, had accelerating progress on global Sustainable Development Goals (SDG) as a priority along with strong, sustainable, balanced and inclusive growth across sectors.
Reference
[i] The Hindu, June 30, 2022
[ii] https://www.statista.com/statistics/271312/urbanization-in-india/
[iii] https://www.cidc.in/articles2.html
[iv] https://www.ceew.in
Why will ESG matter for construction companies?
With climate change and environment protection becoming global concerns, governments are coming up with regulations and policies that will impact the business practices of construction companies. Also it’s high time that this sector faces scrutiny for its environmental impact.
Companies that operate across various geographies will have to adhere to a range of ESG rules and even demonstrate how they are positively impacting local communities and their workforce. Since ESG rules cannot be merely lip service but need planning from the inception stage, companies will have to spend more time at the drawing board, innovating and making sure that sustainability is the soul of the project.
ESG goals resonate with young people who are both a part of the company’s workforce and customers. A company committed sincerely to ESG will benefit with an enhanced brand value and build trust with other stakeholders as well.
ESG sensitivity also means careful planning for risk mitigation and better decision making, leading to improved operational efficiency and resource optimization. With an environment consciousness at the core of your business, it will be easier to access capital by connecting with investors who prioritize companies that focus on ESG goals.
Innovations in materials and processes, carbon footprint tools, digital twins and modeling scenarios to understand impact of ESG measures will all be a regular part of the construction scenario.
What will Developers need to gear up for?
If you thought just a ‘Green Building’ certification for your project was enough, evolving rules will change the building industry, making it more accountable and urging it to make changes at the very elementary level. You as a Developer will even have to demonstrate your efforts in keeping your work force healthy and safe in body and mind, along with the larger community that you impact with your projects and of course, the environment health as well.
Gearing up to address and deliver ESG goals successfully will soon be the need of the hour as the construction industry is one of the worst polluters of fragile environment. However, not every company will have the required expertise to make this shift. We at CQRA have the expert know how to guide you through this exciting and much needed change in business practices.
ESG Audits are not a common practice today, companies do not know much about it and nor are trained personnel available who know about ESG practices. CQRA is a step ahead, anticipating this change and ready as a Third Party Agency to direct your construction business in the right direction.
ESG goals resonate with young people who are both a part of the company’s workforce and customers. A company committed sincerely to ESG will benefit with an enhanced brand value and build trust with other stakeholders as well.
You as a Developer will even have to demonstrate your efforts in keeping your work force healthy and safe in body and mind, along with the larger community that you impact with your projects and of course, the environment health as well.
