Why Social Sustainability Matters in the Building Industry
Yes we know, the last thing we need is another acronym or another reporting metric. But what if you could use it to stand out from your competition for both clients and potential employees. What if you could use it to help your client for their ESG reporting.
On the flip side, ignoring social sustainability can be risky. It can tarnish your organization’s reputation, limit growth, and depending on where you are located, it can even expose you to legal liabilities.
Here's why you can't afford to neglect social sustainability in the building industry:
1. Damaged Reputation and Loss of Trust
Consumers, investors, and employees are increasingly aware of social issues, and a company's reputation is valuable. Not addressing social sustainability can lead to accusations of negligence or insensitivity which can damage your brand and erode trust.
A study by Cone Communications in 2023 found that 83% of consumers would switch brands if they learned the company was unethical or irresponsible.
2. Missed Opportunities and Limited Growth
Companies that prioritize social impact are often better positioned to attract top talent, secure investment, stay at the top of new regulations and win contracts. By not integrating social sustainability strategies, your company risks missing out on these growth opportunities and be seen as falling behind your competitors.
According to a study by McKinsey & Company in 2021, companies with strong ESG practices outperform their peers on financial metrics.
3. Regulatory and Compliance Risks
Governments and regulatory bodies worldwide are implementing laws and guidelines around ESG - and specifically social issues like human rights, fair labor practices, and community engagement. Failure to comply with these regulations often can result in fines, legal challenges, and reputational damage. Here are some key regulations that could impact your company:
The European Union’s Corporate Sustainability Reporting Directive (CSRD): This directive mandates that large companies in the EU disclose information on their social and environmental performance.
The United Nations Guiding Principles on Business and Human Rights (UNGPs): These principles establish a global standard for preventing and addressing human rights impacts linked to business activity.
Modern Slavery Acts (UK and Australia): These laws require companies to report on their efforts to prevent slavery and human trafficking in their supply chains.
In 2021, Nestle was fined 43 million euros by French authorities for failing to comply with regulations related to palm oil sourcing.
4. Employee Disengagement and Turnover
Today's workforce, particularly younger generations, is driven by purpose and values in their work. Companies that don’t demonstrate a commitment to social sustainability struggle to attract and retain talent. This often leads to higher turnover rates, decreased productivity, and a negative work culture.
A study by Deloitte in 2022 found that 73% of millennials and Gen Z workers would consider leaving their job if their company did not have a strong ethical reputation.
5. Community Pushback and Loss of Social License to Operate
Your company's operations don't exist in a vacuum. Ignoring social sustainability can lead to community opposition, protests, and even project shutdowns. Without a strong public commitment, you may risk losing your social license to operate, which often significantly increases operational costs and delay or derail projects.
In 2019, Amazon faced significant opposition from local communities over plans to build a second headquarters in New York City, ultimately leading the company to abandon the project.
Your actions can shape a liveable future.
Transform your social sustainability approach with our expert guidance and cutting-edge tools. We'll help you simplify data collection, craft effective strategies, and communicate your social impact.
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