Comment: It’s time the construction supply chain went green
Environmental Supply Chain Management (ESCM) is a key part of a sustainable business strategy, and it covers management of all significant environmental impacts from a company's supply chain. The lack of application of ESCM in the construction sector is a major concern given that construction is the single largest contributor to the global environmental footprint.
In the United Arab Emirates (UAE), the construction sector has been responsible for the bulk of environmental degradation in the country. However, the government and construction firms have been taking steps to reverse this as it aims to become one of the most sustainable countries in its 2021 Vision. The UAE provides an ideal setting to explore the importance of ESCM in construction.
The key stakeholders in the construction sector on whom the application of ESCM depends on are Developers, Suppliers, Architects/Consultants, Contractors and Government. The green decisions made by the developers at design stage could significantly reduce the environmental impacts during the operational phase of the building and eliminate costly and disruptive refurbishments for reducing any environmental effects. Additionally, the green product design aspects considered by suppliers could reduce the overall life-cycle energy consumption of the building. Moreover, the skillfulness of the architect/consultant in providing a cost-effective modular design will enhance pre-fabrication of building components and disassembly during the building demolition to maximize recovery of materials. Furthermore, contractors minimize the environmental impacts of the construction supply chain through on-site green construction practices such as use of automation. In regards to the role of governments in promoting ESCM, enforcement of green building regulation along with associated non-compliance fines and landfill tax could play a significant role in addressing the situation.
The findings from the recent research in the UAE to understand the importance and application of ESCM in construction through interviews with key stakeholders show that large firms vis-à-vis small firms, and foreign firms vis-à-vis local firms respond swiftly to these pressures by implementing environmental practices. Majority of the interviewed Developers believe “green is the new norm” because most of their competitors are pursuing LEED certification but some raised concerns about the low level of environmental awareness of the UAE investors/buyers, and their lack of willingness to pay premium for green buildings. Additionally, findings suggest that the environmental commitment plus the implementation of environmental practices to achieve cost reduction is less rigorous in Developers because they were not the potential beneficiaries of lifecycle savings. Moreover, the feedback received from the interviewees concerned the more active role that can be taken by the government, such as incentives/subsidies for firms to implement environmental practices and preferential treatment for government projects or awards.
Given the understanding that the underlying issues in construction is similar across countries, the findings provide an exceptional opportunity for policymakers and practitioners to create policy changes, act on the issue and create change. Each supply chain stakeholder is equally important in the application of ESCM in the construction sector and diffusion of environmental knowledge such as from foreign firms to local firms or from large firms to small firms, and supportive programs and partnerships should be encouraged.
About the author: Dr Sreejith Balasubramanian is a lecturer in Supply Chain Management at the School of Business, Middlesex University Dubai. This comment piece is based on his published paper on ‘Environmental Supply Chain Management in the Construction Sector: Theoretical Underpinnings’.