The “ESG” agenda (UK Construction focus) | Dentons – JDSupra – JD Supra

The “ESG” agenda (UK Construction focus) | Dentons – JDSupra JD SupraThe “ESG” agenda (UK Construction focus) | Dentons – JDSupra JD SupraThe “ESG” agenda (UK Construction focus) | Dentons – JDSupra JD Supra

Directors and managers should not be blinded by the growing demand for construction companies to address environmental issues and achieve net zero targets. The “S” and”G” in ESG should also be on their construction agendas.
Investors, shareholders and clients, as well as supply chains and tenants, are demanding that businesses integrate “ESG” measures in their businesses and commercial relationships. There are many ways that construction and real estate professionals can show their ESG credentials. One example is WELL Building certification. This certifies that buildings have a high level of human health and wellbeing. It was developed by the WELL Building institute.
What should you do if you’re new to ESG? This article will provide you with some suggestions on how to make sure your business addresses the key issues.
Contents
What is the ESG agenda and how can it be implemented?
Why is ESG important? (The UK’s perspective on employment law)
Are you familiar with ESG? Five questions you should know the answers to
What should you be aware of the ESG standards and their frameworks?
Here’s a checklist to help you create your ESG strategy
Additional information
1. What is the ESG agenda and how can it be implemented?
The ESG agenda covers a wide range of environmental, social and governmental issues. These issues must be addressed globally and can affect every market, every model, and every business. The COVID-19 pandemic raised awareness about the importance of social impact across the globe. ESG issues are becoming more important than a tick-box exercise at AGM. Every organisation must consider how it integrates ESG into its overall organisational strategy.
You must immediately begin to analyze ESG risks in your business.
What does ESG cover
The environmental contribution to climate change via emissions and carbon footprint is the business’s impact on natural resources, polluting, biodiversity, energy use sustainable resourcing, resource recycling, etc.
Modern slavery, modern slavery, labour standards across supply chains, pay equity, and compliance with workplace and industry safety and health standards are all examples of social factors. Inclusion and diversity are important, as well as the contribution and impact of your organisation on the communities you live in.
Governance refers to the themes surrounding corporate governance, behaviour, and ethics, including transparency, response to sanctions and political contributions, anticompetitive practices and human rights abuses, and corporate sustainability.
ESG is becoming a more common option and presents legal challenges. ESG risk mitigation is a key objective for businesses. They must draft contracts, agree to and implement appropriate standards, avoid disputes, spot potential claims early, resolve them quickly, and comply with current law to avoid any criminal sanctions.
ESG ratings for corporate entities are becoming the norm. The crucial question is whether ESG is an ancillary or integral part of your corporate strategy and operational decision making. Our guide ESG: What Boards and Directors Need to Know contains a quick test that will help you determine if your board has addressed ESG.
ESG issues can have a powerful emotional impact on a company’s reputation, and could even cause a company to lose its profit margins. Unwanted publicity will almost certainly result from the discovery of modern slaves in your supply chains or illegal waste dumping from your projects. This can be avoided by having an ESG strategy and understanding your legal obligations.
Take a look at Dentons’ interactive methodology: Anticipate-Measure-Manage Methodology: a methodology and mindset for how to approach ESG in employee welfare, environmental, support to contractors, supply chain disruption and insolvency.
2. Why is ESG important? (The UK’s perspective on employment law)
ESG allows businesses to measure sustainability by incorporating environmental, governance and social factors. Businesses are being evaluated on their ability to create and implement policies that foster a positive work environment. As international standards of fairness, equality and justice are used, this benchmark has moved to the global arena. It can have a devastating impact on your reputation and profitability.
Employers who fail or are not proactive in addressing ESG issues (e.g., workplace racial disparitiation) run the risk of losing their commercial reputation, falling in inward investment, and share prices falling. They also face severe penalties for ESG violations. (Note: Companies that operate in countries with lower standards of living cannot rely solely on their geographical location.
Read Employment and ESG: Five reasons why it matters. For more information on your employer role and how to avoid these risks, click here.
3. Are you familiar with ESG? Five questions you should know the answers to
When you are responsible for leading, managing, or monitoring your organisation’s response towards ESG, knowing what you don’t know is half of the battle. You will find that the regulatory landscape is different in every market. Therefore, even if you understand your legal approach and baseline for one market, don’t assume it will be the same elsewhere. Importantly, you must consider your financing requirements when dealing with ESG. You will need a plan of action in case refinancing is imminent, given the importance of ESG from stock exchanges and sources of finance.
These five questions will help you determine how mature your organization’s ESG response.
What is your ESG strategy for your organization?
Who is responsible for making the ESG Strategy a reality? How does the board monitor and supervise?
What are the risks, costs, and opportunities associated with ESG for your organisation? Are you familiar with the laws and liabilities that ESG can bring to your company and board?
How do you measure the impact of your ESG strategy’s ESG strategy?
How do you communicate your ESG strategy to stakeholders?
You can access the online version by clicking here.
Additional guidance on ESG strategy can be found here.
A checklist to help you create your ESG strategy.
Global solutions – ESG is not the same everywhere
Five reasons why ESG matters in the employment and ESG world
4. What should you be aware of the ESG standards and their frameworks?
It is crucial to anticipate which aspects of the various schemes will be made law and prepare your business for the upcoming compliance environment. This will help you manage risk and ensure your organisation’s future success.
For more information on ESG standards and frameworks, please refer to our ESG Standards & Frameworks Guide. This guide will provide an in-depth overview of the standards, guidelines, frameworks, accreditations, and other considerations that your organization could adopt when it comes down to ESG.
5. Here’s a checklist to help you create your ESG strategy
The anticipate, measure, and manage process, summarized in Getting From E to G – a checklist to create your ESG strategy will help you build your ESG analysis.
6. Additional information
More information on ESG and the construction sector:
Read Mark Macaulay’s article here
Listen to the roundtable discussion hosted by Paul Young here: Dentons-Will the real estate development and construction industry enforce ESG self regulation?

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