U.S. Construction Industry Steps Up the Pace on ESG, Without Saying 'ESG'

Some U.S. businesses are trying to cool off the heated partisan pushback against the corporate ESG (environmental, social and governance) movement by avoiding specific references to the term. However, in some cases, this lack of communication masks a strong commitment to decarbonization and other ESG principles. The U.S. construction industry provides a good example, as bottom-line interests continue to support the ESG movement, regardless of what words are used. 

Stepping up the pace on carbon reporting

Over the past two years, the anti-ESG movement has gone far beyond partisan rhetoric to include a rising tide of state-level laws and multi-state, coordinated legal attacks designed to protect fossil energy interests and inhibit renewable energy investment.

Even as this unfolded, the leading trade organization of the U.S. construction industry, the Associated General Contractors of America (AGC), launched a new Task Force on Decarbonization and Carbon Reporting this spring. The move is particularly significant on two counts. 

First, by using decarbonization in the task force’s name, the trade group shows it is not just possible but easy to confront the anti-ESG movement on a fundamental pillar of the ESG movement, without using those specific words.

Second, AGC emphasized that the Decarbonization Task Force is the first initiative to be raised under its purview that is focused on hands-on action steps rather than simply issuing reports. That approach raises the profile of the task force to the level of a noteworthy action needed to address an issue of great significance to the industry.

The task force was assigned to engage with AGC’s 27,000 members and 10,500 associated firms on carbon reporting and goal-setting, with the aim of developing an "industry playbook" on carbon reporting this year.

Putting an end to the “climate hoax”

In an August update, AGC went a step further — advocating for the construction industry to work with project developers to reduce carbon emissions before and after construction.

That end-to-end approach is an important step, because construction activity by itself accounts for under 2 percent of U.S. greenhouse gas emissions, according to AGC. The built environment accounts for far more emissions, at roughly 33 percent in the U.S. Some estimates range up to 40 percent overall.

AGC is also a good example of a trade organization that has dispensed with climate skepticism once and for all. The organization leaves no room for hedging or accommodating “both sides” of the climate crisis.

The new Decarbonization Task Force builds on the work of AGC’s previously formed Climate Change Task — which issued a report in 2021 focused on how the Joe Biden administration's climate policies will impact the construction industry. The report raised significant concerns for industry stakeholders, but its overall emphasis was on the potential for new growth opportunities across the construction industry as a result of new Biden administration climate policies.

As for climate skepticism, AGC maintains a climate change page on its website, in which CEO Stephen E. Sandherr makes it clear that businesses have no obligation to debate climate science.

“The construction industry is the delivery vehicle for building a greener, more climate friendly future,” Sandherr wrote firmly.  “Finding a way to ensure that what our members build is more efficient will have a significant impact on climate change."

Uniting for net-zero

To cast the arguments against climate action even further into irrelevancy, the new Decarbonization Task Force has positioned itself as part of a global effort.

The task force was co-created by the U.S. branch of the leading global construction firm Skanska. As a climate-forward firm headquartered in Sweden, Skanska brings its considerable experience on carbon reporting to the U.S. effort. Among other initiatives, in 2019 Skanska joined with the Carbon Leadership Forum to help create the Embodied Carbon in Construction Calculator.

The task force “unites some of the biggest construction companies to support the industry’s decarbonization efforts,” said the group’s chair, Myrrh Caplan, who is national vice president of sustainability at Skanska U.S.

Where are the workers?

The anti-ESG movement is primarily focused on protecting fossil energy stakeholders, but it has also manifested in other elements of commerce including diversity training and other corporate DEI (diversity, equity and inclusion) initiatives.

The pushback has worked to some extent, but it may hit a brick wall in the construction industry.

A growing shortage of skilled workers should help motivate the industry to make a greater effort to recruit outside of its traditional white, male workforce. As additional motivation, President Biden’s climate bills also include environmental justice provisions, as well as stipulations for hiring women and other groups underrepresented in the construction industry.

If AGC really is serious about positioning the U.S. construction industry to take full advantage of new climate policies during the Biden administration, then its diversity and inclusion initiatives will be part and parcel of the effort, no matter what they call it. 

Image credit: bannafarsai/Adobe Stock