Lucy Davies, ESG director at Tilbury Douglas, explains what environmental, social, and governance (ESG) means to the company and other tier one contractors working in the healthcare sector

In today’s rapidly-evolving construction landscape, environmental, social, and governance (ESG) principles have become pivotal, especially within the healthcare sector, where the work we deliver directly impacts the complex communities we operate in.

Clients in this space are increasingly prioritising sustainability, social value, and governance excellence. And rightly so.

They are essential to ensuring public trust, securing long-term funding, and, most importantly, delivering spaces that support the health and wellbeing of patients, staff, and communities.

This shift is not merely a trend, but a response to several critical factors, such as regulatory compliance and policy initiatives.

Governments and regulatory bodies are implementing stringent policies to promote sustainability.

For instance, the UK’s National Health Service (NHS) has committed to achieving net-zero carbon emissions by 2045, a goal that necessitates sustainable practices across all projects.

Financial incentives and funding requirements are also important as access to funding and investment is becoming more tied to ESG performance.

Financial institutions and investors are sometimes prioritising projects that demonstrate robust ESG credentials, influencing clients to demand the same from their contractors.

Reputation is also a key factor as healthcare facilities are integral to communities and projects that align with ESG principles enhance the reputation of healthcare providers, fostering trust and demonstrating a commitment to societal wellbeing.

Contractors’ approaches to ESG integration

Recognising the escalating demand for ESG adherence, construction contractors in the healthcare sector are adopting comprehensive strategies to embed these principles into their operations, such as:

• Sustainable design and construction practices: Contractors are embracing sustainable design principles, such as energy-efficient systems and the use of eco-friendly materials, to minimise environmental impact. This approach not only aligns with environmental goals, but also enhances the long-term operational efficiency of healthcare facilities
• Decarbonisation: The UK is committed to reaching net zero carbon by 2050 and the construction industry has an obligation to address its carbon footprint and be at the forefront of innovation to reduce carbon impact. Contractors must now consider decarbonisation across the whole lifecycle of the buildings they deliver. This includes upfront embodied carbon, as well as carbon in maintenance, replacement, end-of-life deconstruction, and recycling.
• Supply chain collaboration: Engaging with suppliers and subcontractors to ensure they adhere to ESG standards is crucial. This collaborative effort ensures that sustainability and ethical practices permeate every level of the construction process. It also allows contractors to support Voluntary Community and Social Enterprises (VCSE), local, and small and medium-sized businesses in their business growth and support the local economy
• Employee engagement and training: Investing in employee education on ESG matters fosters a culture of responsibility and innovation. Training programmes equip colleagues with the knowledge to implement sustainable practices effectively
• Transparent reporting and accountability: Implementing robust reporting mechanisms allows contractors to monitor progress, identify areas for improvement, and demonstrate accountability to clients and stakeholders

Benefits of prioritising ESG

The integration of ESG principles yields substantial benefits, extending beyond compliance to encompass economic, social, and environmental advantages. These include enhanced competitiveness, as contractors with strong ESG credentials may become more likely to secure projects, as clients increasingly prefer partners who align with their sustainability goals.

Sustainable practices often lead to reduced waste and energy consumption, resulting in cost savings and improved project efficiency.

Addressing ESG factors can also help pro-actively mitigate risks related to regulatory changes, environmental liabilities, ensuring smoother project execution.

As we already know the importance of social value, it goes without saying that projects that prioritise ESG contribute to community wellbeing, support local economies, and promote social equity, enhancing the overall societal value of the construction industry.

A commitment to ESG

At Tilbury Douglas, our ESG strategy, Building a better future together, exemplifies our dedication to integrating ESG principles into our operations and demonstrates our commitment to doing the right thing for our business, our stakeholders, and the environment and the communities in which we operate.

For us, ESG is about building a resilient business prepared to manage climate, regulatory, and social risks, while continuing to meet and exceed client expectations.

So what does this mean?

It means we are committed to achieving net-zero operations, focusing on reducing our carbon footprint through energy-efficient practices and renewable energy adoption.

Biodiversity enhancement is also a priority, with each of our projects aiming for a minimum of 10% biodiversity net gain, ensuring that our construction activities contribute positively to the natural environment.

We also strive for zero waste to landfill by prioritising waste reduction, material reuse, and comprehensive recycling programmes across all projects.

And we are continuing to work closely and collaboratively with our supply chain partners to develop and implement robust carbon reduction plans, promoting sustainable practices industry-wide.

Looking ahead

The imperative for contractors in the healthcare sector and beyond to prioritise ESG is clear.

Driven by client demands, regulatory frameworks, and the intrinsic value of sustainable practices, integrating ESG principles is becoming essential.

And, at Tilbury Douglas, we are committed to leading by example, embedding ESG into the core of our operations to build a better, more sustainable future for all.