The Supply Chain Sustainability School is back in full swing after a year of abeyance to adapt its curriculum for the Australian market.
Founded in 2012, the school was set up under the UK based Action Sustainability to deliver specialised courses that could solve a common issue in the construction and commercial real estate sector – the lack of knowledge and capability to achieve sustainability.
Co-founder and director Ian Heptonstall told The Fifth Estate when the school first started in Australia, it was provided through a local operator who “put a local spin” on the existing courses already being delivered in the UK, Ireland and the United States.
“The problem with [having a] local operator is that the business model and investment required couldn’t be done with a very small local operator, which is why it’s important for us now to build a local team and have that local knowledge.
“The school needed investment to bring the content up to date; bring our approach, assessments and knowledge up to date.”
Organisations such as John Holland, Ventia, and BlueScope offered to support the school to help improve the content, in the form of a commitment and the investment required to hire a local team. This gave the school the push to reclaim their licence.
“We spent a year updating our content, which has been a big task, but we had to absolutely get it right, and we’re working with our partners to ensure it reflects the needs of the local built environment.”
Free of charge courses
Originally, there was only one person working at the school, but now it has four staff members dedicated to providing the service in Australia. Accessing the courses is free of charge for suppliers, with larger construction and property firms funding the school to ensure their supply chain can learn to deliver to the sustainability criteria set for the project.
Before 2005, Heptonstall owned a construction firm that bought, retrofitted, and even converted commercial real estate into residential and an events company that ran conferences to increase dialogue between large and small businesses.
The school was founded on the passion that Heptonstall developed for learning about sustainability, reuse and what industry clients wanted in procurement.
The school now has 71 staff members across the globe.
The pressures in Australia
Nicolas Morel, vice president of business development, is leading the team in Australia, and at the time of the interview, was finishing up a roadshow, which saw the school visit Brisbane, Sydney, Melbourne and Perth.
Morel told The Fifth Estate that Australia faced a lot of compliance driven pressures, such as the mandatory climate reporting ramping up this year, as well as an upcoming reform to the Modern Slavery Act.
“At the same time, businesses want to be more competitive. They want to be more innovative, and there’s a range of challenges that come with that. For me, there’s no better time to create a space where businesses can come and collaborate.”
Morel started his career in engineering in the built environment, holding roles in technical engineering and eventually commercial leadership. He spent most of his career as a supplier for major infrastructure projects, tier one commercial projects and even renewable energy projects. He said that after witnessing the complexity of meeting client requirements, he saw the opportunity to help people like him build the capacity to understand sustainability requirements.
“One of the best-kept secrets in our industry is that we all share the same supply chains and therefore face the same sustainability challenges. But up until now, there wasn’t a place where clients and contractors could come together and collaborate on how to resolve these issues.
He said that 80-90 per cent of the impact is in the supply chain.
“It’s important to understand that the school was set up to educate non sustainability experts. Small businesses don’t have the luxury of a sustainability manager.
Organisations like the GBCA [Green Building Council of Australia] or Infrastructure Sustainability Council are already doing an outstanding job training and certifying the experts. Our role is complementary: we focus on building capability from the bottom up by training people who are not sustainability specialists”
Morel said the language around sustainability is generally confusing when passed on to the supply chain; suppliers often need to be asked to fulfil sustainability requirements in different ways.
“If you’re a supplier doing the same work for 10 different jobs, you’ll likely have to prove you meet the same sustainability requirement in 10 different ways.” Having clients and tier 1 contractors collaborating through the School will help with the efficiency and consistency of the message.
Wider trends
Heptonstall said that across the globe, companies face compliance, stemming from science based target initiative (SBTi), sustainability commitments and ESG strategies that involve achieving certain things by certain dates. There was federal level legislation around building more sustainably, but there was also a cost issue.
“I’m a passionate believer that if we get sustainability right, it shouldn’t cost us more. If we reduce carbon, it basically means you are using less energy, and if you are using less energy, it should be costing us less somewhere along the line. Particularly if you build the capability so you’re not just reliant on [the] one supplier who can supply the sustainable offering.
“Some of my clients in the UK are telling me that 10 per cent of all materials they buy end up as waste, and yet they are only making a 5 per cent margin, and my thought is that they need to start wasting less.”
According to Heptonstall, hot topics that came up on the roadshow included carbon reduction, social impact, modern slavery and how to reduce waste and create a circular economy. The roadshows had been attended generally by over 200 people in every city by key decision makers in sustainability and procurement.
Morel added, “We’ve been talking to many real estate developers, and the industry is driven by investment. There’s a huge pool of money around ESG requirements that is now coming to Australia.
He said the school in the UK was starting to expand into other sectors such as finance but that in Australia, building critical mass around the construction industry was still a priority.
“We see the infrastructure sector demanding more on ratings and more on sustainability systems, [which is also seen] in the commercial building sector.”
A long term view is essential to institutional investors in real estate, and hand in glove with sustainability
Heptonstall said that sustainability had moved away from reliance on government financing to drive markets to commercial real estate, “reliant upon big pension funds and superannuation funds” to provide development finance for new buildings.
“There’s evidence out there that if you build sustainably, it would be worth more in 10 to 20 years’ time.” Institutional investors needed to take a long term view “because they are looking at financing an asset for 60 years or more”.
“They want to own that asset, and they want to protect its value; that’s a big thing when it comes to commercial real estate – that’s underpinning investment in infrastructure. If the government, in theory, is investing in infrastructure, they have to go to the market and go back to the same types of funders, and these funders are really driving the market under corporate compliance.
When asked about political pressures, Heptonstall said the company had launched the school in the US “a month before Trump came in”. He admits that the reason the school branched out to Australia is that “you have political leadership that says sustainability is good”, and it wasn’t always the case in other countries. “It’s important we work where there is political leadership.”
Federally, the United States might have taken a back seat on sustainability, he said, but that “California and New York – some of the biggest economies in the world – have some of the strictest reporting when it comes to sustainability performance.
“Interestingly, in the States, three of our partners are actually based in Texas. If you ask, why are we doing [in sustainability]? They say it’s because we have to trade in other states – even if our home state of Texas doesn’t believe [it].
“The political driver thing is usually a lot more nuanced than the headlines might have said.”