THE STEEL DEAL
If I asked 20 of my colleagues to tell me what “sustainability” means, I’d bet you $20 that I’d get 20 different answers. This fuzziness is partly driven by the fact that so many industries and organizations have been busy coming up with their own definitions, often in a way that benefits that industry or organization.
The term “sustainable development” first appeared in an official document in 1969, the same year that the U.S. Environmental Protection Agency was established, with a gauzy description that identified “social,” “environmental,” and “economic” needs of society as the critical components.
Since then, however, it seems that the “environmental” dimension of sustainability has received the most attention. For steel and steel framing, our badge of honor is “recyclability” and “recycling rate,” which is the highest of any of the other common construction materials. Advances in steelmaking technology are another bragging point, with total energy consumption down by 50 percent since 1975.
Other construction materials, like wood, focus on carbon emissions which is the primary constituent of greenhouse gasses. The results of the studies are often cited, and used by the sponsoring organization to market their particular products. So, it’s no surprise that through selective omission and creative setting of the impact boundaries, the wood industry always seems to be able to show their product to be the most “sustainable” construction product. Whatever that means.
The problem with all of this is that the definition of sustainability is still subjective. And if you can’t clearly define it, then you can’t effectively or objectively measure it. And if you can’t do that, then you’re not likely to prioritize it in management and operating decisions, or value it highly in making choices about construction materials and methods.
This shows up in research conducted by the Steel Framing Association where “Environmental Impact” and “Helps Get LEED Certification” ranked dead last among the 200 owners and developers surveyed:
The other problem of defining sustainability on just the basis of environmental performance is that even the greenest of green companies isn’t sustainable if it isn’t making money, can’t attract employees, or isn’t investing in its future.
Consequently, outside of the construction industry, the other two dimensions of sustainability are gaining attention: Social Sustainability, meaning how well a company balances the needs of employees, society and the business enterprise, and Economic Sustainability which not only considers the obvious factors, such as revenue and operating income, but would also take into account Operating Margin, and Investments in New Processes and Products.
However, the devil is in the details. Like Environmental Sustainability, competing definitions muddy the waters but that hasn’t stopped the rise in the number of companies and industries that have accepted the challenge of identifying and reporting their sustainability performance on the basis they believe is relevant to them.
And the momentum is increasing. Although sustainability reporting in the United States is presently voluntary, corporations have increased their reporting on these issues. The Governance and Accountability Institute reports that approximately 81 percent of S&P 500 companies issued a sustainability report in 2015, compared to less than 20 percent in 2011. By 2016, more than 13,000 companies had produced more than 80,000 reports globally. KPMG’s 2017 survey reveals that sustainability reporting is standard practice for large and mid-cap companies worldwide.
In the steel sector, World Steel in Belgium has led the industry with a global sustainability report that identifies and quantifies performance on “8 Key Performance Indicators.”
To date, Sustainability reporting has been the province of publicly owned corporations and industry sectors, like oil and gas, financial services, health care and industries like aluminum, forestry products, steel and concrete. Increasingly, however, there is a move underway to expand the development of sustainability definitions and metrics by end-use providers of construction products.
To date, the cold-formed steel framing industry has mostly relied on EPDs and LEED standards as measures and definitions of sustainability, but a new generation of workers, competitive pressures, and government regulations guarantee that this will increasingly require our attention.
Government efforts have tended to be aspirational or be enforced through punitive regulation for environmental violations. However, more recent moves by the U.S. Government, the largest real estate developer in North America, suggest that more comprehensive requirements may be in store. For example, the recently announced “Buy Clean” task force to identify materials that will be permitted for federally funded projects, with changing language that requires “transparency through supplier reporting” … “including each stage of the manufacturing process.”
Companies and industries in tight labor markets, like construction, will increasingly find that their prospective workers care more than ever about this issue. Millennials will make up 75 percent of the workforce in 2025, and a recent survey found that 75 percent of this generation consider a company’s social and environmental commitments in deciding where to work, and two-thirds said they would not accept a job for an employer without a strong sustainability program.
Of course, there are a lot of companies in the cold-formed steel framing industry that practice “sustainability” when they lower their energy costs by installing more efficient lighting and Low-E windows. Or, when they provide their employees with training and a safe workplace. However, it’s when sustainability is formally incorporated into the business plan, quantified with KPIs, benchmarked against broader industry performance, and tracked on a regular basis, that it can be an effective management tool.
It's time to move on from the simple definitions we have used to define our industry’s sustainability profile and start incorporating the broader principles of sustainability into our vision and operating practices. It’s an opportunity to improve your company performance, help us attract and retain the next generation of workers, keep the industry from falling further behind our competitors, or ensure we continue to have continued access to important markets. All the things that are a part of making cold-formed steel framing sustainable.
Larry Williams is executive director of the Steel Framing Industry Association.
Back To Contents