Supporting the enterprise ESG vision in the E&C industry

The role of big data in the construction industry

ESG (environmental, social, and governance) demonstrates clear organizational purpose and values and is important for all levels of the organization. Technology is a key enabler of ESG regulatory compliance for the engineering and construction (E&C) industry and can help grow from the setback of 2020 recession in the USA.

The construction industry comprising industrial, commercial, residential, infrastructure—that encompasses civil, roads, rail, ports, power, water, waste, data center, and so on—lags across most dimensions of digital maturity. The current manual process to consolidate reports from all functional areas per project has made it difficult to acquire a holistic view of supplier activities. Without capturing the right data at the right time, it is challenging to identify opportunities and areas for improvement.

Sustainability: The focus of emerging construction industry trends

Sustainability is the focus of many emerging construction industry trends. Increasing scrutiny by investors on ESG factors is leading construction companies to reassess the way they conduct business with stakeholders. 

Changes in policy like requiring properties to be assessed and rated for energy performance has led to a critical tipping point in the construction industry. Also, investors are eager to invest in companies that integrate ESG factors. The entire sector is rethinking its plans, designs, to construct and operate in a more sustainable manner.

_{Figure 1: Identifying ESG needs}

E&C companies are experiencing increased interest in their environmental service from their clients. This is also a driving factor while these companies are aspiring for carbon neutrality in the next two to three decades. Environmental performance is bound to attract individuals as ESG standards become critical factors for them in deciding for whom they work. Existing constructs stemming from archaic architecture and poor data handling practices are a big impediment for ensuring enterprise-wide data consistency and quality—which can help E&C companies achieve these goals faster.

Identifying the need for a connected construction ecosystem

Firms are trying to create long-term efficiencies and competitive advantage through connected construction and advanced construction materials. The construction industry has recently seen greater digital adoption and its implementation is at an unprecedented pace due to the COVID-19 pandemic. 

Integrated systems are expected to drive efficient processes, provide accurate and standardized data to suppliers, clients, employees, projects, and materials.  A single point of data entry into a master system which is then automatically updated across all the other systems, will ensure uniformity of data. With a whole focus on artificial intelligence, we might also look at the whole new frontier of collecting social and environment information and create a ‘single pane of glass’ to view company’s own, and its suppliers’, performance on various parameters related to ESG standards. 

_{Figure 2: ESG standards to drive accurate and standardized data for an ecosystem approach}

Digital construction, characterized by an ecosystem approach, will be a key enabler for adjusting to new market realities. Top technologies like building information modelling (BIM), digital supply networks, digital twins, autonomous rovers and drones, and their integration across systems can help replace Excel spreadsheet-driven reports with automatic updates to the central data hub. This gives the board their fully automated Monday morning reports with performance measured against agreed ESG KPI, and the ability to view trends and support continual improvement, material tracking, ongoing development, automation of building regulation compliance reports. In addition, the central data hub can help with workforce reporting - including diversity and inclusion. 

The entire EPC ecosystem is reinventing itself for quick deployments, planned maintenance, optimized utilization for higher productivity, predictive insights of operation, and production efficiency management. 

Enabler for new revenue streams

Ability to harness the power of data from disparate data ecosystems will be key to fuel business growth. A complex data ecosystem consists of enterprise data (HRMS, payroll, finance, and the like), site operations data, project-specific design and execution, supply chain management, partner data across construction projects, audit, operational, as well as smart build environment data generated from smart assets and buildings. Modern technologies enablement, collection of social and environmental information, standardization of data, and transparency will make data interpretation more relevant for reporting purposes. Advanced technology can be used to measure the effects on the environment (including carbon footprint) throughout the building’s lifecycle—design, construction, operation, maintenance, renovation, and demolition stages. 

Digital solutions with regained digital maturity can even become the enabler of new revenue streams. Also, we must recognize that not every solution is required to be unique to each industry. A connected workers platform (for health and safety of employees) and a workforce management solution are some of the solutions that can be implemented across industries with a focus on configuration—and not customization. Digital skills are most in-demand and building these capabilities in-house can be slow and expensive. Instead, a combination of in-house and IT service provider can add scale to capabilities rapidly in a cost-effective manner.

The way forward

E&C companies must stay aware of global trends, regulations, and compliance requirements. The right technology, combined with strategy and speed, to bring people together at an extraordinary time will support the enterprise ESG vision and enable value creation for all stakeholders. ESG focus is imperative now, and by jointly working with the ecosystem, the right capability and digital maturity will enable E&C companies to publicly report performance as per ESG standards.