Holes in the fence - £25,000

ESG is a big animal, untamed it can run amuck. Like my golden lab, Tom. Every time he escapes it’s the same, “grab his lead!” and five of us go-a-chasing around and around the neighbour’s field.

Keeping control of your ESG data is no different. If you don’t have good processes in place, or there’s big gaps (like my fence), it can run you ragged. Your team will spend an age chasing information and pulling things together manually. Hopefully not whilst your clients watch on like my neighbours Sean and Cathy.

Automating ESG data collection and reporting could save around 80% of the time spent. If you dedicate 500 hours annually to manual data collection and reporting, this could be reduced to 100, saving £25,000 in associated costs. Tighten your belt or look at additional projects, it’s up to yourself.

Ahh Sh1t, Jeff is leaving - £40,000

We have all had that sinking feeling when someone on the team, doing a really good job, leaves to go somewhere ‘better’. What’s so good about them? Maybe I should go somewhere ‘better’ too?

A strong ESG strategy isn’t just good for the environment or compliance. It’s a tool for employee retention. Today’s workers value companies that are socially responsible and environmentally conscious. By demonstrating your commitment to ESG, you attract and retain talent. Reduced turnover means less disruption, lower recruitment costs, and a more experienced team... fewer mistakes.

With the cost of replacing an employee estimated at 100% of their annual salary, and assuming an average salary of £40,000, this would save £40,000 per year in recruitment and training costs if just one person decides not to leave because they buy into your ESG strategy.

ESG, USP - £150,000

For Clients, particularly those with their own public facing ESG goals and reputation on the line, this isn’t just about ticking boxes anymore. Simply put, ESG can be the deciding factor in winning work.

I spoke to a prospect last week who told me a whopping 70% of a recent tender was weighted against ESG. That is massive (and obviously why they are talking to us).

Let’s say you are a company that wins contracts worth £50 million per year. Enhancing ESG practices could increase the value of awarded contracts by 10%, an additional £5 million in revenue annually. You make 3% profit on this, that’s £150,000 profit that can be attributed back to ESG. When you invest in ESG you can also factor in an increased tender win rate i.e. you’re going to need to submit fewer tenders and save pre-con costs too.

“We’re spending how much? On what now?” - £50,000

I was at an ESG conference earlier in the year and one of the speakers said, “you can talk strategy and plan all you want, but it’s only when you go on the journey that you start to see the actual opportunities.”

Effective ESG management will go hand-in-hand with cost savings, particularly when it comes to waste, water, and energy management. Tracking resource usage in real-time and identifying areas where inefficiencies exist will significantly reduce waste, lower energy consumption, and conserve water, all of which directly impact your bottom line.

For a company with annual utility costs of £500,000, implementing data-driven ESG initiatives could reduce these costs by 10%. £50,000 in annual savings.

Risk - £1,000,000

Construction companies and decision makers face significant risks if they fail to comply with ESG-related contract clauses and legislation. Non-compliance can lead to withheld payments, contract cancellations, legal action, damage to brand. By ensuring investment in your ESG processes you stay on top of the data, evidence good work consistently and reduce the risk significantly.

For a company with annual contracts worth £50 million, non-compliance could result in penalties or withheld payments amounting to 2% of contract value. By mitigating these risks through effective ESG management, the company could avoid potential losses of up to £1 million annually.

Summing up

Fast maths and some round numbers I know (I was a Design Manager, not a QS) but you can see how it starts to add up, regardless of the size of the business.

• labour cost
• staff turnover
• fewer submissions
• additional profit
• savings - waste / water / energy
• avoided penalties / withheld payments

You can get your own personalised ROI report using the link below or if you'd like to chat about your ESG goals, you can also email me.

SustainIQ | ESG Return on Investment Report

Michael – [email protected]