Managing the unknown unknowns

In the last few years, events such as the collapse of the Rana Plaza garment factory in Bangladesh and the horsemeat scandal across the UK have attracted high profile media interest. This has negatively impacted the reputation of many global brands, something that might have been avoided through improved transparency and better management of supply chains.

What stories like these demonstrate is the importance of knowing what goes on in your supply chain, and the potential damage that can be caused to your business for getting it wrong, not understanding or knowing about the issues, or not being able to articulate what is being done.

With regards to responding to stakeholder concerns, the construction industry has already made some good progress in ensuring the responsible sourcing of timber. The UK Contractors Group (UKCG) reported that in 2013 almost 97% of the timber used had some evidence of responsible sourcing, a significant amount of it with a chain of custody certification like Forest Stewardship Council (FSC) or the Programme for the Endorsement of Forest Certification (PEFC). But there’s still the 3% that wasn’t and, of course we don’t just build things out of timber, there are many other materials that go into a construction project.

Building Research Establishment (BRE) have attempted to tackle this through the introduction of their BES6001 procurement standard, but, unlike timber certification schemes, it isn’t a chain of custody scheme that’s traceable from the source to site. Despite this shortcoming, it has been taken up with great enthusiasm particularly in the concrete sector, perhaps driven by a desire to counter arguments from the environmental lobby about the impact of their products, but also no doubt helped by the inclusion of BREEAM credits for BES6001 certified materials.

One of the challenges in this for construction is dealing with the sheer scale and complexity of the supply chain

One of the challenges in this for construction is dealing with the sheer scale and complexity of the supply chain, so like former US Secretary of Defence, Donald Rumsfeld once put it we have quite a few “unknown unknowns - the things we don’t know we don’t know about” to deal with.

While the construction industry may not always be quite so consumer facing as some of the organisations involved in events like Rana Plaza or the horsemeat scandal, we can nevertheless learn a lot from developments, experience and knowledge from other industry sectors and organisations.

Examples of this include the aluminium Industry who are developing a stewardship chain of custody standard, modelled on schemes in the timber industry. This is supported by producers like Rio Tinto, and commercial end users like Nespresso. The latter, perhaps having now considered that they’ve nailed the ethical and sustainability credentials of the product itself are now concerning themselves with what the product comes in as this too is an important issue for their consumers. This chain of custody scheme could be directly applied to construction products containing aluminium materials too once it becomes available.

A further example is in the retail sector, where over the past decade major retailers have developed the Supplier Ethical Data Exchange (SEDEX). This now covers over 260 different brands, retailers, manufacturers, agents and importers and 20,000 sites in 132 different countries. Rather than set a certification standard, it’s about sharing data on ethical and responsible practices, allowing organisations to analyse and assess risks in the supply chain. This is something that Mace are currently investigating to improve visibility of practices within our own supply chain, particularly for complex mechanical and electrical equipment.

Another important point in all of this is being able to communicate well and to be able to tell the story of what you’re doing with the overall credibility of the message. Businesses start from a difficult standpoint - it could be argued that many people are reluctant to completely trust commercial organisations by default.

In many cases messages are judged not by the content but by their source – i.e. who is telling me this and can I trust them? If people don’t trust the messenger then no matter what is being said it may be perceived as lacking credibility and may be distrusted or disregarded or may have a negative effect as people may consider the message to be cunning as well as untrustworthy.

This is where these certification standards and third party verification can offer value as they can help improve credibility to the message (i.e. it’s not just us telling you, someone else has independently checked it out too).

We can also learn from research into communicating risks about public health issues. Here researchers have identified a number of fright factors and media triggers.

So in managing these issues, ignorance is not bliss, it can be risky. You don’t know what you don’t know and unless you manage these risks carefully you may only find out when they come back to bite you.

Andrew Kinsey is an operations director and head of sustainability for construction at Mace