How SRI’s Can Benefit the Construction Industry
[and Everyone]

By Edward Olivera

While a look at an SRI holdings will offer you companies in manufacturing, retail, technology and other business sectors, it appears logical that the construction industry stands poised as the most influential area that will have to put its money where its mouth is. Until the world becomes colorblind to Green and certain practices are universally adapted, sustainable design will remain the exception rather than the rule.

The trends of SRI affect a host of construction-related industries, including equipment and material manufacturing, real estate, and power, as well as builders themselves. The fact is that the built environment more directly affects the natural environment because of the way in which it impacts land use and natural resources. Without a new direction in which SRI companies point the way, the construction industry and its satellite industries will stall if not fail.

For companies poised to embrace Green principles of design and building, this is a win-win situation. In other words, although it is the socially responsible thing to do, it is more than mere altruism. These are the companies that future investors will watch for their performance as well as their good works, as sustainable practices become a more commonplace part of doing business in the construction industry. Put another way, those who find themselves on the wrong side of the curve as sustainable practices become more adapted and even mandated are going to increase
their risk of failing to thrive.

There are several key areas that the industry will be evolving and developing, keeping in mind that our traditional markets of housing, transportation, and vertical construction among other sectors will necessarily become involved with related industry developments. For instance, in areas that directly affect supply and demand, SocialFunds.com (www.socialfunds. com), a website of SRI World Group, Inc., a research and consulting firm, offers detailed information about top wood product companies that support sustainable forestry practices, as well as those that are less rigorous in their standards and merely desire some ecological cachet. One of the holdings of Portfolio21 (www.portfolio21.com) – a global equity mutual fund that invests in ecologically, superior products – is British Land (www.britishland.com), a property development and management company that gathers several concerns under its planning including
alternate transportation systems, water resources, brownfield re-use and multiple use of structures. Skanska,
(www.skanska.com), the worldwide construction giant, is committed to elevating building standards in Europe and has lobbied the EU to increase efficiency. Skanska is one of the few construction companies to be found among Green investments but serves as a model for what is achievable and how construction companies can take the initiative as leaders in sustainability rather than considered as one of the bad guys.

JM, (www.jm.se), a Swedish construction and real estate firm noted for its commitment to sustainable building practices, is among Portfolio 21’s Top Ten Picks for 2006. JM has been proactive with its development of key performance indicators such as employee training, monitoring of CO2 emissions, the energy efficiency of the buildings it develops, creating a database of preferred building materials, and communication outreach to the broader industry.

As part of the power of Green Investing to make a serious difference in the way we do business, the US Green Building
Council (USGBC), a coalition of leaders in the building industry, has recently announced plans to purchase the first federally sanctioned Green Bonds being sold on Wall Street. The AAA rated bonds are part of $2 billion being allocated by the US treasury for four large projects around the country. The Syracuse Industrial Development Authority is issuing
the first $238 million for the Destiny USA Project in New York. USGBC calls this $20 billion project the world’s largest green building powered by renewable energy and will house retail, hospitality and entertainment.

Some companies in the construction and related industries are taking their own initiative to employ sustainable development practices and policies and thus becoming attractive candidates for SRI investors. Lafarge, the worldwide construction materials behemoth, is addressing several environmental issues and shows a high level of corporate transparency. It acknowledges, for instance, its releasing 89.3 tonnes of CO2 into the atmosphere in 2005 and announces its plans to cut emissions produced by cement plants by 20 percent worldwide by 2010 as well as a 10 percent cut in absolute emissions in industrialized countries. This represents a greater share in the responsibility by industries to cut such emissions as outlined in the Kyoto Protocol of 5.2 percent. Portfolio21 recommends other construction-related companies with sustainable initiatives in their operations. Schnitzer Steel (http://www.schnitzersteel.com) processes over 4.9 million tons of recycled ferrous and non-ferrous metals annually with an annual production of 700,000 tons of finished steel products. Schnitzer uses mini-mill technology and strategically places its operations in proximity to suppliers and transportation routes. Suntech Power (http://www.suntech-power.com),
a global solar energy company based in China, manufactures photovoltaic (solar) cells along with research and development into solar energy. Potlatch (http://www.potlatchcorp.com) is using cutting edge green forestry techniques to sensitively employ new standards in stewardship of forestry lands and processing of pulp. Severn Trent
(http://www.severntrent.com) is a British water and wastewater utilities services company engaged in building urban drainage systems, segregating waste, and developing waste minimization techniques such as collecting methane gas for energy from landfills.

SRI is not only a good way to invest, though it is that. It is also a means of change through advocacy and a tool for learning. Among the best websites for learning more about green investing is www.greenmoney.com, a font of good information and articles on SRI issues worldwide that are well-written and researched. www.socialfunds.com offers detailed information on a variety of funds and news with a convenient SRI Fund finder. www.socialinvest.org is a national nonprofit membership organization dedicated to promoting the growth of SRI. www.sustainablebusiness.com
carries up to date news, investor news, business resources and information on stocks’ performance.