1. STRATEGIC DIRECTIONSOF AUSTRALIAN CONSTRUCTION
COMPANIES TOWARDSSUSTAINABILITY
Fatima Afzal1, Dr Benson Lim2, Professor Deo Prasad3
1 PhD Candidate.Faculty of Built Environment, University of New South Wales.
2 Senior Lecturer. Faculty of Built Environment, University of New South Wales.
3 Professor. Faculty of Built Environment, University of New South Wales.
ABSTRACT
Sustainability has become a global business agenda in the last decade. However, construction
organisations have always been criticised for poor sustainability performance. The aim of this
paper is to review the sustainability performance of Australian construction organisations
against the triple bottom line concept. Under this aim, the specific objectives are: (i) to
examine the approaches adopted by construction firms to disclose their commitments to
sustainability; (ii) to review the firms’ annual and sustainability reports; and (iii) to review the
sustainability performance of construction firms against the GRI (Global Reporting Initiatives)
guidelines. This study adopted survey design in which data were collected via review of
relevant organisational documents. Thereafter, content analysis was conducted. The results
show that some large organisations have shown commitments towards all three dimensions of
sustainability. However sustainability is still at infancy level where most organisations within
the targeted sample only stating sustainability values without an indication of actual practices .
Keywords: Sustainability performance, construction organisations.
INTRODUCTION
Construction activities have significant positive and negative impacts. On the positive
side construction activities contribute to national economies; provide employment
opportunities; and provide various facilities to enhance human life.On the other side
construction activities have several negative impacts that include: carbon emissions;
pollution (noise; air; water quality); and waste generation (Sev, 2009). With the
increasing pressures from governments and environmentalists construction
organisations are compelled to reduce these adverse impacts and improve their
sustainability performance (Pagell and Gobeli, 2009; Chatterji et al., 2009).
Consequently sustainability has become an important agenda on the organisational
strategic direction.
Organisational sustainability performance has interested many researchers. The
research ranges from development of frameworks (e.g. Hill and Bowen, 1997; Shen et
al., 2010) to assessing sustainability practices of industries (e.g. Labuschagne et al.,
2005; Hahn and Scheermesser (2006); Jones et al., (2010).

2. This paper adopted a survey research design and aimed to investigate sustainability
practices of Australian construction organisations. The objectives of this paper are to
(i) examine the approaches adopted by construction firms to disclose their
commitments to sustainability; (ii) review the firms’ annual and sustainability reports;
and (iii) review the sustainability performance of construction firms against the GRI
(Global Reporting Initiatives) guidelines. This research offers a content analysis of the
sustainability performance of the top 20 commercial contractors listed by the Housing
Industry Association of Australia (HIA).
ORGANISATIONAL SUSTAINABILITY AND SUSTAINABILITY
PERFORMANCE
The words “sustainability” and “sustainable development” are often used
interchangeably. The World Commission on Environment and Development (1987, p.
8), defined sustainable development as meeting ‘‘the needs of the present without
compromising the ability of future generations to meet their own needs.’’
Organisational sustainability extends the principles of sustainable development to the
level of organisations. From this perspective, an organisation is considered sustainable
if a certain level of performance is attained in all the three dimensions of sustainability
(i.e. social, economic and environmental). Thus organisational sustainability is about
finding the balance between the three main aspects of sustainability. International
institute for sustainable development(IISD, 1992) interpreted corporate sustainability
as ‘‘adopting business strategies and activities that meet the needs of the enterprise
and its stakeholders while protecting, sustaining, and enhancing the human and natural
resources that will be needed in the future’’.
Dyllick and Hockerts (2002, p.131) defined organisational sustainability as “meeting
the needs of a firms’ direct and indirect stake holders (such as shareholders,
employees, client, pressure groups, communities) without compromising its ability to
meet the needs of future stakeholders”. They highlighted that the departure of
sustainability from orthodox management to the triple bottom line concept is the
realization that economic success alone is not a sufficient condition for the overall
long term sustainability of corporations.
Schaltegger and Wagner, (2006) referred sustainability performance to the
performance of a company in all three dimensions of corporate sustainability.
According to Fiksel et al., (1999) sustainability extends beyond the boundaries of a
single company and typically addresses the performance of both upstream suppliers
and downstream customers in the value chain.
MEASUREMENT OF SUSTAINABILITY PERFORMANCE
The most important challenge in organisational sustainability field is to obtain a
widely accepted and robust method to assess firms’ sustainability performance.
According to Montiel and Delgado-Ceballos (2014) there is an agreement on how to

3. measure environmental dimension of organisational sustainability but there is a lack of
clarity on how to measure the economic and social dimensions.
Most organisations use existing frameworks towards managing and reporting their
sustainability performance. The most popular used frameworks adopted by
construction organisations are ISO14000; Global reporting initiative (GRI); and Dow
Jones sustainability Index. Pérez-Batres et al. (2010) highlighted that GRI is a leading
guideline for creating sustainability reports and for analysing firms’ sustainability
performance; thus helping companies to maintain their legitimacy as sustainable
organisations. It follows that this research used the GRI indicators to measure the
sustainability performance of Australian construction organisations as indicated in
Table 1. The GRI reporting framework is comprised of four key elements (GRI 2006):
(1) principles and guidance on the report contents and quality; (2) protocols for
performance indicators and technical issues; (3) standard disclosures on profile,
management approach and performance indicators; and (4) sector supplements, i.e.
how to apply the Guidelines in a specific sector.
Sustainability Dimension Performance Indicators
Economic
financial performance
Market presence
Indirect economic impacts
Social
Labour practices and decent work
Human rights
Community
Product responsibility
Environmental
Materials
Energy
Water
Biodiversity
Emissions and waste
Products and service
Compliance
Transport
Table 1: Sustainability performance indicators adopted by Global Reporting Initiative
RESEARCH METHODOLOGY
This research adopted a survey research design which involved a systematic review of
the contents of annual reports and websites of the top twenty construction
organisations as listed by Housing Industry Association (HIA). Thereafter, contents
analysis was adopted to examine the patterns and frequencies of words and text used
in those organisational documents. According to Weber (1985) content analysis as a
research method is a systematic and objective mean of analysing any written, verbal or
visual communication messages. This method is widely used in sustainability related
research (e.g.: Zeghal and Ahmed (1990); Myers (2005); Afzal and Lim (2012)) to
survey published accounts. Krippendorf (1980) highlighted that the value of content
analysis lies in the assumption that the extent of disclosure can be taken as some
indication of the importance of an issue to the reporting organisation.

4. The sample selection was made considering that large organisations represent the
common trends of the overall construction industry. Annual report from (HIA)
indicates that in 2013-2014, the largest 100 commercial construction organisations
won contracts worth 68 percent of all work started in the year 2013. The amount of
work won by the 20 largest organisations won was considerably large, representing
about 71 percent of the total volume of work awarded to the top 100 commercial
companies in the sector in 2013-2014. Therefore, these top 20 construction
organisations were targeted in this study.
Sample characteristics
Table 2 indicates the characteristics of the sample. The revenue of the companies
ranged between $113,105 million to $7,021 million. This shows that there is a huge
difference in the capacity (10 times) even in the small sample of top 50.
Rank Company No of employees
Total contracts
awarded (million)
1 Lend Lease Pty Ltd 16536 $4,936
2 Thiess Pty Ltd 16000 $2,876
3 Brookfield Multiplex 1135 $2,505
4 BGC (Australia) Pty Ltd 3300 $1,608
5 Leighton Contractors Pty Ltd 14000 $1,552
6 Watpac Australia Pty Ltd 1350 $1,440
7 John Holland Pty Ltd 5794 $1,382
8 Downer EDI works Pty Ltd 20000 $1,155
9 Parkview Group (Australia) Pty Ltd 160 $980
10 Hansen Yuncken Pty Ltd 800 $912
11 Hutchinson Builders Pty Ltd 1400 $727
12 CBI 16000 $717
13 Meriton Apartments Pty Ltd N/A $715
14 Built Pty Ltd 500 $702
15 Mirvac Group 1200 $649
16 Icon Construction Australia 200 $612
17 Westfield Design & Construction Pty Ltd 4000 $586
18 Richard Crookes Constructions 300 $559
19 ADCO Constructions Pty Ltd 400 $542
20 Hamilton Marino Builders 90 $474
Table 2: Selected sample profile
Data collection
For each organisation the annual report and any separate sustainability report for the
year 2013 were collected and analysed. Furthermore organisation’s websites were also

5. researched for any information related to sustainability performance. The analysis of
disclosure was undertaken to identify whether the organisations included
environmental commitments and social responsibility in their annual reports.
Organisations’ sustainability performance were analysed by the reporting of
organisation’s commitments towards all three dimensions of sustainability i.e.
economic; environment; and society. Further analysis was undertaken to search and
identify the following key phrases or keywords from the company website
I. ‘Sustainability’ was selected as a keyword to indicate occurrences of the terms
sustainability, sustainable and sustainable development within the documents.
The context of the keyword was as an indicator of sustainability, which is the
pivot of this study.
II. ‘Environment’ was selected to indicate occurrences of the terms environment,
environmental or environmentally within the documents, involving the
environmental dimension of sustainability. The environmental performance of
organisations is measured by the implementation of projects with as little
environmental impact as possible with the goal of preserving the environment
for future generations (Beheiry et al., 2006). For this purpose the indicators
listed by GRI (see table 1) are searched.
III. ‘Economic’ was selected to indicate occurrences of the terms economic,
economical or economically, and it is a clear reference to the economic
dimension of sustainability. The economic performance of organisations is
measured by the implementation of business practices with the assurance of
future economic growth (Beheiry et al., 2006).
IV. ‘Social’ was selected as an indicator of social and socially thus referring to the
social dimension of sustainability. The social performance of organisations is
measured by its decent work and labour practices; Human rights and
contributions to community (GRI, 2006).
In all cases, the context of the keywords in the organisations’ reports was carefully
scrutinized to ensure that it was used to describe an organisation’s sustainability
efforts. It should be noted that this research only included the reports published
between 2013-2014, any reports published before that were not considered.
RESULTS AND DISCUSSION
Table 3 explains the overall trend of the population sample in terms of public
availability of annual and sustainability reports. Only 50 percent of the organisations
have their annual reports available online. Furthermore the sustainability report could
only be found for 25 percent of the organisations. This small percentage attributed to
the fact that most organisations are privately owned and therefore not required by
Australian regulations to release annual financial and sustainability information. On
the other side most organisations (75 percent) have listed the sustainability
commitment on their websites. This shows that construction organisations understand
the strategic importance of including sustainability into business practices (Faber et
al., 2005).

6. However the depth and coverage of information provided varied significantly. For
instance, Lend Lease has a wide coverage of sustainability topics on its website such
as green building, society, staff development, quality, health and safety where case
studies were provided as exemplars. By contrast, Park View and Richard Crooks
Constructions have only mentioned commitments in one statement.
Annual report
available on
company’s website
Separate sustainability
report available on
company’s web site
Sustainability
commitments on
company's website
No of companies 10 5 15
Percentage 50% 25% 75%
Table 3: Approaches to disclose sustainability commitments
The occurrence of key words on organisations reports and website was considered as
an indicator of how strongly a concept was emphasised within the targeted documents.
The terms “economic” and “financial performance” were found to be highly
emphasized by organisation, representing about 70% of the sample. It appears that
organisations put more efforts towards the social dimension of sustainability in
comparison with environmental dimension. Sixty five percent of the sample indicated
community engagement such as using local resources; employing local people; and
support charity events. Fair work practices (diversity and gender equity); and human
rights are also seen as a top commitment of organisations (60 and 65 percent
respectively). It should be noted that commitments towards employee health and
safety were coded under human rights.
The investigation of Sustainability Disclosure Database of the Global Reporting
Initiatives showed that five (25 percent) of the targeted companies have their reports
endorsed by GRI. It is worth noting that this percentage is very similar to that of top
50 international contractors identified by Zuo et al., 2012. Table 4 shows the trend
Australian companies on the higher rank pursuit external certification for sustainability
reports. It should be noted that Lend Lease (ranked 1st) and Mirvac (ranked 15th) has
been GRI certified since 2006 and 2009 respectively.
HIA Ranking Number of companies with GRI endorsement
1-10 3
11-20 2
Table 4: GRI endorsement of sustainability reports
Figure 1 summarizes the commitments of organisations as available in
annual/sustainability reports and organisational websites. Biodiversity and emissions

7. are identified as the least important commitments of the sample organisations (40%
and 45 % respectively).
Fig 1: Occurrence of key words in organisational documents.
For the purpose of analysis the sample is divided into four groups. Group A comprises
organisations that publish sustainability reports; group B comprises organisations with
sustainability commitments in the annual reports; and group C comprises organisations
with only sustainability commitments on the website. Result of the hierarchical cluster
analysis provided a more detailed picture of the different approaches towards
sustainability of the sample organisations. Group A could be referred as sustainability
leaders. These organisations are motivated by ethical and moral factors. One of the
most distinguishing characteristic of this group is that these organisations have
integrated all three dimensions of sustainability into their business operation. These
include: a) publication of detailed sustainability reports; b) performance measurement
against set targets for waste minimisation; c) high standards towards employee safety
and training. Interestingly the group of sustainability leaders is not composed of high
rank enterprises. However these organisations have a large number of employees
(1200-20000). Overall this group accounts for 25 percent of the overall sample
organisations.
Group B could be referred as traditionalists. Compared with the group of the
sustainability leaders discussed above the significance of sustainability is rated lower
in this group of companies. These organisations have included sustainability
commitments and performance in their annual reports. These commitments are mostly
related to: a) workplace safety and diversity; b) greenhouse gas emissions; c)
community fund raising. These organisations represent 30 percent of the overall
sample.
45%
40%
50%
60%
45%
65%
65%
50%
70%
70%
0 5 10 15
Emissions
Biodiversity
Materials
Resources
Waste
Human rights
Community
Fair work parctice
Financial performance
Market presence
EnvironmentSocialEconomic
Organsiations indicate commitments

8. Group C represents 30 percent of the studies sample. These could be referred as lagers.
This group has only included some statements on their websites related to
sustainability. These organisations have included values/policies related to
environmental protection; work place health and safety and community engagement.
However the implementation of these practices is mentioned in the reports at all. It
should be noted that 3 (15 percent) companies have not included any sustainability
commitment on the website at all.
CONCLUSION
This study adopted a survey approach involving content analysis of top Australian
construction organisations .The results indicate that most of the selected construction
organisations have acknowledged sustainability. However, there is quite a large
spectrum of approaches towards sustainability with in the sample. It could be said that
there are three main groups of practices. The sustainability leaders: this is the smallest
group; and has already shown commitments to all area of sustainability as indicated in
GRI. The traditionalists: this group showed commitments in some areas in the annual
reports. The last group is referred as conservatives. This group has only reported
sustainability values on the website. However there is no indicator on how these
values are achieved. Considering the fact that most organisations (40 percent) belong
to the third group, it would easily be said that sustainability initiatives are at infancy in
Australian construction organisations.
This study provided the insight of sustainability practices of top Australian
construction organisation. However it is acknowledged that the survey data is only
based on publicly available information on organisational website and annual reports
and might not represent the actual practice. Other limitation of this study belongs to
the small sample size and limited indicators used in the analysis thus the results are not
definitive but indicative of an apparent trend. There are numerous possibilities for
future research in this area. For example, future research could go beyond content
analysis; practices of organisations could be studied using questionnaire survey.
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