Webinar highlights crucial building blocks for greener contracting

10 May 2022

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The latest event in FIDIC’s 2022 webinar series was an event organised by the FIDIC Contracts Committee on 10 May entitled “Greening FIDIC's rainbow contract suite – let’s do it!” which looked at integrating net zero clauses and embedding sustainable performance criteria in the FIDIC rainbow contract suites for works and services.

More than 200 global construction and infrastructure industry professionals attended the webinar, which was chaired by FIDIC Contracts Committee member Kiri Parr. The speakers panel included Adriana Spassova, a partner at EQE Control OOD and a member of the FIDIC Contracts Committee (Bulgaria), Emeline Oudin, head of procurement support division at the Agence Française de Développement (AFD) (France), Eugenio Zoppis, project manager at Webuild (Italy) and Millie Farmelo, a solicitor at Arup (United Kingdom). The panel was also joined by FIDIC president Tony Barry (Australia).

Introducing the webinar, FIDIC president Tony Barry said: “At FIDIC, we are extremely exercised by the sustainability and net zero agenda. And so we should be! The construction industry has a huge impact on the sustainability of our world. The industry’s transformation from a big polluter and resource consumer towards a sustainability enabler is happening, but still too slowly to meet climate emissions targets.

“FIDIC has a proud record in this area and as an organisation we have been focusing on sustainability for more than 100 years. In fact, it is one of the core values of FIDIC. We also recently launched our FIDIC Climate Change Charter to encourage engineers to take the lead to plan, design and develop projects in line with the UN sustainable development goals. Our contracts will play a key role in this.”

Speaking first, Adriana Spassova, a partner at EQE Control OOD and member of the FIDIC Contracts Committee, highlighted that sustainability was one the FIDIC founding principles adopted in 1913 alongside quality and integrity. “We will not meet the UN sustainable development goals and net zero if we do not engage at every level from the top right down to the individual,” she said. Turning to the recommendations outlined in the FIDIC Climate Change Charter, Spassova said that project procurement and risk allocation in contracts needed significant change. “Innovation, carbon reduction objectives and metrics are required at project level and reporting on progress at the project level is intrinsic to climate-responsible engineering,” she said. There was already much in the FIDIC contracts that could be used to ensure a more sustainable and net zero compliant approach to contracts and the industry should be aware of this, she concluded.

Emeline Oudin, head of procurement support division at the Agence Française de Développement (AFD), said that 50% of the AFD’s annual financing (€12bn in 2021) goes to projects that have a direct and beneficial impact on the climate. “So, in 2021, AFD Group committed €6bn to fight climate change and its effects,” Oudin said. She also highlighted some of the environmental, social, health and safety measures (ESHS) that AFD had stipulated on its contracts and also made the point that AFD had also added clauses in its contracts for sanctioning a contractor not meeting the requirements of the ESHS specifications. “It is vital that contractors understand the importance of ESHS measures on our funded projects and we highly recommend that FIDIC contracts are used as these are industry standard,” she said. Oudin also mentioned the additions that AFD had made to the FIDIC General Conditions of Contract on environmental and sustainability requirements and the sanctions for non-compliance.

Civil engineer Eugenio Zoppis, a project manager at Webuild, gave a contractor’s experience of addressing greenhouse gases and sustainability. “In practice, the commitment of the industry to decarbonise construction projects must be expressed through mandatory or voluntary adhesion to the recognised standards and guidelines,” he said. Zoppis highlighted some of those standards including the FIDIC Climate Change Charter, the International Finance Corporation (IFC) Environment and Social Performance Standards of the World Bank and the bank’s Environmental and Social Framework.

Zoppis also talked about what could be done on large projects in the areas of conservation, restoration and afforestation. “These include limiting interference with natural environment, avoiding cutting trees, developing tree and grass nurseries or securing their supply, restoring areas that were cleared or used for temporary works and also planting trees in the affected areas and in nearby areas as a compensative measure,” he said. “We have to have a circular economy for sustainable products,” said Zoppis. “Moving towards net zero involves all participants in a project – employers, developers, contractors, engineers, designers and suppliers – and we need a joint approach and a real collaborative effort if we are to reach these net zero targets by 2050,” said Zoppis.

Final speaker, Millie Farmelo, a solicitor at Arup, talked about how consultants can have a positive influence on the drive towards net zero. “As the consultant on a project you have influence downstream through the contract supply chain, including with sub-consultants. We can also use sub-contractors to collect carbon data and enable other members of the team to make smarter decisions – but this means that the whole supply chain needs to work collaboratively and the contract needs to enable this,” she said. Farmelo said that Arup was starting to see some ill-conceived “heavy-handed ways” of allocating risk in contracts and care needed to be taken when reviewing contract forms. She also highlighted that consultants needed to try to achieve an open dialogue with clients on climate change issues and make recommendations on reducing carbon later in the project cycle.

“Responding to client change requirements on contracts will require all parties to be more agile. Consultants should also be considering how they can influence the industry more broadly, including with its contracts and project governance,” she said. In this regard, working with global representative organisations like FIDIC was crucial in fostering more widespread collaboration and industry discussion on the key issues, Farmelo said. “Including net zero and sustainability clauses in our contracts is just one part of what we need to do – working in partnership and with true collaboration is also important too in order to encourage innovation,” she concluded.

There were a number of questions from participants and discussion amongst the panellists about the issue of the cost to clients of implementing green measures on contracts. A key point which emerged from this discussion and questions was the need for more collaboration, developing a culture of partnership between all members of the project team and fostering a much more open approach. This further highlighted the point made by Arup’s Millie Farmelo in her contribution that including net zero and sustainability clauses in contracts was just one part of the solution and that the industry needed to work in partnership and with true collaboration to encourage more innovation and achieve sustainable solutions.

Chair Kiri Parr said that the industry has had environmental, social, health and safety provisions in its contracts for many years in many jurisdictions, but “what are we going to do to specifically about de-carbonisation?” Responding, FIDIC president Tony Barry said that, amongst other measures, product manufacturers and suppliers should certainly be asked for statements about embodied carbon. “People are starting to try these things and undertake more carbon monitoring and it’s time that the industry embraced this more and help to define a new way forward that will focus on decarbonisation. The tools are there and we just need to use them,” he said.

The next FIDIC webinar, which is organised by FIDIC’s Future Leaders Advisory Council, is entitled “Around the world in 90 minutes: changes and future trends in the delivery of consulting engineering services”. The webinar will provide an international perspective of what the next generation of consulting engineering professionals consider to be the most important changes and future trends impacting the industry.

Click here for full details and to book a free place at this webinar

View the full webinar recording on the link below.

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