Cost and Risk

To remain a profitable and valuable company we must effectively manage our costs and risks. We believe that to truly evaluate the risks and costs of our operations we must include sustainability within the assessment process. However, as the costs and benefits of sustainability impacts cannot be easily measured in a concrete way we have sought to identify alternative ways of measuring this risk.

Firstly, within our business winning process we have a defined activity for deciding whether to bid for or undertake any given project. We believe that if we identify risk at the very start of a tender or project then we are more able to control and mitigate that risk. This risk assessment includes financial assessments and the identification of sustainability risk. This will enable our senior management team to make informed decisions about the sustainability impacts and the associated costs and risks of our future projects.

In addition to determining whether there would be sustainability impacts associated with Carillion undertaking a given project, we have also sought to identify the sustainability costs and benefits of projects. This has been a difficult process as many sustainability actions have non-measurable benefits. To try to develop a robust assessment of the costs and benefits of sustainability impacts we took part in a 17-month DTI funded, multi-collaborative project researching the process for quantifying the environmental and social costs and benefits in construction projects and initiatives.

The following points are a short summary of the primary outputs from the project:

The full project report is entitled Sustainability accounting in the construction industry