Four Reasons the Construction Industry Needs Supply Chain Transparency

While the food, apparel and luxury sectors have embraced supply chain transparency in recent years, construction companies have been slow to make their supply chains transparent. Recent regulatory crackdowns in Europe and North America mean that the days of opaque construction supply chains are numbered. 

Here are four of the most important reasons why construction companies need to implement supply chain transparency and traceability NOW:

Building materials made with Forced Labor

As of September 28, 2022, the List of Goods Produced by Child Labor or Forced Labor,  comprised 159 goods from 78 countries, including bricks, furniture, mica used in paint, glass used in windows, and copper used in plumbing. That means importing these products could result in seizures under U.S. Tariff Act Section 307 (the “Forced Labor Ban”) or financial penalties under the French or German supply chain due diligence laws.

Deforestation

Wood, engineered wood, and paper products including chipboard and wallboard are all subject to new supply chain transparency requirements under the European Union (EU) anti-deforestation law of 2023. Companies importing any wood-derived products need the GPS locations of the forests where the wood originated, and to verify these forests do not pose a high risk of deforestation, in order to import these materials into the EU.

Labor on Construction Sites

The use of trafficked and bonded labor poses a huge reputational risk to the construction industry, not only for builders but for clients and everyone involved in the construction of a major project: architects, engineers, financiers, even the politicians associated with the project. Due diligence must be carried out whenever foreign laborers are contracted to ensure labor standards are upheld.

Recycling and Certified Materials

The sustainable building industry has embraced the use of certified sustainable and recycled materials, but if the food and apparel industries have anything to show, it’s that conventional materials are often passed off as sustainable when there is a significant price difference to be obtained. That’s why certifiers have started to require traceability to ensure that every piece of material sold as sustainable can be verifiably traced to a sustainable source.