← Construction Leaders Podcast
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- [00:03]
Carly Trout
Welcome to the end of season three or the Construction Leaders Podcast. All season, we've tried to explore the intersections in innovation, leadership and trends shaping the future of the construction world. This episode will be no different as we dive into a critical topic for the future of construction industry and the.
- [00:20]
Randy Britt
Planet as a whole.
- [00:21]
Carly Trout
Environmental, social and governance, also known as esg, and its growing importance for construction managers. So construction managers are at the forefront of this transformation. In an era where sustainability and ethical practices are no longer just buzzwords, but essential components of successful business strategies. From reducing carbon footprints on job sites to ensuring fair labor practices and making responsible governance decisions, the role of the construction manager is evolving rapidly to help us understand what ESG means in the context of construction management and why it's becoming increasingly crucial for both large scale projects and everyday operations, as well as how construction managers can lead the charge in driving sustainability and ethical practices within their teams and projects. We've asked our chair of our Sustainability committee here at cmaa, Randy Britt, a Senior Sustainability Project Manager at Terravanta, to join us today. Welcome to the show, Randy. Randy, why don't you start off by telling us a little bit about yourself and how you got started down the path of esg. But more importantly, I'd also like you to introduce your guest that you brought with us.
- [01:30]
Randy Britt
Sure. I'd like to introduce everybody to Smitha Radhakrishna. She's an accomplished executive. She's the Executive Vice President for Development and Planning and Maintenance at Tampa International Airport. And she's a very accomplished executive. She came from Dallas Fort Worth International Airport and is now at Tampa International Airport and develop the ESG program at Dallas before she has now transferred to Tampa International Airport. So I brought her to explain her program development at her airport as a business owner representative at her projects.
- [02:06]
Carly Trout
And why don't you tell us a little bit more about yourself and how you got started on the path of esg?
- [02:12]
Randy Britt
Sure. I built a career in long term in building operations and maintenance for energy efficiency and then transfer it into operations and energy efficiency for schools and sustainability and renewable energy. That then led to developing some of the earliest sustainability reports for Parsons International in Pasadena. That was the earliest development of a sustainability program and sustainability report that was available at that time. That then led to the development of an ESG report that included societal implications as well. And then after that, governance was included for programs that was not only for Parsons, for other large CM organizations as well. So environmental, social and governance programs, which is esg. They provide a program and a framework to use to assess operational business practice performance in various sustainability and ethical issues provides a way for businesses to measure the risks and opportunities in those areas, and the results provide an assessment to get a foundation for the development of a publicly available ESG report. While sustainability ethics and corporate governance are generally considered to be non financial performance indicators, the role of an ESG program is to ensure accountability in the implementation of systems and processes to manage a company's impact, such as its carbon footprint and how it treats employees, suppliers and other stakeholders. ESG initiatives also contribute to business sustainability efforts that aim to position companies for long term business success based on responsible corporate management and business strategies. The principles that are fundamental for an ESG program are environmental such as energy efficiency, water efficiency, carbon footprint, waste management, biodiversity, deforestation, social things like fair pay for employees, diversity and equity, workplace health and safety, customer satisfaction levels, community relations, funding of projects or institutions to help poor and underserved communities, governance such as company leadership and management, diversity, board composition and executive compensation policies. So those are the fundamentals of of most ESG programs that companies are involved in today.
- [04:34]
Nick Soto
Randy, thanks so much for breaking that down for us. I know we live in the land of acronyms, so ESG is just another acronym that we've been hearing more about. So we appreciate you explaining that for our listeners. Smitha, let's bring you into the conversation. Since you're coming from Tampa International Airport. From an airport perspective, what does sustainability mean for an airport?
- [04:56]
Smitha Radhakrishna
Thank you Carly. Thank you for having me here in this podcast for Tampa International Airport. Sustainability initially started out as more of an environmental stewardship initiative for the community and as airports are a major player in any region, in many cases as one of the biggest employers, biggest economic engine, and certainly one of the biggest sources of emission. So it becomes incumbent upon us to role model, doing the right thing to not only mitigate our carbon footprint but but also to grow in a smart and responsible way, being a critical infrastructure for the region. The other very important consideration for us is resiliency. Owing to our location by the Bay, we are exposed to potential impacts from hurricanes and flooding four to five months of the year. So resiliency for our operations is a very vital focus for my team. In other words, Carly, both sustainable practices practices and resiliency planning has increasingly become more of a necessity than an option.
- [05:58]
Carly Trout
I want to address this question to both you. I want to hear both your perspectives on us, especially since Randy, you've been around CMA for a very long time. You're committee Chair of the Sustainability Committee some other year on the board this year. So you get the direction CMA has been taking with this. And I'd love to know what is the importance of ESG to construction managers and CMA members in particularly because we know that some people look at it as controversial. Randy, why don't we start with you?
- [06:26]
Randy Britt
Sure. Similar to the development of sustainability resilience practices over the last several years, developing an ESG program lets clients, investors and competitors know that your organization takes environmental, social and governance matters seriously. The recent emergence of an interest by investors, investment companies and organizations of all sizes that have public and transparent ESG programs led to the development of regulations and standards from the SEC to mandate compliance. So proof of an ESG program and report will demonstrate compliance that may lead to greater investments in CMAA member organizations. So it's important to have an ESGM program embedded in an organization, making it part of an organization's culture or business as usual and make compliance for future and regulations much easier. So employees with companies that have well developed ESG related values and mission statements may have more loyal to their employer. They may feel more connected, especially if their core values align with their employers. Employees that are aware of the company's guiding principles or are new to an organization may have a better sense of belonging to the organization. In setting ambitious goals for carbon neutrality and resource efficiency, CMAA members will be showcasing the feasibility and benefits of committing to environmental stewardship by promoting diversity, equity and inclusion programs, engaging with communities and ensuring the well being of employees. This can lead CMA members to forge stronger relationships, improve social outcomes, enhance their reputation. CMA members can demonstrate exemplary performance in their robust DEI programs and active community engagement initiatives which support social equity and drive business success. And last but not least, strong governance practices, including transparent reporting, ethical business conduct and robust accountability mechanisms are crucial, building trust with stakeholders and ensuring long term sustainability.
- [08:18]
Carly Trout
Miller, what is your perspective?
- [08:20]
Smitha Radhakrishna
Nick? Yes, I touched on this a little bit in responding to Carly's initial question. Right. For us, it is just about that stewardship. It's the responsibility to the community we serve and that's really the essence of it. In many cases, it's a smart way to do business, it's a responsible way to do business and it helps us grow in a very responsible, responsible way and feel like it's a duty and obligation for an airport, especially to the constituents, to the communities we serve. And then when you shift gears to the social aspect of it, it's a communication, it's keeping the community involved and internally it's also for the staff engagement, for their wellness. It's all the things that organizations run organizations have been doing for several decades. But we're just being more deliberate about it.
- [09:08]
Nick Soto
So Smith, hearing about all the benefits of this type of program, how does an airport go about to create a program like this? And I'm wondering if you can share maybe a little bit about the challenges as well.
- [09:20]
Smitha Radhakrishna
Sure. Absolutely. Absolutely. I would say the first basics of setting up a successful sustainability program for any organization are three P's which is policy, plan and position. As step one, the organization should create a formal sustainability policy, get it approved by the CEO and get it to adopt. If there is a board for the organization, get the board to adopt it. Essentially you need to demonstrate the leadership's buy in and their commitment and support is what's going to guide the program's trajectory over the years. In our case, our CEO Joe Lapano authorized the setting up of our sustainability policy in 2012. So that was first P. The second P is plan. The second step from there is to create a formal sustainable management plan or snp. That is very important. Our master plan consultant for the airport is one who created our very first sustainability management plan at tpa. And then the third P is position. Then comes the need to dedicate a position solely to lead this program. We brought in our sustainability manager, Eric Kaplan. He was hired to head this program for us. And then within the sustainability management program you will have to set specific goals, environmental goals, social goals. On environmental side, for example our goals we have specific goals towards energy, towards water waste, carbon emissions. On the social side, something I touched on, we have goals towards staff wellness, staff engagement. We even have a people master plan that goes in those lines and goals for community engagement. You will also have to set up a consistent way of updating this SMP with timelines to achieve these goals and have recommended ways to tackle them. Then it is of course up to the individual departments and teams to get creative about how to get to the goal. For us in 2019 we added resilience planning to our SMP and our the latest addition we have is electrification. And I would say for airports, one other key consideration as they set up their sustainability program and get off running is to consider enrollment into the Airport Carbon Accreditation program. It helps you create a focused roadmap for your goals. You can achieve different levels of accreditation based on your commitment. TPA is right now at level two and focusing our efforts towards level three which you start getting into Scope three emissions realm that is trying to track everything that happens outside your footprints that you are going to Start using. And I think the biggest challenge early on is to start that cadence, right? The whole organization to buy into this. And that's why this is looking back in hindsight, what made us successful is being so disciplined about 3ps. You have to do that to create that foundation and then you get the entire organization bought in and then you get the rigor around it.
- [12:28]
Carly Trout
You mentioned three Ps. What are those three Ps?
- [12:32]
Smitha Radhakrishna
Policy, Plan and position.
- [12:35]
Carly Trout
Thank you, I appreciate that. Just in case somebody wasn't sure. And he spoke a lot about resilience and sustainability. I know at DFW that was one of the primary focuses. Matter of fact, you guys won an award for your program sustainability. Is resilience planning a primary focus for airports? If so, how can that be intertwined with sustainability initiatives versus how is it different?
- [12:58]
Smitha Radhakrishna
That's a very good question. So resiliency is increasingly becoming a primary focus for airports and a major component for responsible capital program and master planning. So Walnut, you would have heard vulnerability assessments, resilient action plans and capital projects, projects that are dedicated to adding resilience to critical infrastructure, whether it's from a climate change related weather impacts or to power grid unreliability or sabotage, you name it, has become common vernacular now at airports. But I can see how they are deeply intertwined with sustainability. Right. In many ways the difference is resilience planning is seen as addressing the current issues that we are facing, while sustainability is helping it reduce future climate related impacts. A nuanced distinction. Resilience can incorporate sustainability initiatives in so many cases, like renewable energy projects, microgrids, which you might have heard of, electrification, electric vehicles. But it can also be a separate initiative altogether from sustainability. Like if you want to diversify your fuel source. Right. If you want to fortify your power and utility network, that that's its own resilience track and not necessarily sustainability.
- [14:13]
Nick Soto
Randy, I was going to ask you as chair of CMAA Sustainability Subcommittee, can you share a little bit about what the committee's activities are and how they're informing the membership on the ESG topic?
- [14:26]
Randy Britt
Sure. We've got a great committee for 2024. We've got, in addition to Smith and myself, we have Dita Bernstein, we've got Ben Weinstein, Jeff Bowling, Lorda Gonzalez, Kiana Bella, Joyce Dawson, Susan Stewart. And we really have been working very hard to put together this report that we're developing. Everybody's been volunteering their time, their resources and their efforts to research sources of information that'll provide CMA members with a comprehensive guidance document that's going to include some of the things we've talked about today, like the definitions of ESG programs and reports and the importance of ESG programs for members, not just for CMA members, but the importance of ESG to the construction management industry. To find some of the current emerging and competing regulations that are out there regarding esg, some examples of the ESG programs that are implemented by CMAE members, identifying some of the organizations that are likely to be required to develop near term ESG programs, some of the key performance indicators that are being used to measure success in ESG programs, and then some of the conclusions and recommendations for CMAA members. And so the committee's been working very hard to put this report together and we've finished the first draft as of now, we've shipped that off to CMAA leadership for their approval and that's in process right now and we hope to have it ready and available for dissemination by the time this podcast is released and available. And I will be representing the committee in upcoming conferences to deliver this in person and hope that I'll be able to speak to people in person about it at future conferences as well.
- [16:17]
Carly Trout
Thank you, Randy. I've got a question that I want to direct again to both of you and we'll start with you submit that, but I want to talk about the things that people most want to hear about lessons learned. What are some hurdles for sustainability that you've seen at the airport? Now you've gone from DFW to Tampa, but I also want to hear from you as an owner. But then I want to hear from Randy, you as a service provider. What kind of hurdles are you seeing people as they try to implement some sustainability planning?
- [16:45]
Smitha Radhakrishna
Couple of big lessons learned and some of the things that have went well. And why is one like I mentioned early on, right it is getting that top down buy in and that sponsorship right from the CEO and the board of directors, all of them adopting it. At that point it becomes an official initiative for the organization. So that is one big unless you have that, it's going to be an uphill battle having to justify the why behind it. The other big lesson learned is giving people people access to the big picture is just so paramountly important whether and in very simple terms understandable by all kinds of people with what any kind of background right within the organization. Just it could be little videos or cartoon representation, some way to demystify what these terminologies mean, what these goals really lead up to to show them the roadmap. This is where we want to go, this is where we have come. This is where we need to go in order to get there. This is what we need to do. You have to break it down, demystify, use simple terms for the messaging.
- [17:54]
Randy Britt
From my perspective, I've been fortunate to have been blessed with support from leadership from the top. It was the in between folks that were difficult to work with. When I was first brought into the Los Angeles Unified School District to be their first director of Sustainability Initiatives. I was brought in by the board of the school district and by the chief facilities executive with their full support, which was great. But the middle section of executives and managers didn't believe much in sustainability at the time. They thought it was a passing fad and it wasn't going to last very long and didn't really see much benefit in it. And I was going to be there to do a job and be gone probably in the next year. And then when they realized it was really going to happen and there was really work that was going to be done and it was going to receive funding and it was going to save the district money, then they finally bought into it. It finally started to take hold. And then the same thing happened at Parsons a few years later. We started getting a lot of work done that way too, but the same thing happened. I had a lot of support from the chief executive officer at that time and then I got a call from him, the chief executive officer from Parsons at that time. He said he got a call for leadership at CMAA and they asked me if I wanted to be the chair of the sustainability committee. But that was back in 2012, I believe. I accepted it at that time. And again, leadership at CMA was very keen on it, but rank and file membership, I wasn't really keen on sustainability at that time either. And I made the first presentation on resilience in 2014, 2015 time frame, and it wasn't very well received or known at that time as well. They thought I was talking about a time warp in the future, that I was talking about something that hadn't happened yet, but we'd already had Superstorm Sandy at that point. And I was talking about taking measures to prevent catastrophic damage in the future tense and talking about advanced mitigation and trying to prevent damage like that from happening by taking sensible preventive measures. And so those are the kinds of things that, yes, getting leadership is sometimes very difficult, as Smith has said, but when you do get leadership to buy in, it's sometimes difficult to get the folks in between to accept it as well. And you have to work with those folks as well to make sure that you're getting a complete buy in from everybody. You need to have support with.
- [20:20]
Smitha Radhakrishna
Randy, you bring up a very good point talking about funding. One of the big lessons learned is really think from the audience when you go to ask for funding, be it for sustainable investments or for resiliency investments, unless it is something that is near and dear to people's heart or they have just experienced an outage from the grid or a huge hurricane related impact or a snowstorm they don't comprehend or many people do not comprehend why the investment in these right now when we have other pressing needs. So to get the mindset involved in giving examples and if applicable showing ROI return on investment on some of these, right. The flip side of how long it took you to get back on your feet after a disruption, that kind of examples. Also a big focus on grant opportunities. So you have to think wider in being able to be able to bring everybody alongside in investing in these requests.
- [21:23]
Carly Trout
That was going to be my next question was how do investors view the ESG programs and reporting?
- [21:29]
Randy Britt
Randy so in terms of ESG reporting, I think that investors look at it as not just a checking the box issue. They see it as my investor wants this in a company. They want to see that you've got solidity your investments in your people, you're doing your HR things properly, you're doing your investments in your communities and you're doing your environmental issues as well. And if you're not doing those things, the people that give me their money to invest, whether you're Edward Jones or you're any other investment broker, they want to be able to tell that their investors, they're putting their money where they've been instructed to by their investors and it's a flow through dynamic that really needs to be verified. It's not just a matter of this company, ABC Company told me that they were doing it. So I have to take their word for it. That's not good enough anymore. They have to prove to me that they're doing it and they have to prove it with a third party verified report so they can publish the report. It has to be verified by a third party that's willing to back it up with documentation and if necessary we have other kinds of documentation that goes along with that. So I think that there's a need on the part of investment community to confirm for their investors that what a company says they're doing, they are doing. And it's not just for profits. Now, it's not just for their profits, it's not just for their cost margins. It's actually for what are they doing in terms of the environment? What are they doing for their governance? Are they really being managed the way they say they're being managed? Are they really taking care of society? Are they really doing the charitable causes they really say they're doing to the extent that they're doing, Are they really involved in their community? And those are the kinds of things that people want confirmation of to make sure that the money they're giving to them is, is really going the way that they say they Smith, we have.
- [23:41]
Nick Soto
Time for just one more question and I was wondering how you see sustainability initiatives evolving in the future. Are there any particular innovations we should be on the lookout for?
- [23:52]
Smitha Radhakrishna
I would say definitely and it's not in one particular area. I feel like there is a lot of evolution and innovation happening in various areas and no particular priority. I think in electrification. Right. Initially it was all electrification. For example, we moved 20% of our fleet has been transitioned to alternate fuel and we have a target of 50% transitioning by 2030. But we are looking at hydrogen as an alternate fuel. So it's beyond electrification. It's more of about zero emission vehicles because today it's not there. Tomorrow hydrogen might be produced at scale and it could be something else that gives you the range and whatnot. So that is definitely a huge area of evolution in the airport realm. You might know about ground support equipment, the equipment that supports airline operations within the ramp area. Electrification of that. For us, the next airside that we are in design phase for, it's going to be 100% ready with electric GSE. Right now we are not there, but we see that it's going to be there by the time that terminal is built. Thinking of other things, yes, electric vertical takeoff and landing, advanced air mobility. Tampa is one of the first airports in the US to incorporate EVTOL and advanced air mobility planning into our formal master plan. So what that means is we have designated locations in our master plan for potential future EVTOL infrastructure that supports electric advanced air mobilities. And then a lot of airports are starting to do it, making sure that their entire cooling and heating moves from fossil fuel powered to electric and hydrogen later on. We for one, our cooling is all electric and the future is obviously looking at other sources. So those are definitely some big examples. I think some of the things Les talked about is also zero waste. That's becoming another big focus. We were fortunate just a year and a half, two years ago that in Tampa, all our non recycled trash is now completely being diverted away from the landfills and it's going to The City of Tampa's McKay Bay waste to Energy Plant. So getting creative about how you can divert not just construction waste, but also regular waste away from the landfills is a big focus.
- [26:19]
Nick Soto
Those all sound really great. It sounds like there's a lot. There's a lot going on in sustainability and a lot to look forward to in the horizon. So thank you so much, Smitha and Randy. It was really great to have you on the podcast today. For more information on esg, including recent white papers and other resources, you can check out the CMAA website@cmaanet.org that's a wrap for season three of the construction Leaders Podcast. But don't worry, Nick and I will be back before you know it for Season four with more discussions around technology trends, workforce culture, attracting new talent, lessons learned from difficult projects, and how to advance your career as a cm. To catch all the episodes from this season and to get that notification when we drop Season four, make sure to subscribe to the podcast and follow us on social media maahq Also, it would be great to hear your thoughts on any of this season's episodes by leaving a review and to hear what topics you're interested in the future. On behalf of cmaa, I'm Carly Trout with Nick Soto. It's been a pleasure and thanks as always for listening.