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Environmental Sustainability in the Construction Industry: A Case Study of Persimmon Plc

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Added on 2024/07/01

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This report examines the ethical and CSR practices of Persimmon Plc, a leading UK house builder, focusing on their environmental sustainability. It explores the challenges posed by increasing pollution and energy consumption in the construction sector, analyzing the impact on stakeholders and proposing solutions. The report advocates for the adoption of waste energy as a sustainable practice, emphasizing the importance of ethical decision-making and responsible management in achieving environmental sustainability.

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BUSINESS ETHICS ORGANISATIONS AND SOCIETY
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Executive summary
The increasing business of construction in UK is resulting in increased amount of environmental
pollution and other such problems. It is important that business firms operating in construction
sector should adopt sustainable practices so that they are able to reduce their impact on the
environment of the country. In this assignment, a report to the manager of Persimmon Plc has
been developed. The report covers the benefits of adopting CSR activities that encourages the
organization to practice corporate social responsibilities in an ethical manner. The issue of
increasing pollution could be resolved by following eco friendly practices.
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Table of Contents
Introduction......................................................................................................................................4
Responsible Management and CSR.................................................................................................5
Values Underpinned by Ethics........................................................................................................ 8
Exploring your issue...................................................................................................................... 10
Advising your company.................................................................................................................14
Conclusion..................................................................................................................................... 16
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Introduction
Ethics and CSR are two of the most important aspects of any business firm. Ethical practices are
necessary in order to maintain a fair practice within the organization. In addition, CSR initiative
of the company helps the firm in building a positive brand image among the local community.
This report will be developed by the counsellor of Greenleaf Consultancy for their client
Persimmon Plc in order to evaluate their ethical and CSR practices for environmental
sustainability. Persimmon Plc is a popular British house building company that has it’s
headquarter located in York, England. This organization has been publicly quoted since the year
1985 and today it is considered as a FTSE 100 company with a capitalisation of around £7bn
(persimmonhomes.com, 2018). This assignment will explore the significance as well as issue
within the CSR and ethical practices of Persimmon Plc on the environmental sustainability. The
company is facing issue of increasing pollution due to their activities and toxic discharge that
damages the environment. The company’s policy is to ensure that their activities do not hamper
the environment and they follow various legislations of the government to improve their
practices.
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Responsible Management and CSR
Corporate social responsibility is considered as an international private business self-regulation
model that assists business organizations to be socially accountable to its stakeholder, the public
and to itself (Schwartz, 2017). Practicing corporate social responsibility an organization can gain
consciousness regarding its ethical impact on different aspects of the society such as social,
economical, and environmental. Increasing number of consumers are gaining awareness
regarding the importance of responsible management and are demanding more companies to be
socially responsible. Responsible management is the technique that helps company to operate in
a more sustainable and responsible manner towards their employees, society and the
environment. Persimmon Plc should develop a number of CSR activities in order to reduce their
harmful impact on the environment and enhance their environmental sustainability.
Figure 1: Aspects of CSR
(Source: Sector, 2018)
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Few benefits of CSR activities that will help in improving the performance and business of
Persimmon Plc are as follow:
Satisfied employees: If the CSR activity of the firm will assist the company in reducing the stress
of their operational activity from the environment, then the image of the company will be
enhanced among the local community (nibusinessinfo.co.uk, 2018). Employees of Persimmon
Plc will feel proud to work for a respectable and popular organization. Employees possessing a
positive attitude towards their firm will be more creative and will try to work with full potential
and assist in enhancing the business of the company. Persimmon Plc will receive increased job
application, as most of the employees will like to work for popular organization providing job
satisfaction.
Satisfied customers: It is observed that concerns regarding the degrading conditions of the
environment are increasing among the consumers of UK. Consumers are more inclined towards
organizations that adopt eco-friendly practices. If Persimmon Plc enhances their sustainability
practices, the attitude of the consumers will be more positive towards the organization and thus
their association with the firm will increase. Satisfied customers will suggest the services of the
firm to their peers, which in turn will increase the consumer base of the firm.
Increased business opportunity: CSR programs will help the company to gain recognition and
business opportunities. The management of Persimmon Plc will be required to engage with the
suppliers, consumer and other stakeholders on a regular basis. Thus, adopting CSR activity will
allow the firm in gaining information regarding any new development in the business field and
they can avail the opportunities.
However, there are certain issues associated with adoption of CSR activities that should be
considered by the management of Persimmon Plc are as follow:
Increase in cost: From an administrative perspective, it can be stated that certain CSR initiative
can end up being expensive. The management of Persimmon Plc will have to pay salary and
recruit a team in order to analyse the environmental requirements and develop CSR plan as per
the analysis. The entire campaign activity of the CSR will contribute towards increasing the
financial expenditure of the organization.
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Green washing: Some critics are of the opinion that corporate social responsibility can be an
exercise in futility. It is evident that the management of the company is responsible towards their
shareholders and the CSR activities oppose this. The responsibility of the manager is to increase
the profit of their company. For example, if the manager is dedicated towards collecting profits
in order to donate to social cause may lose his job to some other individual or manager for whom
profit is more important. That is the reason due to which some organization speak about CSR but
they do nothing, this is termed as green washing. Persimmon Plc can also face the issue of green
Staff morale: The implementation of CSR activity will require heavy workload and this can have
significant impact on the morals of the staffs of Persimmon Plc. If the employees are requested
to for extra hour without any pay or appreciation then they might feel low and ultimate move out
of the firm (Tai, and Chuang, 2014). Thus, it would increase the labour cost of Persimmon Plc,
as they will have to recruit new candidates and provide them with appropriate training.
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Values Underpinned by Ethics
Ethics is a branch of philosophy that deals with the basic principles of morality. It helps in
defining standards of rights and wrongs that assists in prescribing the human characters and
conducts in terms of rights, rules, obligations, fairness and more. It is suggested that Persimmon
Plc should try to implement ethical theories in their business organization so that they can
address their issue of environmental sustainability in a more beneficial and fair manner. Ethical
theories will allow the company in gaining the trust and loyalties of their consumers. Consumers
may allow a business take advantage of them once, however if they believe that the firm has
treated them unfairly they will stop associating with them. Ethical practices are important to
build strong employee relation. It is evident that talented candidates at different level of business
organizations expect to be compensated in a fair manner for their dedication and work. They
want to build a strong career based on the quality of their work. Companies practicing ethical
codes will promote fair employment practices. Thus, building a positive image among the
consumers and gaining the confidence of the employees will allow Persimmon Plc to implement
CSR practices that would help them in reducing their negative impact on the environment
As the Persimmon Plc is having issues in their sustainability practices, it is suggested that they
should try to implement Utilitarianism Ethical Theory or Egoism Theory within their firm so that
they can improve the behaviour of their employees so that company is able to implement the
required sustainability practices to reduce their impact on the environment.
Utilitarianism: Utilitarianism is a theory based on the individual’s ability to predict the
consequences of their actions. There are two basic types of Utilitarianism, rule utilitarianism and
act utilitarianism (Mill, 2016). Rule utilitarianism considers the laws and their fairness. For
example, in order to implement this theory Persimmon Plc will have to abide by the
Environmental Protection Act 1990, of the UK government and must come up with solution to
protect and conserve the environment. As per this act, every citizen of UK is responsible towards
his or her environment and the business firms of the country are expected to maintain
sustainability standards. Act utilitarianism is the practice in which an individual may perform
certain act that will benefit maximum people of the society irrespective of their personal feeling
or certain societal constrain such as laws. However, there are certain drawbacks of this theory,
this theory is based on the prediction capabilities of the individuals however, there is a possibility
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that the predicted outcome may not be correct and thus, the theory cannot be guaranteed. This
theory will help promote ethical thinking among the employees. They will be encouraged to
come up with ways they can benefit the society by reducing the pollution levels of their
organization.
Duty based ethics (Deontology): Duty based ethics is another ethical theory that can be
implemented by Persimmon Plc in order to motivate their employees to be responsible towards
the environment and the society by taking ethically correct decisions (Newton, 2017). According
to deontology ethical theory, there are certain situations in which it seems like some actions are
right or wrong. These situations are not judged based on the consequences or due to their
connection to any virtuous character but because these actions are right or wrong by nature. This
theory states that every individual has certain duties that they are expected to fulfil and
completing these duties are their moral requirement. Implementing this theory will help the
management of Persimmon Plc to encourage ethical thinking among their employees. The
employees will feel a sense of responsibility and duty towards the environment and they will
take initiative of assisting their management in overcoming the issues of environmental
sustainability. However, there are certain issue associated with this theory, the employees may
not feel sense of responsibility towards the environment, it is possible that the employees are
more inclined towards their own desires and requirement and are motivated to fulfil their own
needs.
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Exploring your issue
The issues that are faced by Persimmon Plc having a significant impact on the environmental
sustainability are as follow:
Increasing pollution: Persimmon Plc operates within the construction sector of United
Kingdom. Due to their different business project, the company is releasing a huge amount of
pollution in the air that causes health issues to the citizens of the country. As per the analysis of
the London Atmospheric Emission Inventory, construction sites are considered responsible for
emission of around 7.5% harmful nitrogen oxide, along with 8% of large particle (PM 10)
emissions and approximately 14.5% emissions of the most dangerous fine particles (PM2.5).
This issue is important and is required to be addressed by the management of the company as the
government of the country is stating that poor air quality along with diesel is being considered
the cause of around 40,000 deaths in United Kingdom each year (theguardian.com, 2018).
Figure 2: Carbon emission from industrial sector
(Source: statista.com, 2018)
Energy consumption: It was observed that earlier the construction industry used to run with the
help of fossil fuels, transporting materials, powering machinery and installing systems that
required gas and coal oils. It is known that these substances were formed naturally and will soon
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be unavailable due to increased consumption. The issue associated with fossil fuel is that they
burn and generate air pollution. Persimmon Plc uses the method of fracking in order to receive
energy. The process of fracking involves drilling down deep into the ground so that gas can be
extracted by injecting water and certain chemicals into the rock with high pressure. This process
uses a vast amount of water and releases carcinogenic chemicals into water resource. The energy
consumption issues is significant for Persimmon Plc as their activities are increasing global
warming and the toxic resources that is released into the water body is responsible for a number
of disease caused to the citizens of the country.
Figure 3: Energy use in UK
(Source: carbonbrief.org, 2018)
These are common issues associated with the construction industry and are faced by leading
organization such as Taylor Wimpey Plc. This organization was also facing similar problems and
due to increasing environmental damage, they were receiving criticism from the government as
well as their consumers. In order to overcome the issue, they adopted a number of sustainable
approaches. For example, in order to reduce air pollution the management of the company took
initiative of cutting their Co2 emission by 38.7% in the year 2013 (Taylorwimpey.co.uk, 2018).
The company is cooperating with its supplier in order to reduce their carbon emission from their
value chain.
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The management of the company is modifying their technologies and making effective use of
renewable sources of energy such as solar energy in order to reduce their energy consumptions.
Apart from enhancing their machineries and technique, the organization is also modifying the
homes that are constructed by them. They are making use of energy efficient fixtures inside the
homes constructed by them, they make use of 100% low energy lights fitting they also offer
smart thermostat options to their consumers so that the homes constructed by them is also having
a low energy consumption rate and thus, is environmental friendly.
The impact of the issues on different stakeholders of the company:
Investors: The issues has significant impact on the investor of the company as due to increasing
pollution and energy consumption they are required to invest increasing amount of money within
the business (Bourne, 2016). It is often noted that consumers avoid Persimmon Plc as they do not
have suitable sustainable practices and thus, the stakeholders lose profit revenue.
Suggestion: It is suggested that the company should incorporate eco friendly practices that will
help them in reducing their impact on the environment. The management of Persimmon Plc
should try to discuss regarding the CSR initiatives with their investor so that they are able t
acquire the necessary funds in order to implement CSR practices.
Government: The government is responsible to maintain the environmental condition of their
country. Due to the activities of Persimmon Plc, the pollution level of the country is increasing
which is a serious concern for the government.
Suggestion: It is evident that the government of UK have implemented a number of
Environmental Protection Act and the company is required to incorporate the legislation in their
operational activities so that they are able to maintain their emission levels. The government of
UK has legislations according to which all the business firm of UK are expected to adopt CSR
activities in order to be responsible towards the society and the environment.
Society: The society is one of the major stakeholders that are affected in a serious manner. Due
to the increasing pollution, the local citizens of the country suffer with a number of health issues.
The increasing energy consumption of Persimmon Plc in resulting in increasing global warming
that is causing climatic changes, which affect the society in a direct manner.
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Suggestion: The construction company such as Persimmon Plc must implement sustainable
practices such as waste energy or other renewable source of energy such as solar power so that
they do not burn diesel and their contribution towards air pollution is reduced.
13

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Advising your company
Advice for Persimmon Plc: There are a number of serious issues of Persimmon Plc in context of
maintain environmental sustainability. It is advised that the company should try to adopt
strategies and policies that will allow them to be more sustainable towards the environment. For
example, the management of the company can try to utilize renewable source of energy such as
solar, wind or hydropower. Photovoltaic cells can be used in order to convert the energy of the
sun into electric. The company can also harness the natural forces of the wind with the help of
turbines in order to convert it into kinetic energy. This initiative will help the company to be a
responsible organization. In order to ensure that they are responsible towards the environment,
the management of Persimmon Plc is required to implement a number of ethical codes in their
firm so that they are able to motivate their employees to take ethical decisions. In addition, help
in improving their sustainable practices. The organization can implement Deontology ethical
theory so that their employees can take ethically correct decision this will encourage them to
work with dedication towards helping their organization in reducing the stress from the
environment.
Significance of CSR: In addition, it is observe that adopting CSR activity is important as it
helps the company in understanding more regarding the expectations of their consumers. They
are able to build a positive image among the local community that is beneficial for the business.
Thus, it is suggested that Persimmon Plc, should try to utilise the waste energy that will help
them in contributing towards the society and allow them in reducing their energy consumptions
levels. As per the publications of (Rg-group.co.uk, 2018), around 50 tons of household waste is
thrown out every second in UK and these waste have nowhere to go other then landfills, oceans
or the incinerators. Thu, utilizing waste in order to produce energy will be a smart way to
contribute towards the betterment of the society. The management can convert the waste to
biomass or compost and turn them into renewable forms of energy. Presently it is noted that
waste energy makes up around 23% of renewable energy that are produced these figures are
expected to grow. Smart use of waste materials can assist the management in saving resources.
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Recommendation for Persimmon Plc
It is recommended that they should implement waste energy as a sustainable practice in order to
reduce their issue of energy consumption. This initiative will help them in enhancing the
environmental conditions of the country. They can take initiative of minimizing their carbon
emission. This will help in reducing the pollution levels. They should try to use latest
advancements that will help them in using renewable sources of energy and they can will be less
dependent on fossil fuels and diesels.
It is also suggested that the management should try to promote ethical thinking within their
organization by implementing ethical codes that encourages employees to take ethically correct
decisions. The managers should interact with their employees on regular basis, provide them
with training so that they are ethically more responsible, and take ethically correct decisions for
their organization.
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Conclusion
Environment sustainability is an increasing area of concern, due to globalisation and increasing
business activities of different organization the stress on the environment is increasing at a
phenomenal rate. It is important that the business organizations should try to take initiative that
will assist them in reducing their negative impact on the environment. This assignment helped in
understanding the significance of CSR activities and the way CSR initiative can assist
Persimmon Plc in enhancing environmental sustainability. The issues of increasing pollution and
energy consumption by Persimmon Plc have been discussed in a detailed manner. The initiatives
that can be taken by the house builders in order to improve the CSR initiative and ethical
practices have been discussed in this report advise has been provided that will assist Persimmon
Plc in developing policies and strategies that will allow them in responsible management and
help them in implementing environmental sustainability practices of waste energy. The
management of the company should try to motivate their employees towards ethical practices so
that they can gain the loyalties of their consumers.
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Bibliography
Bourne, L., 2016. Stakeholder relationship management: a maturity model for organisational
implementation. Routledge.
Carbon Brief. (2018). uk primary energy use | Carbon Brief. [online] Available at:
https://www.carbonbrief.org/analysis-uk-emissions-fall-again-after-record-drop-in-coal-use-in-
2015/uk-primary-energy-use [Accessed 30 Jul. 2018].
Carbon dioxide (CO2) emissions from the construction industry in the United Kingdom (UK)
from 1990 to 2016 (in 1, 0. (2018). Construction industry: CO2 emissions 1990-2016 | UK
Statistic. [online] Statista. Available at: https://www.statista.com/statistics/486106/co2-emission-
from-the-construction-industry-uk/ [Accessed 30 Jul. 2018].
Gardiner, J. (2017). How to stop the construction industry choking our cities. [online] the
Guardian. Available at: https://www.theguardian.com/sustainable-business/2017/apr/20/air-
pollution-construction-industry-cities-diesel-emissions-london [Accessed 30 Jul. 2018].
Mill, J.S., 2016. Utilitarianism. In Seven Masterpieces of Philosophy (pp. 337-383). Routledge.
Newton, M.T., 2017. A Comparison of Ethical Theories.
nibusinessinfo.co.uk. (2012). Business benefits of corporate social responsibility. [online]
Available at: https://www.nibusinessinfo.co.uk/content/business-benefits-corporate-social-
responsibility [Accessed 28 Jul. 2018].
Persimmonhomes.com. (2018). Our History . [online] Available at:
https://www.persimmonhomes.com/corporate/about-us/our-history [Accessed 28 Jul. 2018].
Rg-group.co.uk. (2018). Whitepaper: Energy, The Construction Industry And The Future – RG
Group. [online] Available at: http://rg-group.co.uk/whitepaper-energy-construction-industry-
future/ [Accessed 30 Jul. 2018].
Schwartz, M.S., 2017. Corporate social responsibility. Routledge.
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Sector, S. (2018). An Implementation Guide for Canadian Business - Corporate social
responsibility. [online] Ic.gc.ca. Available at:
https://www.ic.gc.ca/eic/site/csr-rse.nsf/eng/h_rs00599.html [Accessed 30 Jul. 2018].
Tai, F.M. and Chuang, S.H., 2014. Corporate social responsibility. Ibusiness, 6(03), p.117.
Taylorwimpey.co.uk. (2018). Sustainability | Taylor Wimpey . [online] Available at:
https://www.taylorwimpey.co.uk/about-us/what-we-do/sustainability [Accessed 30 Jul. 2018].
Taylorwimpey.co.uk. (2018). Sustainability | Taylor Wimpey . [online] Available at:
https://www.taylorwimpey.co.uk/about-us/what-we-do/sustainability [Accessed 30 Jul. 2018].
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Environmental Sustainability in the Construction Industry: A Case Study of Persimmon Plc

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