Green Investment to change global construction

Green Investment to change global construction

 Shift in Thinking Needed

Kisa Zehra, economist at RICS writes that “A pronounced shift in thinking, investment and production are required to meet net-zero targets”

9 Disruptors

Earlier this year, research by McKinsey & Company highlighted 9 shifts that are likely to impact the global construction sector over the next 5 years. These disruptive trends, which include specialisation, increased value chain control and investment in human resources, are expected to radically change the way construction projects are delivered.

 

Sustainability ‘Crucial’

What is most interesting is that sustainability stands at the top of the list; out of the 400 industry leaders surveyed by McKinsey, 90% believe sustainability in construction will be crucial going forward, and almost 80% expect this will happen in the next five years.

 

Sector “NOT on track”

This shouldn’t come as a surprise. Buildings and construction are responsible for nearly 40% of all carbon emissions in the world. Energy used to heat, cool and light buildings account for roughly two-thirds of these emissions while the remaining one-third come from manufacturing materials and components. As several countries are now committed to net zero targets by 2050, these emissions will have to fall sharply in the next 30 years or so. The last report by the International Energy Agency declared that the sector was not on track, stating that building-related emissions rose to all-time highs in 2019.

 

Massive Producer Efforts

Notwithstanding the sizeable impact that COVID-19 is having on the global construction industry, there are some signs of progress this year. For the first time, 40 of the world’s leading cement and concrete companies have announced a collective ambition to decrease the industry’s CO2 footprint by eliminating direct energy-related emissions, developing carbon capture techniques, and promoting the reuse and recycling of concrete.
“40 of the world’s leading cement and concrete companies have announced a collective ambition to decrease the industry’s CO2 footprint by eliminating direct energy-related emissions”

 

Hydrogen Powered Aluminium

Meanwhile, the use of low-carbon aluminium seems to be on the rise. On 31 August, the world’s first hydrogen-powered steel plant began operations in Sweden, which is seen as a ground-breaking effort to reduce emissions by replacing coal with hydrogen in the steelmaking process.

 

Commercial ‘Zero CO2’ Target

Other positive developments in recent months include the announcement of MACE’s new Smart Building project in Central London, and Landsec’s plans to develop the first commercial building rated net-zero carbon in the UK.

 

European Green Deal

The subject also remains high on the agenda for policymakers. Reducing energy consumption of buildings is one of the flagship policies of the European Green Deal. This includes a requirement for all EU countries to establish detailed, long-term strategies that will support the development of highly energy-efficient and zero-carbon building stock by 2050. As part of this, the European Commission plans to rigorously assess its members’ policies this year. Furthermore, in July the UK government committed £3bn to retrofit both private and public buildings. Improvements in energy efficiency standards is also a part of the 2020 planning reform. It is likely that more targeted policies will be announced going forward and building regulations will get tougher.

 

Private sector investment

At the same time, private investment has been a particularly strong lever. Estimates by the Climate Bonds Initiative suggest that out of the $258bn worth of green bonds issued globally in 2019, 30% went to the building sector, making it one of the largest industries for green proceeds allocation. Data covering the first half of 2020 shows a similar result.

 

Rent Premiums for Sustainable Buildings

Chances are that investment in environmentally sustainable buildings will deliver good financial returns. Analysis by JLL suggests that between 2016 and 2019, office buildings in Central London with energy performance certificates of A or B saw a rental premium of 10% compared to offices with lower ratings, while those with the BREEAM sustainable building standard were also subject to higher rents in the same period.

 

Poor Professional Priority

Back in Q1 2019, contributors to the RICS global surveys reported that while investor focus has shifted towards energy-efficient and carbon-neutral building designs, there is a long way to go before sustainability is at the forefront of mainstream investment decisions across the built environment sector. It is of some concern that around 40% of professionals working in the commercial real estate sector across the globe ranked climate risk factors as either not important or irrelevant for investors when making decisions. In the UK, almost 50% of respondents took this view.

 

 Global Construction Monitor

Still, there have been some important advances. As part of our Q3 2020 Global Construction Monitor, the RICS Economics team will assess how sustainable and green initiatives are being used to complete projects, the use of circular practices in construction, as well as the significance of measuring embodied and operational carbon in projects and the impact this is currently having on the choice of materials and components. The results should offer more insights.

 

Better all-round Savings

We are all about ‘Sustainability’. Our specialist services and CUSTOM homes division deliver lowest energy, best value building and  protect the interests of land owners, house-builder developers, professionals and private individuals seeking to build their dream home. Our off-site construction systems also reduce the amount of material that gets wasted on site, helping to avoid land fill, hazardous waste separation and handling, They also deliver better value for you and your customers.

 

Saving Waste – from Concept to Clearance

Modular Off-site MMC SIP & Timber Frame structures provide excellent ways to save waste and deliver top energy rated homes.  Working  with architects, planners and environmentalists to satisfy all types of design, we are already well on the way to incorporating waste reduction measures into our procedures and processes. This means our ‘Volumetric’ and ‘Flat pack’ modular building solutions envisaging ultimate demolition and clearance can ‘tread lightly on the earth’ as we adapt  business innovations and developments to environmental needs.

 

Learn & Earn with DfMA

Applying DfMA (Design for Manufacture & Assembly) to lightweight structures defines the process of taking these to the next level. For example, standard designs from our very low rise ‘SolidLox’ brand enable us to provide buildings that do not require massive foundations and which can avoid harming tree roots while delivering on time and within budget.

 

Systematic Solutions

Such projects require a systematic, solution driven approach which brings discipline to the process, sharing  information and communications.; a welcome change in the overall approach to project management and development – and to those who just ‘talk about it’!

 

Partnering for Modular Progress

All of this entails a shift in thinking to that already practiced by established ‘Off-Site’ MMC manufacturers. It can be quickly and easily incorporated into procedures and processes of building and development. Better still, you can make partnering arrangements with such manufacturers to gain all round benefits.

 

Greater Speed, Accuracy, Quality and Lower Costs

Greater collaborative ‘partnering’ between architects, builders and  manufacturers will deliver these. The greater speed, accuracy and quality that can result from manufacturing components in a dry, controlled factory environment, together with the ability tom incorporate (yet to be invented) ‘Smart Ware’  gives home builders perhaps the only way of achieving this, together with improved on-site build quality AND controlling costs.

 

Easy Timber Frame

To assist them in doing so our “Easy Timber Frame” now offers standard size modular timber frame elements for them to use as a design base, cutting down on technical design and engineering to produce win-win results.

 

PLEASE CONTACT US FOR AN INFORMAL DISCUSSION AS TO HOW WE MIGHT WORK TOGETHER
Call us to arrange a factory visit and discuss your ideas and needs with our in-house team of professionals for your next project. You’ll be glad you did!
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For really attractive, flexible, affordable and HEALTHY Low Energy Homes, call, send us your drawings, or visit our manufacturing plant now.
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