Building a Future

In our previous article "Resilient buildings - adapting to the changing climate", we considered resilient buildings and the need for the Built Environment sector to address the imminent threats posed by climate change. Developing sustainable, resilient buildings will be a cornerstone of future policy. In this edition, we consider in more depth how the construction sector is responding to the increasing demand for green building.

What is sustainable construction?

The built environment accounts for an estimated 40 per cent of global energy use, an estimated 30 per cent of energy-related greenhouse gas emissions and a large share of waste generation and use of natural resources. In the UK, for example, it is estimated that half of total waste product comes from construction. Tackling these issues is the goal of sustainable construction, the tenets of which can usefully be summarised as follows: reducing resource consumption, reusing resources, using recyclable resources, protecting nature, eliminating toxic products, applying life cycle costing and focusing on quality. In the past few years, the significance of wellbeing has meshed with sustainability such that the health and contentment of occupants is increasingly regarded as integral to green building.

UK Government Targets

Drivers of sustainable construction include, of course, the political and cultural and, with an ambitious target of net zero emissions by 2050, the Government is under some pressure to deliver. In the coming years the Government is likely to set ambitious carbon reduction objectives for the Built Environment sector, which is recognised as a major contributor of carbon emissions, both during construction and in use. It is probable that building regulations – which set the standard for energy performance in new and existing buildings in the UK – will set more stringent energy performance targets for homes to take into account achievable levels of energy efficiency. A question for the sector is therefore how can it best achieve greater efficiency? For many, the answer lies in embracing modern methods of construction.

Modern Methods of Construction (MMC)

Earlier this year, the Government endorsed a definitional framework for modern construction techniques. The emphasis is on offsite manufacturing (OSM), but it also encompasses innovation in materials and other forms of site-based improvements including Building Information Modelling (BIM), digital augmentation, robotics and drones. The Government considers MMC as critical to solving issues such as lack of affordable housing, skills shortages, low profit margins for industry players, and, of course, the Built Environment's impact on the climate.

According to the Waste & Resources Action Programme (WRAP), OSM could reduce energy used in the construction process by 67%, and waste produced onsite by 70-90%, in comparison to traditional construction methods. Also, fewer deliveries to site means less noise, pollution and disruption, as well as reduced fuel consumption. Furthermore, once built, MMC homes have the potential to be much more thermally efficient. According to the Chartered Institute of Housing, only 1% of new homes built in 2018 met the highest energy performance requirements. The Institute told a recent Housing, Communities and Local Government Committee inquiry into MMC (the Inquiry) that "this represents a huge and irresponsible waste of an opportunity to upgrade the energy efficiency of the stock". It warned that inefficient homes built now "will need expensive retrofit work within a few years if standards are suddenly raised, as the climate worsens".

The barriers to using MMC

While the benefits of MMC from a sustainability perspective seem obvious, widespread adoption is hampered by a number of factors. These include:

• negative perceptions due to high profile problems with previous housing developments;
• difficulties of varying or repairing property once it has been built;
• challenges of securing warranties, insurance and mortgages for OSM-delivered homes – because MMC techniques are new and innovative it is difficult to assess the long-term durability of buildings developed this way. This has led to difficulties obtaining financial products. Supporters have called for an "MMC Scheme" to be set up which will set standards and provide the necessary quality assurance to financial providers;
• issues relating to resilience to flood and fire. As the Association of British Insurers pointed out to the Inquiry, "MMC products often incorporate lightweight combustible materials such as wood, polystyrene and recycled materials, which have the potential to increase the risk of fire spread, leading to major damage to property and significant insurance claims costs for reinstatement"; and
• difficulties accessing upfront capital. Modular companies require money upfront (at least 30% according to home builders, Galliford Try Partnerships and Regeneration) to set up factories and assembly lines. This approach runs counter to traditional procurement routes in the construction industry.

Current state of play

A big problem for OSM is the uncertainty around consistent demand for products. Diverse design means supply chains differ from project to project whereas OSM suppliers are only able to flourish if they can benefit from economies of scale and the speed advantages of being able to recycle designs. To aggregate demand and bolster supply chains, the Government will need to take the lead, through organisations like Homes England (the government's "housing accelerator" – charged with providing the homes England needs), by incentivising their strategic partners to use OSM when delivering projects. Some steps have been taken in this regard but more will need to be done if use of OSM is to increase.

Developer and contractor, Laing O'Rourke, has been a pioneer of offsite techniques and has its own manufacturing facility. Products range from columns, beams and sleepers to smart walls and building systems and have been used on projects ranging from schools and hospitals to hotels. 

A challenge posed by building factories that might be far from the construction site, is transport of modular units from the factory to the site. For example, some builders are limiting the width of their modular homes to comply with normal road restrictions for lorries. A potential solution is to assemble manufactured components at or near the site. A solution along these lines has been adopted by contractor, Mace, who has invested in what it calls a "jump factory kit" where factory levels of production are taken to site. With the development of residential tower, East Village No. 8 in Stratford, London, Mace "jumped" the factory up a storey as each floor was completed. On infrastructure projects, Mace envisages that the challenges in terms of the sheer volumes of heavy and large equipment and components can be offset by deploying factory techniques near site, although they recognise that location, logistics and land mass will be determinative.

Support for R&D and innovation is critical to future development of OSM. For housebuilders, the research project currently being undertaken at the Gateshead Innovation Village will be very important. Homes England is partnering with Home Group Housing Association to build a village of 35 new modular homes using five different house types and six traditionally constructed homes.  The aim is to build a new community that will provide feedback on their experiences and feed into tracking of the performance of homes over time. Research like this will accrue data that can be used to prioritise and support the most effective methods of MMC.

As mentioned earlier, a lack of access to finance is a barrier to take up of MMC. The Government acknowledges this and over the years a number of schemes and funds have been created to tackle the issue. There is certainly a commitment to invest in MMC residential developments, and in suppliers, but, in order to facilitate the greater upfront outlay required, greater coherency as to the available public funding is required. In terms of private funding, if better, standardised, quality assurances can be shaped, confidence should grow.

The bigger picture

Support for sustainable construction must be generated from within the industry as well as by the Government. Momentum is growing, as evidenced recently by the declaration made by a number of architects, of a climate and biodiversity emergency. They have called for a paradigm shift in the behaviour of companies working in the construction industry (and at the time of writing the declaration has garnered 534 signatures from UK architecture practices). This does not just mean using sustainable materials but rethinking design to meet the challenges we face. For example, with increased flooding a consequence of climate change, developers need to have flood resilience in mind when designing projects: reintroducing natural and semi-natural landscapes that include planting more trees will reduce runoff rates as well as offsetting carbon emissions.

Commentators are also calling for greater transparency in how the construction sector's environmental impact is calculated. For example, Skanska, in a special report on cutting carbon, point out that the current way of reporting emissions does not show the full impact of major contractors because they primarily act as construction managers. The emissions of the supply chain, which does most of the work, are not included. As many small construction firms do not report their emissions, and those that do work in many different supply chains, an accurate report of the extent of tier one contractors' emissions is not being given. A more complete picture of omissions would enable greater control and influence and by including supply chain emissions, Skanska argue, a more collaborative approach to decarbonisation would be engendered.

At a more granular level changes are afoot. Advances in the manufacture of cement and concrete are one example. Cement manufacturers are the second largest emitters of carbon dioxide in the world. This is partly due to the sheer scale of concrete usage: after water it is the most used material on the planet. Making cement and concrete involves releasing CO2 both via the heating process, and through the chemical reaction that heating it triggers. The process has barely changed since the 1840s! Certain contractors, such as Bouygues, are pioneering new cements based on different products or using new techniques with a resultant radical reduction in CO2 emissions.

Addressing the risks posed by climate change is not just a question of ethics. The mission of the IIGCC (the Institutional Investors Group on Climate Change – the European membership body for investor collaboration on climate change) is to promote the investment opportunities created by low-carbon and climate-resilient technologies, markets and business models. In July the organisation produced a guide setting out investor expectations for climate strategies of companies operating in the construction materials sector, and guidance on good practice consistent with achieving net zero by 2050. The IIGCC warns that failure to engage opens construction materials companies to the risk of divestment and lack of access to capital as an increasing number of investors seeks to exclude highly carbon-intensive sectors from their portfolios.

Final Thoughts

The UK has adopted an economy-wide net zero emissions target date of 2050. This is ambitious and there is a huge amount of impactful work to be done. However, the incentive to act urgently and decisively is there. If the ethical reasons do not fly for stakeholders, then there are sound commercial reasons too. Of course, there is also the existential risk facing our planet.