Building the Business Case for Net-Zero Construction

If you want to develop your own road map to Net-Zero but aren’t sure where to start, let us help! We’ve created a guide for contractors and developers who want to get started.

A guide to Net-Zero construction

While this year has posed immense challenges, hidden in the background are equally big opportunities. Construction is an industry that does not stop. If you are not yet convinced that the future ahead is positive, remember that the global construction industry needs to build 13,000 buildings each day between now and 2050 to support an expected population of 7 billion people living in cities. This urban boom will need supporting infrastructure, such as roads, highways, railways, airports, power grids and water/sewage systems. An estimated $94 trillion in infrastructure investment is needed in the next 20 years alone to support this urban expansion. The pandemic may be a speed bump in this process, but in the long term, construction will continue to grow rapidly.

It is important to keep in mind, however, that the decade ahead of us will be a decade of change. Climate change will play a key role in future business decisions and government legislation. Environmental concerns have received increased attention in the national “Build Back Better” campaign and ESG funds are gaining larger shares in investment pools. But 43% of construction firms still prioritise immediate financial goals over organizational resilience and this short-termism is costing our environment every day. However, instead of fighting to change an industry that’s known to be risk-averse and profit driven, we need to ensure that Net-Zero targets are embedded in commercial strategies.

With a new year around the corner, it is ample time to review and implement a Net-Zero strategy for your organisation with commercial incentives. Even the most noble intents do not endure long-term if there isn’t an alignment with overall company objectives and commercial incentives. We need Net-Zero to be successful, so let us help you build the business case for it.

Want to learn how the UK’s top contractors are incorporating net-zero into their business?

Firstly, reducing the amount of materials used on site and waste production will have the most immediate cost reduction while reducing carbon emissions. Before looking at procuring fancy, high tech, low-carbon material, focus your efforts on current inefficiencies — the average construction site has so much untapped potential to increase efficiencies. Ensure your deliveries are as lean as possible, having the right materials delivered at the right time. Moreover, seek to align your goals with the supply chain so that erroneous deliveries are minimized as much as possible.

Unfortunately, the link between financial and environmental impact is not always clear, so sometimes, artificially creating financial incentives may be useful. British Land has created a carbon pricing model to incentivise the adoption of low carbon materials and methods of development, which will in turn support the net-zero transition of the wider portfolio. In practice, every tonne of embodied carbon triggers a payment of £60. Besides encouraging a lower footprint in the projects, this pools capital that will help fund the transition towards a Net-Zero organisation.

When designing a Net-Zero strategy, you will eventually identify areas that require captial investment. The next stage is figuring out how to allocate budget towards these investments. This is a crucial step to not be overlooked as the lack of a process for funding is currently an obstacle to progress in many companies. The British Land Transition Fund is a great example of not only creating a business case and financial incentives for low-carbon builds, but of a strategy that included finding and funding solutions. Currently, 59.9% of construction firms do not have a dedicated R&D budget, but a successful strategy should budget for the innovations and initiatives that help reach Net-Zero target and have a clearly identified responsible person or team for this key matter. To communicate this with upper management, Project Directors, and C-suite teams it’s important to have the long-term commercial benefits clear to support the re-allocation of company budget.

Overall, beyond making the business case, making your Net-Zero strategy successful will require strong management foundations, cooperation across teams and departments, and strong leadership. We recently developed a “Road Map to Net Zero” guide that outlines the benefits of having a clear road map along with a practical guide for defining and developing a road map for your organisation. Additionally, you will find examples of how some of the UK’s biggest contractors and developers have defined their road map to achieve Net-Zero. Download the Net-Zero guide in the link below:

A guide to developing your Net-Zero road map

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Callum Carlstrom

Callum Carlstrom

Callum is the Marketing Manager at Qualis Flow. With 3 years of entrepreneurial and marketing experience, Callum focuses on impact driven content creation for digital platforms.

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