WHITEPAPER

Sustainable Development and Transformation in Construction

With sustainability taking a back seat to the global focus due to the COVID-19 pandemic, we must now renew our focus on making buildings more sustainable to curb the effects of global warming. In a webinar hosted by The Big 5, a panel of industry experts deliberated on topics such as green buildings, digital transformation, the funding of sustainable projects, and what we have to do to make construction greener.

  • Caspar Herzberg, President – Middle East & Africa, Schneider Electric (Moderator)
  • Mohammad Asfour, Head - MENA & African Networks, World Green Building Council
  • Mohamed Mousa, Partner, IBM Services - Middle East & Africa
  • Ursula Hartenberger, Global Head of Sustainability, RICS

Key takeaways

  • The post-COVID-19 era will allow us to re-focus on the challenges and opportunities in sustainability in construction
  • New digital technologies are redefining the possibilities in efficiency and production in construction operations and manufacturing
  • There is a pressing need to align financial flows with a pathway towards low carbon and climate-resilient development 

 

Setting goals to achieve green buildings globally by 2050

People talk about the reduction in emissions caused by COVID-19. However, the harsh reality is that we are still in a global climate crisis, and we need global systematic solutions to reverse the damage being caused by climate change. The Intergovernmental Panel on Climate Change (IPCC) tells us that we have until 2050 to decarbonise our way of life to limit global warming to less than 1.5 degrees, beyond which the repercussions on our planet will be disastrous.

By 2050, the world’s building stock will double, increasing the impact of our sector significantly. Its demand on natural resources is a major contributing factor to global warming, and inefficient, unhealthy buildings are affecting our lives. The growth of construction places increasing demand on our energy grid, our infrastructure and our resources.

Buildings are responsible for 39% of global carbon emissions, yet energy demand will increase by 50% by 2050. Buildings are also responsible for 50% of global material use, and 42.4 billion tonnes of materials are consumed annually. By 2050, the global population will increase by 27% to 9.8 billion, and the global floor area will increase by 100%. Also, while 104 or 194 countries that signed the Paris Agreement have committed to improving building energy efficiency to meet mitigation targets. However, only 62 countries currently have building energy codes.

Green buildings provide some of the most effective means of achieving a range of global Sustainable Development Goals (SDGs), such as addressing climate change, creating sustainable and thriving communities, and driving economic growth.

The World Green Building Council’s (WGBC) global goal is calling for all new buildings to operate at net zero carbon by 2050. WGBC has identified four action pathways to achieving these goals, including certification, corporate engagement, training and education, and government engagement. To ensure alignment, WGBC has created an umbrella definition of net-zero carbon buildings that can be adapted in different markets, as well as four key principles to ensure alignment. These are to measure and disclose carbon, reduce energy demand, generate balance from renewables and improve verification and rigour.

With these measures in mind, it is essential to realise that what we build today will be with us in 2050. And as we work to reduce operational emissions, embodied emissions become proportionally more significant. Today we stand at a critical time to minimise the impact of embodied emissions.

The WGBC calls for all new buildings, infrastructure and renovations to have at least 40% less embodied carbon emissions with significant upfront carbon reduction. The ultimate goal is for all new buildings to be net-zero operational carbon by 2050.

Creating increased efficiency and productivity through digital and technological transformation

The construction and real estate industry has benefitted from the emergence of new digital technologies that are altogether redefining the possibilities in construction operations and manufacturing. These include innovative technologies such as APIs and microservices that rapidly create new applications and enable ecosystem partners to collectively innovate, for example. Or blockchain, which improves identity management and distribution and allows transformational business model innovations, as well as AI and analytics that supports staff in making decisions and identifies business-critical operational improvements.

The ultimate aim for the industry should be to bring together the power of technology with the industry’s goals and targets in order to start applying the most appropriate innovation to increase efficiency and productivity in construction.

In order to do this, we require a step-change in the way we design, construct and operate. It is important to understand that although the initial investment and making savings in the right places is key to creating a better citizen journey, it is even more important to get into a better state of capital expenditure (capex), to operationalise the steady-state environment, to reduce the cost of failure, and to disrupt the existing business models.

Building Information Models (BIM) and digital twins will enable you to bring everything together so that you can replicate this pre-execution, and you can align your plans with the physical structure that you intend to build. You can start making better decisions on the specific assets, pre-build, and then tap into these capabilities as you operationalise it through the Internet of Things (IoT), for example.

A holistic approach is key to successfully increasing productivity and efficiency by regenerating some of the capex investment, utilising the existing environment, and being able to loop and extend these assets for further use.

Driving more finance towards sustainable construction projects

Why does sustainable funding matter in real estate and construction? This partly stems back to the targets set by the Paris Agreement to reduce CO2 reduction; however, another element includes the commitment to align financial flows with a pathway towards low carbon and climate-resilient development. The financial sector plays a vital role in the achievement of these financing targets.

In terms of the built environment, green financing is not only very timely but also extremely necessary. In comparison to other sectors, the building sector continues to receive the most significant proportion of energy-efficiency investments; however, the sums have started levelling off. While the total investment in building and construction is rapidly growing across the world, there is an emerging gap between total investment in construction and renovation and energy efficiency investments.

Currently, we are far from meeting the investment targets that the Paris Agreement foresaw. However, the positive news is that the real estate market continues to embrace and invest in green buildings and green building rating systems. Despite these efforts, there is still more work to be done.

So, if we want to drive more investments towards green buildings, what makes a construction project eligible for “green” finance? The problem is that there is no widely accepted definition of what makes a building green. And if the investor community does not feel confident in a project, they are not going to invest.

Summary

The post-COVID-19 era will be the opportune time to renew our focus on the challenges and opportunities that we are facing in sustainability in construction. With buildings accounting for 39% of the world’s energy consumption, and that figure continuing to rise, there is a pressing need to make buildings more sustainable. On a global level, there are renewed calls for drastic action from governments, industry and communities to reduce carbon emissions and create a more sustainable built environment for all.

About The Big 5 Impact Awards

Inspired by the United Nations’ Sustainable Development Goals, The Big 5 Impact Awards is a platform to celebrate the achievements and transformation of the construction industry that go beyond traditional measures of project delivery. They have been created to inspire Middle East, Africa and South Asia’s construction industry to aim for higher standards and achieve new goals. Submissions are open to Project Owners, Developers, Consultants, Architecture and Engineering Firms. The awards categories explore businesses creating the smart communities of the future, how we use technology and digitalisation to enable more sustainable construction practices, as well as honouring team collaboration, partnerships, and individual leadership. For more info, visit www.thebig5impactawards.com.