5 Ways To Improve Circularity In The Construction Sector

Bain & Company’s Karim Shariff Talks About Renovation 

It is a global challenge and is particularly critical in regions experiencing rapid population growth and urban migration, which together generate significant demand for new construction.

While emissions-reduction efforts will understandably focus on low-carbon technologies such as green steel and CO2-injected concrete to deliver against net-zero goals, the industry will also need to reduce the need for virgin, raw materials.

According to the report, one way to reduce that demand is to ensure the best use of end-of-life materials—that is, material that can be reused or recycled when buildings are renovated or deconstructed. Because these materials are scarce, the sector is also developing innovative new materials and working to secure access to recycled materials from other sectors.

The shift to greater circularity will have a disruptive effect on the industry, especially on the makers of construction materials. Most of these companies are setting goals and putting pilot programs in place to explore ways to make the sector more circular.

The pressure on incumbents comes not only from regulators and customers, but also from new entrants who are also finding footholds in alternative materials and new services and business modelsReport further mentioned, Incumbent leaders should watch these disrupters carefully while companies implement the following five tactical strategies to improve their circularity, it includes,

Renovation and longer utilization: Improving existing residential and commercial buildings to extend their lives and make them more sustainable could provide a significant boost to the circularity of the sector.

Light weighting: Innovations in design and materials could decrease building weight by 20% and embodied carbon by up to 15% by 2040. Thoughtful design can also reduce weight by optimizing the type and amount of material used.

Renewable inputs: The market for building materials made from renewable inputs is small but growing quickly.

Circular inputs from the construction industry and beyond: Increasing the amount of recycled content, with improved collection and recycling consistency, could help to almost double the share of recycled materials (to 28%) by 2040.

Recovery services and technology: Better management of waste during construction and demolition, including more advanced material separation techniques, can help increase the number of materials to be reused or recycled.

Commenting on Navigating the transition to a more circular sector report said, players in the construction industry, specifically building materials companies, should take a proactive approach to make the most of the shift to a low-carbon economy.

Our experience working with companies in this sector suggests that the companies out in front are guided by three principles that help them navigate the transition.

These three principles include:

Anticipate the disruption of the circular material: the shift to circular materials, driven by policies, regulations, and consumer demand, will disrupt the construction sector. By now, most building materials companies are positioning themselves to make the most of opportunities by investing in new materials, technologies, or services.

Use circularity as a commercial selling point: because greener and more circular materials can help customers reduce their own emissions, they offer savings that most customers should be willing to pay a premium for. But materials companies have not always priced their products appropriately to capture those premiums. By focusing on customer segments that place a high value on circularity benefits and by quantifying the value delivered to customers, materials makers can determine the right price and margins.

Secure cost-competitive access to circular materials: because buildings have such long lives, the volume of inputs needed for new construction far outweighs the volume of materials that can be salvaged from buildings at the end of their useful lives. Builders and makers of construction materials will want to secure access to end-of-life materials as early as possible to minimise exposure to inflation and scarcity.

Historically, the construction industry has been slow to adopt new technologies and processes that deliver productivity gains. But that is changing quickly: Construction and building technology are among the hottest draws for venture capital, and the industry is rapidly adopting digitisation.

Report concluded, the industry is also pushing forward new technologies and product innovations to boost sustainability in a broader context, thereby reducing the environmental footprint of buildings in general.

After many years, the construction industry is finally showing that it can become more tech-savvy and greener.