Construction: The Unlikely Hero in the Pursuit of Net Zero

Our challenge: build like our planet’s future depends on it
(Spoiler… it does)

Anyone interested in sustainability and construction is no doubt familiar with statistics such as these: Construction contributes to 25% of global GHG emissions, consumes over 30% of the world's resources, and generates 37% of global CO2 emissions from fuel combustion. 

Meanwhile, C40 Cities predicts that the number of people in urban areas will grow to 2.5 billion by 2050. It’s difficult to comprehend a number that large. 

So let’s convert it to something easier to process - how much we’ll need to build to keep up. The staggering reality? We need to construct the equivalent of a new NYC, every month, until 2050.  

The New York City skyline

If built using today’s methods, our global temperature is on track to rise by 3°C or more. In contrast, the Paris Climate Agreement strives to keep human-induced climate change to well below 2°C, and ultimately aims to restrict the rise to 1.5°C. 

While a single or half-digit difference may seem minimal, the change in outcomes is drastic. For example, compared to a rise of 1.5°C, a 2°C increase sees an additional 10 centimeters of sea level rise, the near-disappearance of many coral reefs and an additional 420 million people exposed to frequent heatwaves. As temperatures rise, construction will face more days that are too dangerous for outdoor work. 

So how do we evolve? And what does it really mean to do something other than “business as usual”? 

We talked with four leaders who are paving the way to a more sustainable tomorrow. The good news? A Net Zero future is likely closer than you realize. 

The Panelists

Takeaway #1: The bigger the problem, the greater the opportunity

It's easy to look at the construction industry and see a daunting problem.

But Sammy Lakshmanan, Principal ESG, PwC, encourages a different perspective, believing that our industry’s size is indicative of its ability to bring about massive progress. 

So while working to increase the sustainability of an industry known for its negative environmental impact may not feel particularly glamorous, it is almost unmatched in its potential to create real change. 

Consider this riddle from Harvard Business Review:

Imagine you’re responsible for your company’s car fleet. You manage two models, an SUV that gets 10 miles to the gallon and a sedan that gets 20. The fleet has equal numbers of each, and all the cars travel 10,000 miles a year. 

You have enough capital to replace one model with more-fuel-efficient vehicles to lower operational costs and help meet sustainability goals. 

Which upgrade is better? 

A. Replacing the 10 MPG vehicles with 20 MPG vehicles 

B. Replacing the 20 MPG vehicles with 50 MPG vehicles

Intuitively, option B seems more impressive—an increase of 30 MPG is a lot larger than a 10 MPG one. And the percentage increase is greater, too. But B is not the better deal. In fact, it’s not even close.

Option A actually saves 200 more gallons than option B.
Counterintuitive, maybe. But true! 

Read the HBR article to dive into the math behind why. 

Takeaway: Yes, one could argue that construction is one of the biggest problems. But improving our weak points will have some of the largest returns. It’s important work.

“Even though you think of construction as this industry that pollutes and uses tons of fuel and produces tons of greenhouse gasses, actually it is poised to make one of the biggest effects on our future in climate.

And that influence you can have, has so much to do with efficiency - to plan your routes better driving, excavating.

To analyze machines and understand how you can make them more fuel efficient.

To dive into our long-running processes and find things with data that don’t need to be done. The excess, and there’s a lot of it in construction.”

- Ross Stump, ML Software Engineer, Trimble

Takeaway #2: Sustainability is an investment (and opportunity), not a cost

A close collaboration between Ramboll, BIG Architects and the turnkey contractor, Bladt, rendered the Kistefos Museum in Norway (called "The Twist), possible. Ramboll's engineers, architects, and architectural technologies were able to optimize the weight of the construction -- saving 35% of the quantity of steel. 

In the past, many companies have resisted sustainability due to fear of change. 

Poul Hededal - Group Director, Knowledge & Innovation at Ramboll believes that moving forward, sustainability is a license to play. But that’s just the beginning. The real magic is in running towards sustainability with enthusiasm. Not only is it the right thing to do, it offers significant competitive advantages. 

Here are some of the major benefits the panelists highlighted: 

The ability to meaningfully support clients
As sustainability grows in importance, more and more of our partners and clients will need support in reaching their own goals. For Ramboll, Poul pointed to opportunities in helping clients with the necessary documentation to setup and report on their project's sustainability goals.

Recruiting and retaining a passionate team
Corporate commitment to sustainability can help attract passionate, aligned team members. According to Poul, for many Ramboll employees it’s a requirement for them to even consider working at the company.

Increased access to funding
Markets are demonstrating that they're more willing to invest in a product or company that is sustainable. 

“Infrastructure funds, private equity funds, angel investors, banks, etc are willing to loan money to do this because, keep in mind, they've made Net Zero commitments as well.

There's a whole bunch of them out there that said, ‘Oh we're going to go to Net Zero.’ The only way they can do that is to finance and provide capital to organizations, companies, projects, and initiatives that will help them achieve that low-carbon transition.”

- Poul Hededal - Group Director, Knowledge & Innovation, Ramboll

Takeaway #3: Pursuing sustainability correlates with innovation and increased productivity

Our industry has long sought to use less fuel and building materials. Companies understand that there’s alignment between consuming less and improving the bottom line. 

But what else correlates with pursuing greener building methods, materials, and tools?
Better ideas. Innovation. Increased productivity.

Dr. Ray Gallant, VP Product Management, Productivity, Volvo North America is well aware of the downstream benefits that come from pursuing sustainability. At Volvo, they are advancing battery technology for heavy equipment. Of course, there are the expected benefits such as reduced fuel consumption and emissions. But it’s much more. Changing a machine from diesel to electric changes the experience of using the machine; they are much quieter and can run indoors. 

These auxiliary benefits are opening up product applications that weren’t possible before. According to Gallant, “Customers are seeing opportunities that they could never do with a [diesel powered] machine. So we have applications coming out that we would have never thought to design for, that now are possible with electric machines.”

Many companies are also pursuing sustainability through increased technology adoption and connection.  According to Dietmar Grimm, VP Corp Strategy & Sustainability Solutions at Trimble, tech such as auto-steering compactors and progressive scanning are generating 20-30% carbon reductions, while also cutting costs and increasing productivity.

Takeaway #4: Standardizing data/reporting and setting benchmarks is key to future success

There is an ongoing effort to develop standardized ways of reporting sustainability metrics with accuracy and transparency, just as accounting has standardized ways of showing profit and loss.  After all, without a science and data-based baseline, how can we prove that we’ve made true progress in the future? 

This crucial move away from the wild west of reporting allows companies doing impressive work to shine and makes greenwashing harder. 

While we’re still early in this journey, Sammy emphasizes that estimates and assumptions are okay, with a caveat. 

“It doesn’t have to be perfect.

We don’t have perfect numbers even in the accounting world right now. We make estimates. We make assumptions.

The key thing is to document those estimates and those assumptions so that people understand how you got to the number and understand what it is.”

- Sammy Lakshmanan, Principal ESG, PwC

Poul is a dedicated advocate for setting baselines. He explains, “to set targets, you need a baseline.” 

To this end, Ramboll has determined the average carbon footprint of their designs, establishing a baseline. From there, Ramboll can measure success as they pursue reducing the carbon footprint of their designs by 25% per square foot. As Ramboll designs more than 10 million square meters a year, this will have a huge impact. 

Takeaway #5: The more we collaborate and share information, the faster we can revolutionize the industry

Dietmar Grimm has been working on sustainability-related issues for 20 years and believes that we’ve hit an inflection point. People are moving past their initial resistance to change, seeing the opportunities, and committing to sustainability in meaningful ways. 

If we also commit to working collaboratively, we have the power to solve challenges as an ecosystem, instead of less effective one-off solutions. Poul sees this as imperative.

“If data is isolated then individuals and teams will also be isolated, which means that collaboration would be impacted, which means that we'll not achieve the optimal solutions that we set out to do. So we'll actually not be able to deliver sustainable solutions.” 

- Poul Hededal - Group Director, Knowledge & Innovation, Ramboll

One positive indicator of increased commitment and collaboration is the growing momentum behind the Science Based Targets initiative (SBTi), which enables companies to clearly define a course of action to meet the climate goals outlined by the Paris Agreement. In the past few years, the number of commitments has grown exponentially. Trimble and Ramboll are both leading the way with approved SBTi targets. 

Source: https://sciencebasedtargets.org/resources/files/SBTiProgressReport2021.pdf

Continuing the journey

As we continue our work of building more than ever, while being more efficient than ever, the panel agreed on one key point: Don’t forget to pause and celebrate your wins.

We’re doing challenging, world-changing, essential work. We’re paving the way to a greener, resilient future. 

It’s certainly not easy. But together, we have the power to lead the world to a net zero tomorrow. 

"Our industry is the answer to the challenges of the world. And we've delivered the answers historically."

- Poul Hededal - Group Director, Knowledge & Innovation, Ramboll

Enjoyed these insights? The Dimensions conference may be for you!

These takeaways come from the “Toward a Net-Zero Future: You May Be Closer Than You Think” panel at Dimensions 2022.

Watch the full recording here:

Learn more about the Dimensions conference here.