Why Developers Should Welcome A Resource Revolution

The emerging concepts of circular economy and resource-efficient design offer opportunities for developers. By embracing these approaches, they can reduce costs, de-risk material price volatility, improve residual values and appeal to a new generation of firms and employees for whom sustainability is a key priority.

The risks of a material-hungry industry
The construction industry uses huge volumes of materials – including half of the world’s steel production. Urbanisation is driving growth in this enormous appetite for materials.

In the three years from 2011 to 2013, China used more cement than the United States did in the entire 20th century and global demand for steel is predicted to double by 2050.

These trends are not without consequences. Since 2008, price volatility across key construction materials, particularly steel, has become the norm. Work by Accenture in 2013 identified two major causes of volatility in the global steel market that will remain influential for the foreseeable future: the strengthening influence of emerging markets and the re-structuring of global steel markets towards shorter term contracts.

Taken together, growth in demand and high price volatility represent significant cost risk to the built environment. Material productivity in the industry meanwhile has not significantly changed in the past 20 years. Accustomed to plentiful and secure supplies of cheap materials, the industry is profligate in its material use.

Reducing costs and boosting appeal
A new perspective on how we use materials points the way forward. The UK Government’s Infrastructure Carbon Review found a clear correlation between reducing cost and reducing material use on projects. By focusing on reducing material use and embodied carbon, projects found innovative ways to use assets more intensely, reducing cost and carbon at the same time.

In addition, the industry’s current high material use and the forecasted growth in material demand are simply incompatible with carbon emission reduction targets. By adopting innovative material strategies that reduce embodied carbon, developments can appeal more strongly to start-ups and businesses employing sustainability-conscious millennials.

Putting ideas into action
Two ideas offer developers new approaches to material use. First, resource-efficient design challenges design teams to do more with less. Arup Associates chose structural timber for Sky’s Believe in Better Building. Why? Because it gave the lowest embodied carbon, but also because it helped the development go from inception to completion in less than 12 months.

Second, the circular economy – which aims to decouple economic growth from resource consumption – gives a suite of options for making better use of existing assets. As part of the 2016 London Design Festival, Arup’s prototype Circular Building explored how the circular economy would impact building design. Was it possible to design a building where, at the end of its life, all its components and materials are re-used, re-manufactured or re-cycled? This aim profoundly altered design and construction priorities, suggesting new solutions for maximising asset and residual values. These principles are already being used on projects; Dutch developer Delta Development has committed €300M to Park 20|20, a new office park in which circular economy principles are embedded from the start.

Resource-efficient design and circular economy principles can reduce capital costs, reducing exposure to price volatility. And they can act as a differentiator in a rapidly changing marketplace. As a developer, what’s not to like?