From an early age, we are trained to think of construction in terms of hard hats and big yellow machines, thanks to Tonka toys. As the construction sector builds up towards a more environmentally sustainable future, digital technology is set to be the foundation for new and greener methods. Digitally led sustainability was the key theme of the recent UK Construction CIO Forum, which I had the benefit of taking part in.
According to the Royal Academy of Engineering, the construction sector contributes up to 11% of global carbon emissions. Carbon emissions from buildings are growing and expected to double by 2050, states the Global Alliance for Buildings and Construction, yet the UN Paris climate agreement demands that global emissions need to be at zero between 2050 and 2070. The Netherlands and California already have regulations in place for whole-of-life carbon assessments and the carbon intensity of construction materials. Architect Michael Pawlyn told CIOs at the forum:
We are in serious trouble if we carry on as we are. Technology alone will not be enough. We need much bolder transformations.
These statistics could suggest that the industry is sitting on its hands, but technology leaders in the sector are at the forefront of preparing their organizations to be more sustainable. Phil Brown, CEO of construction sector tech firm Causeway, says:
On the basis that the construction sector contributes 40% of carbon emissions, it really is the place to start the change. But that change has to happen in a sector where margins are wafer-thin. So there is a dichotomy, and that is the reality of the sector.
Despite the well-documented low margins of the construction sector, the adoption of digital and sustainable business methods will deliver business benefits, according to Joanna Gilroy, Group Sustainability Director at Balfour Beatty:
One of the key messages that we are talking about at Balfour Beatty is that sustainability is not an environmentalist movement, it is a business one. Every organization, regardless of size, sector, or customer type, has three capital buckets in order to exist: these are your natural capital, society capital and your profit. If you don't have all three of these, you simply will not be in business long as you will be disrupted.
Jack Waring, sustainability manager at Balfour Beatty, adds of the role IT plays:
To operate more efficiently, processes will need to be digitized, and that is where you will claw back some of that margin. There is a hump to overcome initially as you invest in the technology.
Changes in construction techniques lend themselves to digitization and greater sustainability. Increasingly, construction firms pre-fabricate major parts of a building off-site, bringing the sector much closer to being a manufacturer. Arnoud Volker, Digital Transformation Lead at Holcim, the concrete and building materials giant, says:
We are a manufacturing firm, and we need to become digital leaders and there are three steps to this: we need to manage technology in a digital way that is agile; data has to be the core of the business, and we want to partner with the best start-ups.
He says these three will enable the sector to be safer and more efficient. To attract start-ups and the digital talent the sector needs, architect Pawlyn says the construction industry must be good environmental citizens:
All companies have to think what their deep purpose is, as now there is an expectation to have a clear and deep purpose that aligns with sustainability.
Digital methods are already creating business impact in construction. Holcim and its businesses operate Concrete Direct, an app that allows constructors to order, track and change deliveries. In the UK, Aggregate Industries, part of Holcim, is a major supplier to the HS2 high-speed rail line being built to increase rail capacity. Previously, order summaries were sent to clients such as HS2 as a PDF, which the client had to manually extract to add to their spreadsheets or analytics tools. By sending the data as a spreadsheet, Aggregate Industries is saving its clients 30 minutes a day.
Concrete Direct is also being used to manage the firm's vehicle fleet to ensure cement mixers are not held in queues at the construction site. This increases productivity and has the environmental benefit of preventing vehicles from wasting fuel sitting in line and the risk of the cement going off and not being used by the constructor. Volker says of these iterations:
120 deliveries a day for certain construction sites, that means we could have a lot of trucks waiting in a line. So it is technology that provides visibility and allows live adjustment. For me, digital is all about business impact.
In construction, those impacts are felt not only by the construction company but also by those living and working close to the building site. Process improvements that reduce queues mean fewer complaints about poor air quality. Volker says:
It's about the right mind-set and making sure that enough people are willing to think in a slightly different way.
To ensure access to that alternative thinking, Holcim attends major hackathon events such as Hack Zurich and runs Maqer, an accelerator business for start-ups.
Data is, of course, a vital raw material for the digitization and sustainability agendas of the construction sector. Firms like Aggregate Industries and Balfour Beatty are data-rich from long heritages in the sector. To date, the sector has not used that data to benefit their business, but that is changing, as Gilroy at Balfour Beatty explains:
In our highways business, we have been collecting telematics data for ages, but it is not just about the data; it is about how you translate it into a language for the end user, which one of my team did to create actions, and the digitization of a process that led to £3.89 million in savings across two projects through utilizing existing data sets to improve plant optimization.
Volker adds that adding QR codes to cement mixers allows every member of a building site to access load data via their mobile devices. Given the high number of stakeholders and contractors on every construction site, this simple move gives equal access to information. Again, the more informed workers are, the more likely they are to ensure there is no wastage, and sustainability improves.
Digitization is leading to a new range of tools being added to the construction sector toolbox.Tools that will enable the sector to be more environmentally sustainable and collaborative. Titans of the UK construction sector Kier Group, Morgan Sindall, Aggregate Industries, Balfour Beatty and Galliford Try are all working with Causeway on a real-time Scope 3 emissions reporting tool. A carbon emissions version of the Causeway Tradex platform uses invoice data to build a picture and reporting mechanism for Scope 3 emissions.
Scope 3 is indirect emissions from the supply chain; at present, the construction sector is over-reliant on generic emissions monitoring, but initial tests of the new tool sampled 25,000 invoices from these partner organizations and pin-pointed the embedded carbon in items used for construction. This will give constructors accurate data to pass to their clients, who, in turn, will be able to ensure their ESG reports are accurate.
A growing number of CIOs see technology as the ideal starting point for making the business more environmentally sustainable. The CIOs of the construction sector demonstrate that, quite literally, if you build it, they will come. Construction is a complex sector with multiple stakeholders involved at every point of the process. Therefore, data and technology are essential to increasing the sustainability of the sector.