Sustainability in Construction: Profit, Value, and Behavioral Change

Blogs 3 sep 2024

As a Sustainability Consultant at Aveco de Bondt, I have helped companies articulate their sustainability ambitions and translate those ambitions into concrete actions. This requires not only affordable technical solutions but, more importantly, a fundamental change in behavior—both within the company itself and throughout the entire supply chain. In this article, I delve deeper into the challenges, benefits, and necessary behavioral changes required to promote sustainable practices in the construction industry.

Profit vs. Value

In my work with various companies, I often encounter the same challenge: how do you create value within a circular business model? Companies are often hesitant to invest in sustainability when the benefits aren’t immediately visible within their own organization.

Take the construction industry, for example. A company might invest in sustainable construction methods that reduce operational costs for future occupants. However, if the company itself doesn’t reap the benefits of these savings, it becomes difficult to justify the investment. This creates a gap between a company’s sustainable efforts and the eventual benefits, which often end up at another party in the supply chain.

Moreover, the initial costs of sustainable materials and construction methods are often higher. Contractors are frequently judged on their ability to keep construction costs low, making sustainability sometimes seem like a luxury that can’t be afforded.

What Does a Circular Business Model Deliver?

While the challenges are significant, the transition from a linear to a circular business model offers many advantages. One key benefit is that companies making this shift are better prepared for the increasing demand for circular products and supply chain partners. Future legislation and regulations will focus more on sustainability, lower environmental impact, and higher circularity. Companies that start to adopt sustainable practices now can do so at their own pace. When stricter regulations come into effect, laggards will have to quickly adapt just to remain eligible for tenders, which can involve significantly higher costs.

Additionally, companies that embrace sustainability now can cater to the needs of the “sustainable frontrunners” in the market—customers who are intrinsically motivated and willing to pay more for sustainable products. By doing so, these companies can be the first to meet this demand and create new business opportunities.

Given recent geopolitical developments, it is becoming increasingly important to have robust supply chains. In 2021, 25% of the gas supply in the Netherlands was under pressure. This share had to be reduced quickly, leading to high costs. Constant demand with a reduced supply led to price increases. Another example of our international dependence is the disruption of supply chains caused by the COVID-19 lockdowns in 2020 and 2021. Production and imports were halted, containers were stranded worldwide, leading to long delivery times and high transport costs.

The transition from linear to circular construction enables companies to increasingly reuse or recycle building products after the deconstruction of a building. As a result, companies can obtain a larger portion of the materials needed for future projects from existing circular properties, without relying on other countries. Thus, a circular business model also contributes to the financial risk management of the company.

The Key to Circular Construction

To make circular construction successful, it is essential that companies critically evaluate their current business models and engage in discussions with suppliers and partners. Redefining roles and redistributing budgets and margins within the supply chain is necessary to truly achieve sustainability. The key to circularity in construction is to build what is (circularly) designed and developed. It is crucial that architects and developers consider materialization and disassembly early in the design process.

This change also affects the working methods of other companies in the supply chain and requires a new perspective on the added value they can offer. It’s not just about working efficiently; it’s about how your company can contribute to a circular economy and whether you are willing to adapt your processes accordingly.

Behavioral Change: The Importance of Support

Behavioral change is often one of the biggest challenges in implementing sustainability and is nearly impossible without management support. For example, if a project manager acts according to the sustainability vision discussed with the management, they must also receive the necessary support when additional investments are needed in projects. If this doesn’t happen, it undermines the organization’s credibility and discourages employees from making sustainable choices.

Moreover, it is important that employees understand why sustainability is important, both for themselves and for their organization. Can it be explained in one sentence? This could relate to objective reasons such as cost savings or market positioning, but also to more subjective motivations, such as the positive feeling that comes from making a sustainable contribution or a shared drive within the team. If employees cannot articulate these reasons, the foundation for behavioral change is shaky.

Challenges in the Construction Sector

The construction sector is known for being conservative when it comes to embracing circular principles. Through my work in this sector, I understand why. For a consultancy firm with a leased office and 50 computers, the sustainability challenge is relatively simple: you negotiate a sustainable energy contract with the landlord, lease electric cars, encourage remote working, and make sustainable purchases. In the construction sector, however, the challenges and investments in sustainability are much more complex and extensive. Circularity in construction involves building, maintaining, and deconstructing buildings and infrastructure, and reusing or recycling materials after deconstruction. This process spans several decades, requires large investments, and involves countless interests that must be aligned within a complex supply chain. All of this must be done without losing sight of increasingly stringent (inter)national legislation and regulations.

Madaster: The Catalyst for Accelerated Behavioral Change

Madaster plays a crucial role in changing the behavior of entrepreneurs towards sustainability. The platform provides companies with the tools to monitor and optimize their construction projects for sustainability. Madaster makes sustainability tangible and transparent by showing companies how design and construction choices impact environmental scores such as embodied carbon and disassembly. This makes it much easier to make sustainable choices. Moreover, Madaster connects various actors within the construction supply chain, allowing sustainable choices and their implications to be discussed early on with all relevant parties.

What makes Madaster unique is that it brings the entire construction supply chain to the table, ensuring that no one is caught by surprise and that what is designed is actually built.