Circular strategies for sustainable construction and building management

Your expert for questions

Emanuel Chibesakunda
Partner at PwC Deutschland
Tel: +49 175 3516769
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The buildings and construction sector is undergoing major changes

The buildings and construction industry is currently undergoing a series of dynamic developments: “Green” and recyclable buildings are expected to pave the way to a more sustainable future in the industry, while digital technologies are not only revolutionizing the construction process itself, but also promoting the urgency of connected smart cities in the future. In addition, approaches such as prefabrication and modular construction methods are setting new standards for efficiency and flexibility. However, construction companies are also facing significant challenges, particularly due to bottlenecks in the supply of raw materials and construction materials along with high demands along the entire value chain.

High demand + scarce raw materials = big impact

An example: the mixture of cement, water, sand, and gravel has come a long way before it is used in foundations, walls, and pillars. A particularly energy-intensive step with a high environmental impact is cement production. In this process, limestone is burned at over 1600° C. This not only costs a lot of energy, but also causes additional emissions because the subsequent deacidification releases high amounts of CO₂. According to a study by “Thinktank Beyond Zero Emissions”, cement production is responsible for around 8 % of global CO₂ emissions. In addition, the extraction of sand and gravel affects landscapes and ecosystems. Construction sand, which only occurs naturally, is also becoming increasingly scarce due to both high demand and excessive quarrying.

High levels of responsibility result in great leverage

The tension between processes with high environmental impact, increasingly scarce raw materials and simultaneously exploding demand indicates a high potential for circularity strategies. Studies support this: according to the “Circularity Gap Report 2021”, the construction sector offers the greatest savings potential in terms of both material and emission reduction (57 % and 50 %, respectively) compared to the fields of mobility, food and beverage, and consumer goods. To ensure that investors and builders will not be surprised by bottlenecks in the future, it is worthwhile to adopt appropriate sustainability strategies just now.

Taking proactive action today also pays off in terms of tomorrow's regulatory landscape. The UN Sustainable Development Goals (SDGs) are already influencing many industry practices, such as climate change and ocean acidification, land use change, biodiversity loss, and resource scarcity. In addition, the buildings and construction industry is one of the key sectors of the Climate Action Enhancement Package (CAEP) and the EU Taxonomy (4th Environmental Goal). Companies must expect the corresponding regulatory framework to become even stricter in the future.

Considering the alarming numbers and potentially further tightened legislation in the future, it is not enough to minimise CO₂ emissions as well as energy consumption in production and processes. In contrast, the industry must set itself the goal of documenting and closing raw material, waste, and energy loops as completely as possible. Only when combined with a consistent cradle-to-cradle approach, new manufacturing processes and building materials develop their full potential. In our white paper, we show how far the construction industry has already come in terms of circular business models, which opportunities it can apply for climate protection, and which challenges it still faces along the way.