In recent years, cutting carbon has become an imperative for suppliers and buyers of building materials. The Infrastructure Carbon Review has focused the efforts of the construction industry to reduce emissions across the supply chain.
Clients demanding certification to voluntary standards like CEEQUAL, BREEAM, BES6001 and BS8903 are also drivers, while Environmental Product Declarations (EPDs) have made it technically possible for suppliers to measure and report the environmental impact of their products. It’s increasingly acknowledged that ‘where there’s carbon there’s cost’. In a competitive industry, cutting carbon and associated costs is a great way to protect margins.
It’s also true that the environmental credentials of building materials are now being considered alongside their price, quality and availability as the fourth differentiator when making a purchasing decision. Organisations that we’re working with, for example leading UK contractors and developers Wilmott Dixon and Taylor Wimpey, now have procurement policies that favour low carbon suppliers, a trend that is set to accelerate.
Yet companies in the construction supply chain seem slow to adapt to these changes in market dynamics. Suppliers are uncertain about how to measure and cut carbon efficiently, and how to work together across the whole construction value chain to uncover business benefits from low carbon products. Arguably the sheer complexity and cost of environmental auditing has often led to inaction instead of innovation.
A lack of communication around the ‘what’s in it for me’ benefits lies at the heart of the problem. While BES6001 is driving suppliers to carry out often costly life-cycle analyses like EPDs, the findings often gather dust. Companies lack the confidence to compare their products’ environmental credentials, which makes life harder for buyers and procurement teams to make informed purchasing decisions.
Something as simple as trying to compare, side by side, the thermal performance, price per square metre and environmental credentials of different insulation products can require hours of research. And at the end of it, can you really be sure you’re comparing ‘apples with apples’?
In my conversations with suppliers of low carbon building materials, it is clear that there is an untapped potential for life-cycle analysis to cut costs and increase business opportunities. The process of carbon footprinting to an international standard, when combined with lifecycle costing, uncovers three benefits.
It identifies product manufacturing efficiencies, areas for future innovation and, most importantly, the embodied carbon of the product – a new product feature that customers are really starting to value.
Life-cycle analysis presents a significant opportunity for suppliers to reduce their costs and so protect margins or increase market share. The value of the information is only fully realised if it is integrated into a holistic marketing and communications strategy that allows buyers to make easy and meaningful like-for-like comparisons.
Suppliers need to move beyond simply complying with environmental standards and treating the carbon footprint of a product as a mere qualifier for tenders. They should instead present key stakeholders – customers, investors, their staff – with a positive statement of how their products can have a lower carbon impact, all while competing on price, quality and availability.
Getting this right gives suppliers the advantage they need to acquire market share and grow revenues in a competitive market, while also improving their reputation. This is the real commercial value of low carbon construction products.
And this is especially pertinent for suppliers at the cutting edge of sustainability. The Carbon Trust carried out a ground-breaking project with, among others, Lafarge Tarmac to develop low temperature asphalt. The 39% reduction in carbon emissions of this innovative new product is a real achievement, but it is the business case as a whole that makes it so compelling.
Not only does low temperature asphalt promise to reduce the carbon footprint of road contractors, it can also save the road industry £46.2M in energy costs over the next ten years if pickup is as strong as expected. By marketing a product’s quality, cost and environmental performance holistically, suppliers find a comparative advantage in a highly competitive market.
In this way, market leaders and new entrants alike can strengthen sales by footprinting construction products. It allows for direct comparison between products on cost, performance and environmental impact. Suppliers can also uncover the true environmental impact of their choice of raw materials. Marshalls, a leading stone and concrete product manufacturer, wanted to navigate the complexities of whether or when to choose virgin or recycled inputs.
The Carbon Trust worked with the company to help it gain further operational insights from its on-going footprinting work. In some cases the use of virgin materials had lower carbon emissions than recycled aggregates, once the energy required to process the outputs of demolition (from crushing and grading through to transport) had been taken into consideration. This insight is central to how Marshalls communicates the wider value of its products, helping customers make informed choices.
Carbon footprinting and lifecycle costing hold a lot of promise for the fast-moving construction product suppliers industry. But my work at the Carbon Trust has shown, time and again, that they are most effective when integrated into a general commercial strategy. Suppliers need to move beyond compliance to exploit the commercial advantages of their low carbon products. They must communicate the ‘what’s in it for me’ benefits to developers, contractors, and indeed their clients, and show them how they can decarbonise their supply chains without compromising on quality, performance or cost.
This article first appeared in Infrastructure Intelligence.
