The next 10 to 15 years are expected to be a very exciting time in the construction industry and the rationale behind this prediction is climate change.

The simple fact is that if we are to have any hope of maintaining global average temperature rises to plus-2 deg C then we need to decarbonise the global economy. This means that we need to change how we do business, engineering in particular. In construction, this does not only mean changing our design and construction approach, but also changing how we structure contracts and finance projects.

Major players in other industries are already gearing up for a market that includes climate change legislation, carbon pricing, and an underlying society that sees having a large environmental footprint as unacceptable. Carbon footprints are measured to reduce greenhouse gas emissions and, hence, reduce mid- to long-term risks in businesses ranging from consulting to oil and gas. These include:

• Luxury goods firm Kering’s environmental profit and loss account in 2010 showed that one of its brands, Puma, would have seen a 72 per cent cut in profits had environmental costs been accounted for;

• Several companies, from Microsoft and Disney to oil majors, use internal carbon trading to help manage risk and pay for environmental mitigation, with prices as high as $60 per tonne of carbon dioxide equivalent;

• Unilever is aiming to halve its carbon footprint by 2020, while Ikea has a stated long-term goal of using 100 per cent renewable energy, among other targets;

• In the transportation sector, BMW ditched incremental improvement when developing the i3, which uses completely new materials, new transmission, and an electric engine. Airbus is currently working on electric planes; and multiple airlines, including one with which CH2M Hill is working, are developing bio-jet fuels to reduce their carbon footprints; and

Shamama-Saadiyat highway

• Sustainability reporting is common in many industries, and legislation is now making it mandatory in many sectors of the economy, for example, the UK’s mandatory carbon reporting, and Qatar’s sustainable development industry reporting initiative.

Construction, however, has a long way to go. The building sector is most advanced, with “green” building design – Leed (Leadership in Energy and Environmental Design) Silver or equivalent such as Estidama, Qatar Sustainability Assessment System (QSAS), and Breeam (BRE Environmental Assessment Method) Gulf and above – fairly standard in many countries. In fact, it is effectively mandated by the approvals process in many cities, and it is explicitly mandated in parts of the Gulf, such as Abu Dhabi in the UAE and Qatar.

However, Leed Silver is not a very high bar and can be achieved with incremental improvements and some extra money. To help achieve the 80 per cent carbon dioxide emission reduction required by 2050, the industry needs to push Leed Platinum and beyond. As it turns out, judged on traditional capital costs alone, this need not be that expensive, and has even been shown to be cheaper in some markets, as Leed Platinum requires a different and holistic design approach rather than bolting on gimmicks for points.

CH2M Hill has first-hand experience of using an integrated design approach to achieve high Leed scores. For example, on the King Abdulaziz Project for Public Transport in Riyadh, CH2M Hill is working with the client on implementing Leed Silver and Leed Gold for major stations and the transportation control centre as part of building a world-class and sustainable transport system in Saudi Arabia.

In addition, there is a strong push towards sustainability in managing major programmes. Take the Dubai Expo 2020 as one example, Dubai aims at making the expo a carbon-neutral event by capitalising on available best practices and technologies.

Other sectors of the construction industry are starting to catch up. Several recent and major (non-building) infrastructure tenders and projects have included very strong sustainability components, and various government departments in the region have started to look at Greenroads, developed by CH2M Hill and the University of Washington, as the basis for new design and construction standards. But there is still a long way to go.

The prevailing mindset in construction is that if clients do not explicitly ask for a low-carbon solution, then delivering one will make consultants and contractors uncompetitive. Yet focusing on short-term price, rather than long-term value, is to misunderstand risk: if we continue to ignore very real environmental issues, then we will increasingly face problems we are already starting to see, ranging from extreme weather to breakdowns in food security. Not in 100 years or some far-off time, but in our lifetime. This is why other industries are taking the initiative to reduce their impact, taking their clients with them.

So how do we, in the construction industry, do our share and also position ourselves for a decarbonised global economy? Here are some thoughts based on what CH2M Hill and other companies in other industries are doing:

• Track and report carbon footprints not only on corporate operations but also, at least internally, on projects. This will help design and construction teams understand where their biggest impacts are so that efforts can be targeted to achieve the highest return on investment. This need not be costly: carbon factors for primary building materials are known and, as the practice becomes more common, secondary materials will follow. CH2M Hill recently measured embedded carbon on a small civil engineering project and identified opportunities for cement replacements and recycled steel to bring the carbon footprint down by around 40 per cent.

• Assign budgets on projects to research new technologies and try new approaches to design, specification, procurement, and construction. Again, this is not costly – spending a little time thinking holistically early on can bring about efficient solutions that solve multiple problems at once. For example, CH2M Hill recently helped develop solutions to coastal defences in New York State in the wake of Hurricane Sandy that emphasise restoration of wetlands and other natural environments over more traditional, and expensive, engineered solutions.

• Set carbon-related KPIs (key performance indicators) for design and construction teams. Only when someone’s bonus relies on taking carbon seriously will it happen and, by setting KPIs at the top of an organisation, the required changes in delivery mentality will be filtered down to individual teams.

• Put a price on carbon and other environmental externalities, as Puma, ExxonMobil, and others did, and include it in one’s accounting. As part of this, one must realise that accounting for carbon is not a business risk that will make one uncompetitive, but an advantage that helps add value and positions well for when carbon is priced in the global economy.

Of course, in the near term, some clients will not be interested, in which case one will need to go on it alone. Even if they are interested, a new construction approach involving short-term risks is required which will need to be managed by all relevant parties on a project. The contracts departments will not be happy.

Not every project is going to be a high-risk, ground-breaking exemplar project. At first, a new approach to construction might be something as simple as installing ECDC (electronically commutated direct-current) fan coil units or biological grease eradication, but soon it will be carbon-fibre structures, aerogel insulation, or a new alternative to concrete.

And after that, who knows? It will be exciting and challenging and fun… and absolutely essential.

*Nicholas Lander is CH2M Hill’s Regional Sustainability lead consultant; a contributing author to Building for Extreme Environments – Arid, a recent publication by the Chartered Institute of Building Services Engineers; and a board member of the Emirates Green Building Council.

** CH2M Hill tracks and reports its sustainability performance each year. It has embarked on a strategy to reduce its carbon footprint in line with maintaining temperature rises at or below plus-2 deg C, and is working with clients around the world to help them reduce their carbon footprints in a meaningful way.