The Currency of Carbon – How soon before we are all paying?
One of the biggest challenges facing our sector is a vision of how construction will work in the future with the trends that we see today. How will the rise of Artificial Intelligence affect my business? What impact will net-zero have on the way that I work? How should I respond today to the skills crisis and the tightening regulatory environment? These are significant challenges for our sector because we are an evidence-based industry, reliant on proven practice to be accepted through long supply chains and demanding clients and insurers. This makes change difficult and potentially costly.
Unfortunately, the rate of change in these key areas is moving faster than our traditional evolutionary cycle can accommodate. Businesses need foresight to plan and prepare for these changes – challenging when there are so many moving parts! Companies who are successful however, can reap the rewards of a first mover, taking market share at better prices, so there is plenty of incentive to try!
It is said that business tends to over-estimate the change that an innovation can deliver in two years, but significantly under-estimate the changes over ten-years. Boards should therefore be looking at the ten-year horizon keenly to see if they can predict the pressures and environment that their businesses will be operating under. Where cultural change or change in staff expertise is needed then these can take many years to successfully affect. There are undoubtedly pressures that all businesses feel in the short term, but the ten-year plan is a proven tool for success.
One pressure on our businesses that we cannot avoid is the net-zero agenda. Predictions are easier here, as there is a defined end-date when we know what we have to achieve. Working back from this should allow us to imagine how our businesses will have to adapt, to survive and prosper, in this changing environment. Using our evidence-based skills, the following might be true:
- Continuing extreme weather will continue to increase the pressure within society to do something. Demands to limit future increases and increase society’s resilience to climate change will continue to gain political traction.
- “You cannot manage what you do not measure.” All companies will be expected to report on their full carbon consumption. This will include embodied carbon passed through supply chains.
- “If you really want to effect change, hit people in their pockets.” A unified carbon tax will both bring in funds to pay for carbon capture and change behaviours quickly, in the direction demanded by society.
We can already see the signs of Governments preparing for carbon accounting, where a business accounts for its carbon in the same way that it accounts for its money on an annual basis. We can see the EU preparing for embodied carbon taxes at its borders; we can see the Streamlined Energy and Carbon Reporting (SECR) being strengthened and its requirements starting to be passed down their large corporates’ supply chains. New tools are being published to allow effective reporting, such as the RICS’s WLCA for the Built Environment.
Carbon accounting would place carbon on the same level as cost for project definition, viability and deliverability. It may encourage localism in material supply and labour employment, it would certainly encourage clients to be demanding in their expectation of designed whole life carbon.
Constructing Excellence Midlands, in conjunction with Sustainability West Midlands and the National Federation of Builders are hosting a conference on 15th July in Birmingham where a vision for our industry will be discussed. Come and challenge the visionaries from across the sector to see if and how you might plan to adapt your businesses and your personal skills to suit the environment that we will face at the end of the UN’s “Decade of Action”.
Find out more about the conference here: Currency of Carbon Conference – Constructing Excellence Midlands
