Making low carbon construction commercially viable
The UK needs an estimated 4.3 million homes to fix the current housing shortage. A gap which the new Labour government has vowed to begin to plug by building 1.5 million homes during its term in power.
The ambitious five-year target will be no doubt welcomed but, in my opinion, its success will be measured on its ability to build these homes in the right way. In other words, in a sustainable, affordable manner.
Building affordable, sustainable housing is achievable, but when it comes to pursuing low carbon options in practice, businesses are often held back by the continual balancing act of profitability. The reality is that businesses need to make decisions that move them closer to their end goal and anything that diverts from that, often comes as a secondary priority. Ultimately, sustainability needs to be made commercially viable in order to make it accessible to the whole business community, not just those large enough to afford it. Therefore, policies need to be instilled that incentivise all businesses and empower and enable them to move towards lower carbon processes.
What does empowering businesses look like?
Empowering businesses requires a carrot and stick approach. On one side, businesses must pay the environmental cost of putting carbon into the atmosphere via a carbon tax. On the opposite side, there must be financial incentives for businesses to facilitate the scaling and growth of new innovative technologies. This is particularly true in scenarios where a business is developing a technology that is still in its infancy but has a clear environmental benefit - similarly to the development of solar panels.
There are already several brilliant grant schemes to support businesses to pioneer new solutions, such as through Innovate UK, but this only scratches the surface of business’ needs and takes too much of a siloed approach that is only focused on one sector. Not to mention often being a time-consuming and expensive application process with very specific criteria to meet.
As a business owner, I frequently consider what would incentivise and empower my business. Take the construction side of Gusto Group. Currently, it is significantly cheaper to use materials to build houses that have a high level of embodied carbon in them, such as concrete, bricks, blocks, plastic, fiberglass or polyurethane insulation, rather than natural materials. This is simply because natural materials haven’t been sufficiently scaled as a viable alternative.
There isn’t a reason why natural materials couldn’t become cheaper than fossil fuel derived materials, so we arrive back at the carrot and the stick analogy. We require a carbon tax to make fossil fuel derived materials more expensive to buy, and simultaneously there needs to be incentives to grow the market around natural building materials in order to create more cost-effective natural options.
Then we can start to build homes that lock up carbon within the fabric of the house rather than omit carbon in the whole supply chain of materials. Some are already exploring this, for example Hemspan - a start-up I recently invested in - is developing a range of natural building materials that lock up carbon into the building fabric.
It all boils down to making the solution work commercially and reaching a turning point where the sustainable choice also becomes the most logical and cost-effective one. In this scenario, it would be the moment at which builders choose to use natural materials because it makes financial sense to do so.
An ongoing need for legislation
Unfortunately, empowering businesses in this way will not happen overnight. There also needs to be legislation to drive it forward at a much greater rate of change. When it comes to housebuilding, there needs to be policies that will require any new homes to be built with materials that have a low level of embodied carbon and to be energy efficient when in use. Take Labour’s pledge to build 1.5 million homes in five years. Whilst this is a great promise in principle, it needs to be pursued in the right way, to set a precedent for how all future homes should be built. If the government can’t successfully do so, what chance does the rest of the industry have to follow suit?
Improvements are on the horizon - the Future Homes Standard (FHS) for example focuses on improving heating, hot water systems, and reducing heat waste in new homes and is expected to be implemented in 2025. It doesn’t, however, tackle the embodied carbon during construction.
A wider attitude shift
To realise the full economic benefits of the transition to zero carbon, the entire economy needs to be remodelled and rebalanced around low carbon outcomes. Not just one niche section - the whole economy must be committed to this transition, including the production of low carbon solutions.
Businesses need to be supported in refocusing the type of services and products that they offer. In the UK, for example, we need our manufacturing sector to grow, but we can’t do this based on old fossil fuel derived technologies, it will only scale through new solutions. Only then will the wider population change their lifestyles. With a wider variety of materials and services on the market, consumers will be able to make more environmentally friendly purchasing choices.
Unless the whole economy has low carbon as a core priority, the way in which we do business, the types of materials and supply chains we use, and the way we live will not change. Providing businesses with science-backed frameworks to use when developing solutions and supporting purpose-led organisations in balancing profitability and sustainability, will allow for a more collaborative and effective approach to the UK’s net zero transition.
Steff Wright is chairman and founder of the Gusto Group
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