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Natural Environment

Is Europe ready for the circular economy?

Sustainable, ESG compliant procurement can reduce organisational carbon footprints, encourage sustainability in the value chain and reduce costs. Isn't it time that it became mainstream practice?

Sander Scheurwater, Head of Public Affairs – AEMEA, RICS
1 June 2021

In the West, the predominant economic world view, which dates back as far as the first Industrial Revolution, is based on a “linear” model. This theory of economics rests on assumptions about the inherent scarcity of labour and capital, and the inexhaustible supply of natural resources. We now know this is a deeply flawed conception of the world. Nonetheless, much economic theory and downstream political policy remains guided, to a larger or lesser degree, by this school of thinking. The circular economic model, which underpins a significant tranche of sustainable procurement practice, offers a radically different, and much needed, alternative.

Buildings are crucial to our ecological prospects. They are responsible for roughly half of all extracted materials, half of total global energy consumption, one-third of water consumption and one-third of waste generation. Whole lifecycle appreciation of the built environment’s carbon footprint is evolving. Circularity is not yet fully mainstream across our industries, but we are not alone in that regard. Encouragingly, much is happening to move our practices in the right direction.

Building circularity into the European economies through sustainable procurement

According to the United Nations Environment Programme (UNEP), public procurement accounts for an average of 12% of gross domestic product (GDP) in OECD countries, and up to 30% of GDP in many developing countries. Sustainable procurement is not only practiced by public authorities; many different organisations in the private and non-profit sectors are also adapting procurement processes to demonstrate ESG compliance. In so doing, they are seeking to reduce their organisational costs, encourage sustainability in their value chain as part of their social responsibility and citizenship efforts, and, in many cases, to reduce costs. So, has sustainable procurement finally gone mainstream?

Josefina Lindblom, who works for DG Environment at the European Commission, explains that the European Union has prioritised sustainability in recent years. She lists the Green Deal, various sustainable finance initiatives, the new taxonomy for sustainable activities and the Energy Performance of Buildings Directive as evidence of this commitment. Now, so as to advance the circular agenda, the EU has developed Level(s): a whole life assessment and reporting sustainability framework for buildings.

Level(s) can be best described as a common language, helpful for making informed decisions and facilitating certification schemes. There is a dedicated LinkedIn group for anyone wishing to contribute to the discussion. Yvette Watson, Co-owner of PHI Factory, believes Level(s) is a useful tool with which to gauge the climate performance of your building and plot adaptive interventions where needed.

Ms Watson references the 2021 Circularity Gap Report which revealed that, globally, we only reuse 8.6% of extracted natural materials and minerals. Though this represents progress against past performance, we need to go further, and we need to go faster. Two immediate priority concerns stand out. Firstly, we must increase understanding of the environmental burden of raw materials use in buildings, which exceeds even that of direct emissions and energy usage. Secondly, to make genuine progress, procurement decisions must be informed by the best available data.

The 2021 Circularity Gap Report revealed that, globally, we only reuse 8.6% of extracted natural materials and minerals. Though this represents progress against past performance, we need to go further, and we need to go faster.

Tina Paillet FRICS, Chair of the RICS Europe Board cites studies suggesting an estimated 80% of any given product’s environmental impact is determined at design stage. For Ms Paillet, a key piece in the jigsaw will be the promotion of materials reuse, which differs from the more carbon intensive practice of materials recycling. There are some hurdles to overcome before reuse becomes the norm in construction and real estate. Demolition remains the preferred means of decommissioning and deconstructing unwanted or unused built assets. Furthermore, second-hand materials are still widely perceived to be second-class materials. But she also notes that ambitious ESG targets, focussed regulation, technological developments, international standards and evolving practices around sustainable building design are slowly changing minds.

Kevin O’Grady, Associate Director at ARUP, highlights the Transpennine Route Upgrade as an example of a major project for which a circular roadmap has been created.

This exciting pilot scheme incorporates:

In sum, this will create a digital building and materials passport, much like a car logbook, that will be invaluable in quality assuring the circular credentials of the project. It could yet form the blueprint for all similarly ambitious future works.

In spite of all this, truly circular and sustainable procurement still sits way outside of the mainstream. Nonetheless, the momentum is building; it will fall to the public and private sector, working in concert, to further advance the cause. Solid foundations for change now exist and new delivery models are taking shape. But, as is so often the case, breaking the shackles of tradition, complacency and fear of the unknown will be perhaps the hardest step. We must embrace the potential of the future if we are to remedy the ills of the past.