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?
A recent Emirates Green Building Council webinar looked at the role of design, manufacture, and leasing in the circular economy. Here, we summarise the key points of the discussion.
Steven Matz, World Built Environment Forum
3 November 2021
The linear economic model that guides society has serious shortfalls when it comes to sustainability. In contrast, a circular economy approach involves the reuse and better use of resources, where the lifecycle of materials is maximised. A circular economy would see countries shift their priorities further towards sustainability goals and supply chain resilience, while businesses and personal mindsets would also be reshaped.
Jamila El Mir is an advisor on sustainable development policy and strategy to the Executive Council of the Dubai Government. As she explains, the adoption of circular economic principles will be determined by the private sector’s willingness to move beyond business as usual. To drive private sector adoption, she says, government support will be key. Good policy acts as an enabler: stimulating green procurement, research and development and capacity building.
Dr Michael Waters is Associate Professor in Real Estate, Heriot-Watt University (Dubai Campus). As he explains, many green buildings have fantastic design, but occupiers can underdeliver on the efficiencies that designers predict - by as much as four times. In the UK, some £15 billion is wasted by businesses each year through the inefficient use of space. Chief among the causes is the institutional structure of leasing practices. Around 50% of office space is underutilised. Increased lease flexibility, which would allow tenants to sublease, and the further introduction of co-working, have been shown to facilitate better workspace use. Allowing building owners greater flexibility in the use their buildings allows assets to be more adaptable, increasing their responsiveness to economic or environmental shocks.
Many green buildings have fantastic design, but occupiers can underdeliver on the efficiencies that designers predict - by as much as four times. In the UK, some £15 billion is wasted by businesses each year through the inefficient use of space.
Richard Fenne, Principal and Regional Executive Chair of Woods Bagot in the Middle East Region, echoes the call for greater adaptability. He advocates for the design principles of long life, loose fit, and low carbon. Building components, for example, can be easily repurposed or refurbished with minimal impact. Clients are increasingly asking questions about how flexibility can maximise the lifespan of an asset. Lifecycle costing is becoming an important part of decision-making processes. Technology has a big role to play in increasing circularity, by linking physical building assets and digital systems to maximise reuse opportunities. He cites the example of a leading UK supermarket that uses a full digital log of its assets to understand how best to optimise them.
According to Eric du Passage is Sustainability Marketing Senior Manager at Saint-Gobain. The main trends driving innovation, he advises, are carbon energy reduction, health and wellbeing, and mindset. And this innovation is leading to the manufacture of new types of building materials. More now than ever, clients expect higher recycled content in products. They also expect systems that are easier to dismantle, along with proof of the sustainability credentials of products.
Green building codes provide the foundation for establishing a circular economy and setting a minimum standard, says Jamila El Mir. As circularity gains traction, its scope broadens to include more concepts, such as the adaptability of spaces. Waste management, though, is often the most immediate thought when it comes to circularity. Policy can help further establish sustainable behaviours. In much of the UAE, landfill tipping fees are being revised upwards, encouraging developers to consider the quantity of materials used and waste produced.
New business models are emerging that embrace circularity. For example, in many markets, fixtures and fittings can now be leased, remaining the property of the manufacturer, to whom they are ultimately returned for reuse or recycling. The alternative is that they end up as landfill.
Tina Paillet is Chair of RICS Europe and a senior executive at one of the world's largest real estate asset managers. She writes here in a personal capacity. In this series, she will consider what new workplace paradigms mean for investors and occupiers, employers and employees. This week, she details a series of new design norms that can health assure workplaces and draw employees back into the office.
More now than ever, clients expect higher recycled content in products. They also expect systems that are easier to dismantle, along with proof of the sustainability credentials of products.
Retrofitting and avoiding obsolescence is an important part of the decarbonising process. In the UAE, buildings as young as 15 years old are already facing demolition, says Mercedes Gargallo, Associate with Arup. As property leases become shorter, property managers need to assess and add value to their buildings more frequently than ever before. Retrofitting can slow the pace at which buildings become obsolete. In addition, more adaptive space will enhance cash flows by maximising building use.
Traditionally, buildings have been built for particular types of occupiers. This has caused inefficiencies that frustrate sustainability and circularity practices. A more engaged approach between those parties involved in the building development process could ease this tension. Often, profitability measures – the incentive to develop the land for the highest value at the lowest reasonable cost – are the cause of this inertia.
In the past, a circle of blame persisted. Occupiers would hide behind excuses about the availability of green buildings to explain their choice to occupy so-called brown assets. That, in turn, allowed investors to cite a lack of occupier demand for green buildings to explain the expansion of their brown portfolios. However, the industry is waking up to the climate crisis. The business case for green is louder than ever. It is incumbent on the professions of the built environment to develop practicable, holistic and future-facing solutions.