Circularity Advantages the Built Environment

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Written by Grey Lee and Adam Mitchell-Heggs


Introduction

The built environment, or the human made environment, is the space that we live, work, and recreate on a day-to-day basis. From being born in hospitals, learning in schools, working in offices, and living at home, almost all human activities are concentrated into different structures within the built environment. Globally, the construction industry generated $1.39T in revenue in 2018 according to Deloitte within a total built real estate valuation of $200T, based on research done by Savills. Despite being the basis of our daily livelihoods, the construction, maintenance, use, and demolition of our built environment is one of the most important sectors from the perspective of resource consumption, and waste generation:


  • Construction: The construction industry is a giant consumer of both natural and man-made resources. For instance, concrete is the second most used natural resource after water with four billion tonnes produced globally, 61% of all wood or wood-products are used in construction (in the UK); over 50% of the world’s steel consumption is in building construction.

  • Demolition: Fewer and fewer buildings are designed to endure, with an average life expectancy of 60-70 years. Construction and demolition (C&D) waste is one of the heaviest and most voluminous waste streams generated. In the EU C&D waste accounts for approximately 25% - 30% of all waste generated.

  • Building Use: It is also important to look beyond the construction and demolition process and into the actual building use. Buildings consume 40% of the world’s generated energy, and 70% of its electricity. They also emit over one-third of U.S. greenhouse gas emissions, which is more than any other sector of the economy.


The built environment has faced a lot of pressure to grow in the last centuries.  A rapid expansion of the human population in urban environments drove the need for larger cities. This pressure, combined with the ability to mass produce cheaply (though complexly), has positioned the industry into a take, make, dispose framework. This linear approach provides short-term economic value whilst neglecting longer term economic, societal, and environmental value.


The construction industry is now facing increasing pressure to be more sustainable. Governments have awakened to the threat of man-caused climate change, over consumptions of resources (including energy), and poor disposal practices. New regulations have been imposed across the globe to drive more sustainable practices, for example: 



An old chinese proverb states that the best time to plant a tree was 20 years ago… the second best time is now. The same is true for the built environment; the time to act is now! 


We are excited to share this series “Circularity Advantages the Built Environment”. The objective of this series is to demonstrate the potential of circular economic principles across the built environment value chain to drastically reduce waste at each part. We will focus particularly on the application of 4th Industrial Revolution (4IR) technologies as a powerful enabler of circular economic principles, enabling new business models and also new models of cross industry collaboration. In this introductory article we provide the reader with some key concepts that will be used through-out the series, and provide some existing solutions that have emerged.


Nodes of Waste

The construction industry, from extraction, through build-out to use, and ultimately demolition, is complex and generally arcane. It is quite easy to think of waste in the building environment simply as the product of demolition that is transported out of our urban environments for sorting and landfill. However, there are quite a few more nodes of waste in the construction value chain that result in lost opportunity and collateral damage. 

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Traditionally, waste is perceived as the physical, unused, often contaminated, remnants of a production process or product consumption. In this series, we look at waste through a wider angle. Beyond physical by-products, waste can be considered as inefficient use of resources including utilities (energy and water), and different assets (space, machinery, and even human capital).


For instance, Carbon intensity and embodied carbon are related to the concern about waste. The energy used to process materials, while priced into a product, is not necessarily fully accounting for negative impacts of the energy source. The carbon emissions are rarely calculated as part of the cost of these materials. The production of cement, the crucial binding agent in the ubiquitous concrete of construction, is the third-largest atmospheric carbon emitter by aggregate volume. How will we approach alternatives to such a prevalent and useful material? 


CE as a solution

Circular economic principles can help bridge these inefficiencies and hazards to find new value, create new markets, and reduce externalities that diminish the environment and communities. These principles are not new, and in many places throughout history, the relative dearness of materials and labor forced decisions to better reuse things, lengthen their useful lives, and reward higher concentrations of human use per unit material. Circular principles are comparable to “yankee thrift” and “old fashioned” ways of reusing goods. On a deeper level, circular economic principles mimic natural systems where any waste material is the foodstuff of some other organism, which we will explore later. Circularity is not new but thanks to smart thinking and new tech it’s ready for the main stage, and will be a huge opportunity for savvy operators.


There is currently a vast amount of literature providing categorisations, taxonomies, and different frameworks for different circular economy activities. The Ellen MacArthur Foundation, in collaboration with McKinsey, developed the ReSOLVE framework. The ReSOLVE framework highlights high level actions, or principles, that organisations can undertake to be less wasteful (Regenerate, Share, Virtualise, Optimise, Loop, Exchange). Another study  by Kircher et al (2017) condensed over 100 definitions of the circular economy and developed a categorisation known as the 9Rs of circular economy. The 9Rs classifies different actions from most linear (useful application of materials, e.g. recycling), to more circular (extended life in product, e.g. reuse or repurpose), to most circular (smarter product use and manufacture, e.g. rethink). 


Organisations from all sectors (Private, Public, Academia, NGO, etc.) have contributed to the thought leadership around circular economy, and even cities and countries have started putting together circular plans or roadmaps. However, the implementation of circular economic activities have the most dramatic effect when they are cleverly designed within an industry system or ecosystem, combining multiple stakeholders across a value chain. Indeed, although a single supplier, a single manufacturer, or a single construction company can take measures to offset their own waste production, there is normally little impact on the larger value chain. 


The concept of a system (or ecosystem) approach is available to actors in the construction and real estate industry thanks to the emergence of the new technologies of the fourth industrial revolution (4IR). With the development and proliferation of 4IR technologies, data is more easily managed and digital mechanisms can even identify opportunity and optimizations without human review. Yet, despite this, the construction industry has yet to catch-up with other industries with respect to digitization. Construction is currently second-to-last out of 23 industries reviewed by McKinsey Global Institute, illustrating that vast improvements can be made.


4IR as an enabler

New sources of concentrated energy and the mechanization of production were the hallmark of the first industrial revolution. Subsequently, electrification enabled labor-saving machines to be distributed across the globe. Digitization, the most recent revolution, enabled computing and data processing in ever-faster and more efficient ways, and the automation of production. Now, with the ubiquitous interconnections of the fourth industrial revolution, we are seeing ways for business, culture, and governance to interact even without human agents. 


According to the WEF the 4IR can be characterized as a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres. Within this series, we will focus particularly on the vastly improved methods of data collection and transfer (e.g. IoT, Cyber Physical Systems, digital platforms); distribution and storage (e.g. 5G, blockchain, cloud computing); through to processing (e.g. big data analysis, AI, quantum computing); and applied engineering (e.g. Nanotechnology, robotics, 3D printing). Harnessing these emerging technologies and processes, and linking them to the risk management and efficiencies of circular economic principles, promises new frontiers of achievement in the built environment.


4IR technologies as standalone products should not be considered as a panacea for the built environment’s waste problems and inefficiencies. Instead they should be perceived as enablers for more value-rich production practices; smarter business & consumer models; and platforms for multi-stakeholder collaboration. 


By assessing the dimensions of waste across the value chain, construction industry stakeholders can begin to identify key areas of waste, and use 4IR technologies to design circular solutions to maximize resource productivity whilst meeting the appropriate specifications for shelter and building functionality. If designed and applied effectively, stakeholders can provide solutions that are societally and environmentally beneficial compared to traditional methods, whilst also generating high economic value for themselves. 


We have included a few high level examples in this introductory article, but will be taking a deep dive in the articles that follow. In the series, we will explore some of the key features of this new revolution and provide in-depth descriptions on how specific 4IR technologies are and could be used to enable circular economic principles within the built environment.


Material Extraction and Use

Enel has embraced the circular economy to reduce materials extraction and optimize use patterns throughout its operations. Under the rubric of “CirculAbility,” the corporation has distributed a methodology to evaluate materials use choices in a circular economy framework. Using a variety of empirical and logic processes, they have determined a circularity index formula to guide their decisions on this front, and provide a set of KPIs that they can use to establish priorities. Their work has led them to join the CE100 group, under the auspices of the Ellen MacArthur Foundation, and to line up their work with the UN Sustainable Development Goals. This shows how a major corporation is using circular economic principles, developing internal metrics to track progress, and engaging with ancillary objectives including corporate social responsibility through the application of 4IR processes in materials tracking, processing, and exchange. Other large public entities will be monitoring their progress.


Processing and Manufacturing

Caterpillar has made an extensive strategic commitment to remanufacturing and circularity in their mass fabrication processes. Remanufacturing of their products ensures customers attain maximum productivity from these assets, ensuring the lowest life-time ownership costs, and preserving the lion’s share of the materials and energy that was needed to bring the product to market in the first place. The company’s processes are responsible for repurposing nearly 150 million pounds of iron each year, among other resource preservation results. This is a strong move for the brand, aligning it with various corporate ESG objectives and helping them stand out in a field of other heavy machinery manufacturing giants. They are also embracing 4IR concepts, including in their work in conjunction with the Golisano Institute for Sustainability at the Rochester Institute of Technology on “condition assessment of used electronics.” This uses automation, characteristic tracking, and information processing to assess electronic parts being returned to Caterpillar, in order to maximize their useful life for customers.


Supply chain (Processing and Manufacturing, Distribution, and Logistics)

From sustainable procurement, through to tracking goods across the value chain, there are many smart business models that have recently emerged. The Belgian company Werflink is driving economic, social, and environmental improvements within the Belgian construction industry. Werflink is an online sharing platform on which construction sites and companies can share equipment, materials, resources, freight space and facilities. On the Werflink platform, companies can swap, sell and share unused construction equipment, materials, resources and freight- and storage space. The purpose is for the construction sector to make intelligent use of available resources at a local level. Such a platform vastly reduces waste from unused or unneeded materials, reduces the reliance on new equipment, and promotes local collaboration between different stakeholders.

 

Construction process & Demolition

Buildings can be designed for longevity and flexibility to avoid the demolition associated with changing market requirements for buildings. In the last century alone, buildings have been designed to have half the life expectancy.  We should look at longevity slightly differently than in the past. Longevity in construction does not necessarily mean that an edifice will stand tall and strong for hundreds of years; but what is stopping the development of modular building components that can be used over the planned life expectancy of several buildings. 


Smarter Building Use

The built environment is still relatively traditional. Both with respect to the construction of buildings and their use following construction, there is still huge room for improvement with respect to smart business models and use models. In recent years there have been a number of new start-ups that have been providing new services made possible thanks to the improvement of digital technologies. The built environment is seeing a wave of new business models emerging, facilitated by digital technologies. Some of these models are driven by platforms that help, when used responsibly, unlock untapped value of otherwise wasted assets. The Sharing component of the ReSOLVE framework encourages a different approach to material use that has been made far more feasible thanks to rapid adoption of 4IR technologies.


The primary example of a successful organisation is Airbnb. The concept of renting one's room or property on a short term basis is by no means new, but thanks to the power of platforms, Airbnb has made this possible on a global level. Another example of such a concept is LiquidSpace, a platform that enables companies to list unused space. It is estimated that 60% of offices in Europe are underutilised making inefficient use of our built environment. Such platforms provide smart and simple solutions to unlock value of underutilized assets (in this case living and working space).


Collaboration across value chain

Historically, many in the sustainability and industrial ecology fields are aware of the circular opportunities in supply chain coordination as expressed by the Kalulndborg (Denmark) example. Energy, materials, and professional talent have been integrated to find value across enterprises in a manner of “super enterprise” process. Interdependence is a hallmark of collaboration in circular materials processing. A more recent example is the interaction between Cofa and Circular Clockworks in the Netherlands, where each party depends on trust and open communication, and the ongoing demand for the waste products of their primary product, which become feedstocks for each other [J.W. Jordans, 2016].


Interface Flooring is a $1.2B US-based manufacturer which has embraced the circular economy. They have committed to reverse global warming, and are very progressive on energy and waste. Over 58% of the materials in their products is recycled or from bio-based feedstock, and have reduced waste going to landfills by 91% since 1996. According to Mishra, Chiwenga, and Ali (2018), collaboration as shared understanding is a key to implementing circular economic processes. Interface engages with their stakeholders through Manufacture2030 and more specific partnerships like Net-Works (reducing fishing net waste) and Nextwave, also looking at ocean plastic waste. Understanding the needs of product end-users, and the users of products that can become feedstocks, has helped overcome challenges of quality and contamination in recycling and facilitated improved logistics to recover potential feedstocks. Interface will continue to harness the power of platforms, digitization, and automation to meet their aggressive goals of removing greenhouse gasses from the atmosphere through the production of their carpet products. 


Onward 

We anticipate a rapidly growing deployment of 4IR technologies and processes into the real estate and construction industry. Digitization is enveloping all businesses, and bricks & mortar is inherently a final frontier. Construction and design professionals have adopted BIM and the digital twin process will proceed.  Modular construction harnesses advanced applied sciences, especially robotics, for more efficient product delivery. Tracking materials and components in buildings will enable asset managers to create new markets for elements of buildings throughout their life cycle. Distributed sensors and cloud-based facilities management systems will optimize maintenance and building operations. Tenants will be better able to interact with their buildings providing new efficiencies and optimizing the conditions for productivity in the workplace. These various technologies of the 4IR, centered on digitization and information management, will unleash new value for stakeholders in the real estate and construction industry. 


This series of articles, in conjunction with the 2020 Harvard Circular Economy Symposium, will explore different opportunities that are waiting for investment and action: public / private partnerships, identifying problems in construction & real estate, harnessing 4IR tech, and using design thinking to iterate into new products and business models for advancing sustainability and value creation in the built environment. Please tune in for more pieces highlighting the great initiatives that are being undertaken by different organisations and conceptual ideas that are waiting to be tested in the built environment.




Opinions expressed in the article are the author’s own.

Mitsue Guerrero