Cost is key but solving the climate crisis comes first

Climate change is the defining crisis of our time. It is an enormous challenge and the UK construction sector is part of the solution.

Operating buildings accounts for an estimated 30% of total UK carbon emissions and, in new developments, embodied carbon can account for around half of wholelife emissions. The impact we – as developers, construction professionals and contractors – can have in driving projects towards the most sustainable outcomes should not be underestimated.

Carbon reduction must sit at the heart of the project prioritisation matrix every single time

Successful project delivery has, in the past, focused on balancing competing quality and delivery programme requirements within given budget constraints. However, this traditional approach is far too simplistic and can lead to ill-informed – and potentially costly – decision-making around carbon. We can no longer allow this to happen.

Carbon reduction must sit at the heart of the project prioritisation matrix every single time. It has become a fundamental part of the value equation and it needs to be the lens through which other competing priorities are viewed if maximum development value is to be realised.

Cost will always be a fundamental consideration and, in a market with rising inflation, the cost hurdle is even more challenging to overcome. Aecom’s own building cost index, tracking price movement in key materials and skilled trade rates, grew at a record rate of 11% in Q3 this year. Pricing pressure is expected to ease slightly as we move into 2022, but absolute levels will remain relatively high and upside risks are strong.

Against this backdrop, how do we ensure that we are delivering the best outcomes for both the environment and our clients, even when appraisal viability is stretched?

In short, we need to rethink our approach to developing projects. Optimal solutions to these complex equations – balancing design, carbon and cost factors – are unlikely to be found through a siloed approach to design progression.

We need to challenge the way we think about design from the outset. Focusing on carbon from day one embeds design efficiency principles early, increasing the potential for cost and carbon easy wins to be banked.

Success depends on the ability of holistic implications of design ideas to be explored at the point when core decisions are being made

This approach is theoretically sound, but success in reality depends on the ability to gain robust, real-time insight about the associated benefits, costs and trade-offs of the array of available design solutions. Trade-offs between embodied and operational impacts can be complex and embodied carbon calculations rely on imperfect data and many, many assumptions.

Plus, buildings, when operational, sometimes fail to perform in line with expectations. There are many moving parts and it is a big challenge.

Success depends on the ability of holistic implications of design ideas to be explored at the point when core decisions are being made. At Aecom we are integrating carbon and cost, using interactive carbon tools that allow project teams to explore the relative costs and benefits of different options and get real time answers.

This approach enables “what if we did this?” thoughts to be easily investigated without incurring additional costs or time delays.

As project cost pressures intensify, the risk that poor environmental choices could be made purely on financial grounds has never been higher, yet the broader social and environmental costs of getting it wrong have never been greater. Our role, as construction professionals, is to ensure that we present the most comprehensive picture of relative cost and carbon trade-offs to our clients – at the right time – to ensure that fully informed decisions are made every step of the way.

Brian Smith is head of cost management and commercial – UK & Ireland, at Aecom