Breaking the loop – how circular buildings can revolutionise the construction industry

A circular approach to building: unlocking the economic, environmental and social potential by Austen Bates, head of Building performance, Ramboll UK.

A new research report from WBCSD and Ramboll as lead author exemplifies the economic, environmental, and social business case a circular economy approach can bring to built environment projects.

The term circular economy has become a mainstay of the wider conversation around net-zero carbon emissions and UN Sustainable Development Goals, and for good reason; circularity will be key to achieving these targets. In the design and construction sector, a circular approach to building seeks to optimise the use of resources while minimising waste to maximise value over time. This approach requires the whole life-cycle of a building, from design and operation to maintenance and eventual deconstruction, to be considered from the outset.

With support from Ramboll as a lead author, the World Business Council for Sustainable Development recently published their report titled ‘The business case for circular buildings: Exploring the economic, environmental, and social value’. The report illustrates best practice for circular design and showcases the value of this approach, with the overall goal of
inspiring industry stakeholders to pursue circularity in building projects.

Importantly, it should be noted that stakeholders more commonly consider a circular approach for new build projects, wherein the economic value is predominantly based in market differentiation, and it is therefore a challenge to measure return on investment.

Circularity is, however, versatile, and it can and should also be applied to retrofitting projects. The benefits of applying circularity to retrofitting goes beyond just reducing carbon emissions, waste, and cost, but also leads to higher asset valuation and a positive public image.

Agreeing on a standard for circularity

A key piece of the puzzle to unlocking the full potential of circular buildings is setting an industry standard on what constitutes circularity in the built environment. With a variety of
stakeholders involved in the various design, construction, operation, and deconstruction phases, each with their own nuanced idea of how circularity adds value, this standard can be
difficult to arrive at. For example, developers may place a higher value on reducing maintenance cost, whereas demolition contractors can create jobs and add to a project’s social value, so where to focus efforts is not always easy to agree on.

Overall, the report finds that, owing to the complexity and magnitude of a circular economy, there is no single answer in terms of performance value or index. Rather, a working circular
economy should encompass social, environmental, and economic value in one interconnected framework that can be adapted in response to the project’s geographic, cultural, and demographic environment.

As such, projects included in the report were assigned value across a range of categories, such as design and construction cost, asset value, operational cost, and environmental and social value. By assigning a value based on this spread of individual factors, projects can demonstrate the holistic approach to life-cycle that circularity necessitates.

The economic case for circularity

Boosting the economic value of a project is perhaps the most immediately visible, and for many stakeholders, most attractive outcome of circularity. For example, this can be demonstrated by:

  • Avoiding cost: by prioritising existing land use and avoiding costs attached to land acquisition and landfilling, the report found that projects could achieve up to 6% cost reduction in acquisition and maintenance cost compared to a standard building
  • Increasing value: by accounting for residual material value and reduced deconstruction and landfilling costs, the study found that up to €125-135/m² net lettable area could be gained
  • Bolstering market differentiation and rapid sales: by enhancing positive branding and buy-in from the local community through transparency in environmental responsibility, positive consumer response can be quickly achieved

The environmental case for circularity

The report found that environmental benefits are the most widely known “value impact” of implementing circularity, including:

  • Reduced carbon emissions: As stakeholders make increased use of whole-life carbon analyses to measure carbon emission reductions, circular economy techniques are similarly increasingly implemented to reduce use of virgin materials and minimise waste of materials, energy, and water
  • Lowered biodiversity loss: By re-evaluating and changing how the sector extracts, processes, and uses natural resources, impact on biodiversity can be reduced
  • Better material transparency: Through effective use of material passports, financial assessments of retained material value can be improved, leading to better decision making at all lifecycle phases

Of those surveyed for the report, almost 75% agreed that circular economy principles have a tangible effect on the reduction of carbon emissions and waste.

The social case for circularity

However, arguably the most significant social value of circular building projects is job creation within local communities, as well as stimulation of local economies that benefit businesses in the area. There are also opportunities for businesses to capitalise on selective demolition, reuse and recycling of materials.
Sustainability reporting requirements are only becoming more stringent and central to business, as demonstrated by the adoption of the Paris Rulebook, and more recently the EU Taxonomy. As such, there is an ever-stronger case for a circular approach to building.

Nonetheless, there is still a clear requirement to collect more quantitative data, particularly economic data, in order to bring circular economy principles into the mainstream for
buildings. The case is there to be made, but it will take more data for industry to hear it.