Clean construction unlocking net zero - full report by Tarmac

clean construction UNLOCKING NET ZERO

JULY 2021

Later this year, the UK hosts the international climate change conference, COP26, in Glasgow. It should not be surprising to anyone that environmental issues are taking centre stage in the business arena, especially in the construction and infrastructure sector which is so important to the global effort to address climate change.

It is no exaggeration to say that without the active involvement and engagement of our industry in the UK and internationally, the battle against climate change cannot be won. The sector’s input is crucial to addressing environmental harms and to securing a sustainable future for all citizens.

Against the backdrop of a growing climate emergency, this report gives the construction and infrastructure industry the opportunity to understand how the UK’s infrastructure pipeline can be successfully delivered to underpin the transition and ultimate delivery of a net zero society.

That’s why Tarmac has teamed up with Infrastructure Intelligence to canvass the views of professionals from across the construction and infrastructure industry in a unique research project aimed at providing a snapshot of views and attitudes to carbon reduction and net zero.

It is clear that no construction company active in the UK can afford to ignore the net zero agenda. We hope that this report helps in shining a spotlight on the key issues facing the industry and what needs to be done to achieve a genuinely sustainable future.

This report, Clean construction: unlocking net zero, includes the results of a survey we conducted to canvass the latest views of the sector and also contains a number of essential insights from industry decision makers about the key challenges being faced on the journey ahead to net zero.

Clarity on strategy needed

More than 60% of construction and infrastructure professionals would like the UK government to launch a national net zero strategy before the start of COP26, with 57% also calling for the government to provide clarity on plans and support for key energy infrastructure including carbon capture, usage and storage.

These are two of the key findings from our exclusive survey that looked at a range of industry attitudes to unlocking net zero – with 45% of respondents also calling on the government to provide guidance and training to help the infrastructure sector decarbonise.

The survey also clearly found that 82% of clients considered setting targets and earlier engagement at the preliminary stage to be the main contributing factors in reducing carbon on projects.

And, on the same theme, client strategy and management (52%) and materials (20%) were the two main factors currently delivering significant carbon reduction opportunities, with skills and knowledge (13%), cost (7%) and procurement (6%) also highlighted.

As we all look forward to a post-Covid future and consider building back better and greener, it is more crucial than ever to recognise both the opportunities but also the barriers ahead to help us to create an improved, resilient, low-carbon built environment for future generations.

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Against the backdrop of a growing climate emergency, this report gives the construction and infrastructure industry the opportunity to take a deeper look at how the UK’s vital infrastructure pipeline can be successfully delivered to deliver a net zero society.

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While the survey highlighted a lot of positive attitudes in the drive to achieving net zero, it also raised a number of concerns that the industry still has to battle against including complacency, established ways of working, cost issues and a resistance to change amongst some stakeholders, while striving to put positive words into action for the good of the society it serves.

For example, 65% of survey respondents were confident the UK will deliver the prime minister’s target to reduce carbon by 68% by 2030, compared to the 35% who are not confident the target will be achieved. However, that 65% confidence could easily be described as fragile, with a combined 62% of respondents expressing only slight or moderate confidence that the target would be met, compared to only 4% who are highly confident. This scepticism is even more relevant given the government’s recently revised commitment to reduce carbon by 78% by 2035 and notwithstanding this new, more ambitious target, clearly the government has much more to do to convince the industry – and indeed society – that it is serious about decarbonising and achieving net zero.

Interestingly, 35% of those surveyed said that government funding and support was the single biggest threat to delivering the National Infrastructure Strategy, with legal and environmental issues (22%) and planning delays (18%) also ranking highly. Other important factors that could potentially derail the strategy, including delays between procurement and project commencement (9%), Brexit (8%) and private investment (7%), also struck a chord within the industry.

Training wanted for a net zero world and before COP26

Room for improvement But government support and policy aside, the survey showed that the industry itself also has room for improvement. Although almost 55% of respondents said their company or organisation already has a net zero strategy or roadmap, almost 29% said no, and a further 16% were unsure. And although 25% of respondents said they began to evaluate carbon at the start of their involvement on projects – with the majority (45%) evaluating throughout and towards

the end of the project – an alarming 25% still didn’t evaluate carbon on the projects they were working on. So, clearly there’s work to be done there. Looking further ahead, 84% of respondents said that net zero provided an advantage for their business – though a concerning 15% saw no advantage to their business. And, while 73% believe that net zero is not a threat to their business, 15% believe that net zero threatens their business survival, with a further 11% unsure.

Client leadership can create a culture of “how can we do even better?”

Industry evaluation of carbon on projects remains a mixed picture. While 30% of respondents say that they evaluate carbon throughout the lifecycle of the project, a quarter of respondents do not measure carbon at all.

COP26 is seen as a significant green threshold for many people. Before the summit doors open in Glasgow in November, nearly 50% of respondents want more guidance and training to help the infrastructure sector decarbonise. Nick Toy, senior national commercial development manager at Tarmac, said: “This for me is actually very positive news because it shows a willingness to want to learn. It’s a firm acceptance that we collectively don’t have all the answers. It means that when people are empowered with knowledge and training, they will think.”

Just under 20% reported that they personally saw a combination of approaches on projects – with carbon performance sometimes evaluated at the start of a project, on other schemes at the end, and sometimes not at all. Emma Hines, senior manager – sustainable construction for Tarmac, said: “It’s clear in some of the responses that whether a project evaluates carbon and at what intervals during the lifecycle is ultimately led by the client. For many contractors carbon evaluation is an

opportunity cost – if the client is willing to pay, of course it will happen. Clients have a major role to set challenging targets but also to create a culture of ‘how can we do even better’? The aim should be to embed and measure whole life carbon performance throughout the project. “At Tarmac, we’re still inundated with requests for carbon performance data retrospectively at the end of project. This approach will not deliver the best environmental performance or outcomes. It’s really a missed opportunity for businesses like ours to be able to work up front with clients and contractors to collectively consider how to cut carbon. This is about selecting the most appropriate products for the job, the design of those products, as well as the transport and logistics.”

While there are good levels of understanding about what constitutes embodied carbon and whole life measurement, this level of awareness is not always necessarily translating into delivery.

Over 70% of respondents confirmed that they understand whole life measurement principles but just over a third of companies are using this method.

Carbon understanding is high

but knowledge is not always being translated into delivery

Dr Martyn Kenny, sustainability director, Tarmac, said: “This is a missed opportunity because using embodied carbon measurements often fails to consider performance over an asset’s lifecycle, risking sub-optimal design and specification, and it does not give enough consideration for the environmental impacts during use, maintenance and demolition which can be significantly influenced by the design and materials chosen. The transition to a net zero society requires a greater understanding of long-term impact.

“Tackling carbon requires an industry-wide approach and early engagement to shape and embed whole-life measurement from the outset. Those building an asset may have less interest in its long-term carbon and cost performance and duly prioritise a more simplistic embodied carbon evaluation that overlooks whole-life impacts. Engaging with construction products manufacturers early in the design process will help clients and contractors make better-informed decisions about materials and design specification that improve whole-life performance.” As ever, costs loomed large in people’s thinking, though 80% of respondents expressed a willingness to pay more for low carbon products, services or materials. Almost 20%, disappointingly, expressed no willingness to pay more. The cost of achieving net zero buildings and other projects was also raised by a number of those industry decision-makers we interviewed whose views are highlighted in this report. The willingness of clients, including government, to consider whole life costs on projects will be crucial in ensuring that the industry is able to deliver truly sustainable, net zero infrastructure going forward.

Carbon accounting is creating system overload Emma Hines, senior manager – sustainable construction for Tarmac, said: “When it comes to accounting for carbon, a wide range of responses suggests that there are too many systems and bespoke tools being used and not enough commonality between businesses’ approaches. Some contractors are currently building their own embodied carbon databases when tools already exist. 12

“There’s an element of greenplating procurement to create new accounting measures which might give a balanced scorecard for carbon at a corporate level but perhaps do not always deliver improved environmental outcomes for projects. Many people in the research cited PAS 2080 as the tool they use for carbon measurement. This is a great tool for projects but not something that would be used corporately by the whole business to measure carbon.” Only if we understand the challenges we face and ask the important – and sometimes difficult – questions, can we make progress on our journey to a net zero future. We hope that this report will provide an important snapshot of UK infrastructure, including essential insights into the industry’s current views on net zero and some pointers on the steps that the sector needs to take to deliver on its environmental targets.

Keith Clarke Chair of Constructionarium

An agenda that’s moving at lightening speed The prime minister’s ten-point climate plan has been seen by some environmental lobby groups as at odds with the government’s ‘build, build, build’ agenda commitment to infrastructure. However, Keith Clarke, chair of Constructionarium, the not-for-profit organisation providing hands-on construction experience for students and professionals in the built environment sector, thinks this is wrong. “It’s a fundamental mistake to think that they are in opposition to each other,” Clarke says. The gateway issue for the UK is how it decarbonises, not a simplistic ‘build, build, build’ of public money going into infrastructure to create jobs without decarbonising simultaneously. It’s fundamentally wrong to think that the construction industry should be the engine of restarting the economy, unless it can do it while decarbonising and improving its productivity,” he says.

The drive to decarbonise has seen clients change their approach of late according to Clarke. “Top-level policy statements have changed enormously for the good and the actual procurement on the ground is lagging behind now. But we see that the pressure from finance is beginning to make that accelerate to catch up – so there is change and there is a dynamic,” he says. That dynamic gives construction companies the opportunity to work closer with their clients to help them set realistic carbon reduction targets for projects. “First of all, companies need to offer that service on all projects – to make decarbonising as an intrinsic part of the work they do as a progressive step,” says Clarke. “Some clients, the privatised utilities for example, are already doing this to great effect, but both the design and the construction side generally are not offering this service, except when it is asked for, and I think that is a mistake. I think they can offer and articulate the service and take notice of the massive and incredibly fast-moving decarbonisation of finance which private clients have to access, which has moved at lightning speed and is going to affect all private companies’ investment decisions,” he says.

At a time when public funds are going to be scarce, Clarke believes that the sector will have to show productivity improvement to earn that stimulus for infrastructure. “The biggest single issue is to make decarbonisation a gateway issue not an add-on to every procurement project,” says Clarke, who also thinks that the industry needs to train staff better in terms of carbon literacy and needs to make open access the default methods for training and sharing.

The world can’t afford the UK to mess up

Jonathan Holyoak Policy and net zero programme director at Atkins

Getting serious about delivery

Normalising net zero

The construction and infrastructure sector has a wide range of opportunities arising from the government’s ten-point climate plan, but it needs to respond in a coherent way, says Atkins policy and net zero programme director Jonathan Holyoak. “We also shouldn’t forget about the things that aren’t in the ten-point plan, like HS2 which will take a lot of cars off the road if built, so that is part of the green response that we need too,” says Holyoak. “We need to build better, build more efficiently and use all our tools to build this infrastructure with the lowest possible carbon impact and there is a challenge in all that for the whole sector,” he says.

Atkins is also playing its role in driving forward on net zero, with targets across the organisation. “It’s about making sure that the mentality of driving down carbon is embedded deep within the organisation at all levels on every project and that we are thinking about it, are focused on it, are measuring it and helping clients to articulate their needs and respond to them. More than anything else it’s about getting to the point where it’s how we turn up on any job – it’s just like safety, it’s one of the things we always do and that’s where we have the most impact,” he says.

Looking ahead to COP26 and the UK’s place in the world on the net zero agenda, Clarke says that the government has to get things right and deliver tangible gains. “Any inconsistency in the government’s approach to net zero across all sectors will be exposed,” he says. “The opportunity to seize the moment is not only an opportunity to succeed, because failure to do so will show the UK to be really incompetent in being a global leader. From the UK’s point of view, it is all to play for. From the global point of view, the world really can’t afford the UK to mess up,” he says.

Holyoak thinks that infrastructure clients have changed their approach to carbon and net zero in the last year. “I think there’s been a marked change but it’s a bit patchy still,” he says. “Not everyone is going at the same pace. Organisations like Network Rail are putting in place their very ambitious carbon plans and engaging with their supply chain about how they need to respond and everyone is interested in carbon credentials and this is accelerating all the time. We are all going on a journey, things are changing fast and most clients are showing more interest than they were,” Holyoak says.

So high stakes then in Glasgow? “Absolutely. This is not about rocking up in Glasgow with interesting announcements about what might happen, it’s about doing stuff right now - right now! - which manifestly changes the way we run and operate our infrastructure with a new design parameter,” Clarke says.

Asked whether UK infrastructure clients are equipped with the necessary skills and capacity to decarbonise their assets, Holyoak says that there isn’t a uniform picture here either. “People are at different levels of maturity in all this,” he says. “Some clients have a bit of work to do on their journey and of course that is where companies like Atkins can help. If you have a lot of existing assets, then you are obviously more constrained and dealing with the existing infrastructure asset base is where a lot of the challenge is,” Holyoak says.

As far as the government’s role is concerned, Holyoak believes that governance, especially in the energy sector, is key. “I feel quite strongly that we need an energy systems architect – a planning body which allows you to balance the different choices you have around energy supply and demand and the grid network,” he says. “Currently, we have initiatives in all those spaces, but it’s really hard to pick a sensible pathway through without a proper overall delivery body that can make those choices. That has to be government, I think. We need an energy governance system that is about the new requirements rather than about privatisation,” Holyoak explains.

Holyoak would also like the government to get serious about delivery, really understand the scale the challenge and take the necessary actions. “We need between 9-12GW of new power on the grid every year for 30 years. That’s an unprecedented build rate, so we need to face up to that challenge and think about how it’s going to work,” he says. “We also need to make decisions about the technologies that are available today and deploy them at real scale – so that delivery focus is the most important thing. We will also need a delivery roadmap that has cross-party support over a long period of time to make things happen,” he says. He is also keen that the industry and government starts thinking about trade-offs and the effects of using different technologies on the journey to net zero. “How are you going to go about driving hydrogen into the system? What’s that going to look like and how is that going to relate to the other technologies that you have got? Think about the technology trade-offs you have to make with limited funding,” he says.

Graham Edgell Director of sustainability and procurement at Morgan Sindall

Collaboration and sharing is key Views on net zero have changed over recent years with a lot more tender decisions now being taken on the sustainability aspects of bids, says Graham Edgell, director of sustainability and procurement at Morgan Sindall. Clients are getting there too, Edgell says. “The last 18 months has seen a massive awakening of the investment community and also the trade press saying to clients that they have to be more interested in this issue. Despite COP26, the government are not doing as well as they should be doing and we need to move beyond the tick box approach and see things through,” he says.

According to Edgell, the industry’s response to net zero is still challenged by traditional working methods and also low margins. There may be many warm words on the issue but Edgell still sees “more hot air than there is action”. He also believes that the industry needs to take a longer view rather than focusing too much on the here and now. “I think the construction industry is in a place where we are on low margins, we are dictated to 90% of the time by our clients in what we build and as soon as you get into the cost of things it’s all about today’s cost. If the industry could turn itself and clients from focusing on the price today to whole life costs, we would be massively taking a step forward,” he says.

For Edgell, money is at the centre of addressing the net zero challenge on projects. “There’s a lot that can be done but it’s all down to money. If you are trying to create a net zero building, then the costs go up. Modular construction is often prohibitive. If there was more encouragement and more design influence to say ‘look

we will use MMC’ then we could all join in, but it’s too big a risk for most of us at the minute because if the client says you’re only going to get this amount of money to build the job you will find the cheapest way of doing the job,” he says.

Helping SMEs do the right thing Edgell also thinks that government needs to do more in the area of legislation to level the playing field, especially for SMEs who make up so much of the industry and who will be critical to achieving net zero. Training is also an issue and he believes that more needs to be done to raise the level of understanding of SMEs on what they need to do on net zero “so that this isn’t an overhead too far for the smaller firms and if we have legislation then everyone has to do this,” says Edgell. Collaboration and working differently is key to making progress on net zero according to Edgell. “The only way is for us to share knowledge because otherwise you are going to be adding extra burden to every SME and every tier one contractor when we all want the same answers,” he says. “We need to share information and ask the same questions in the same way and move beyond the adversarial approach in our industry and find a way to collaborate and do it together. We have to get this message across,” says Edgell, who also believes that the Construction Leadership Council’s net zero taskforce should enable more collaboration in the industry. “But only if people participate. We have to have faith that things will change and collaborate more, because it’s for the benefit of everybody in our industry,” he says.

Karen Alford Flood and coastal risk management manager for digital asset data and information at the Environment Agency

Business models will need to change

Continuous improvement and assessment

Sometimes, building back better might mean not building at all but looking at other ways of delivering the same outcomes, says Karen Alford, the flood and coastal risk management manager for digital asset data and information at the Environment Agency (EA). “At the EA, we are exploring natural flood risk management approaches and holding back the water to reduce the need for hard defences in areas of high risk. The industry also has to consider where it builds. Government does not favour building in the flood plain unless critical because of the impact on flood risk now and in the future,” says Alford.

At the Environment Agency, for carbon and net zero guidance the organisation draws on the experience and expertise of its sustainability internal team as well as knowledge within the supply chain. The EA also maintains a key focus on continual improvement and assessment. “Carbon use across the lifecycle of assets is considered during project approval and standard methods for calculating maintenance activities have been developed to better understand the carbon associated with common activities to enable consistent assessment of carbon expenditure and target areas for improvements,” Alford says.

Clients have a key role to play in meeting the net zero challenge. “Clients need to consider how it is assessed at least equal to if not greater than cost in its approval process and they also need to improve their knowledge and set performance requirements on reducing carbon to achieve net zero,” Alford says. But, there’s more that could be done in the short and medium term. “Clients also need to set targets to drive carbon reduction and improved information about carbon value needs to be made available so common factors are used when calculating carbon,” says Alford.

The whole industry and government working together is critical in delivering net zero according to Alford, who believes that incentives for industry are needed as well as the approval process for projects favouring net zero options over cost. The wider industry also has a key role to play. “Organisations such as the Construction Leadership Council and the Infrastructure Clients Group are helping to influence government policy and joining forces across departments and organisations to seek alternatives,” she says. “Work also needs to be done to develop more attractive alternatives which begin to challenge traditional methods which the industry has relied upon for decades,” says Alford.

The climate emergency has affected the approach of the Environment Agency to the type of materials that it procures on projects, Alford says. “We are seeking alternative construction methods and materials. The government’s drive for modern methods of construction is driving a different approach and digital design will improve optioneering choices,” she says. “The more precise our approach can be – using techniques such as 4D – project rehearsal/planning, plus using such things as GPS-enabled plant to create accurate excavations, all have positive impact on avoiding wastage of materials, resources and vehicle movements,” says Alford.

Looking forward, what would Alford like to see in a net zero roadmap from the government? “Hard but achievable targets and selling the whole package including reducing on going costs,” she says. “Houses can be built with zero or minimal running costs and this should be a standard approach for all housebuilding. In the same way, the spotlight needs to be focussed on whole life running costs of infrastructure. The challenge, as I see it, is the business models that support the industry will have to change and that may not be welcomed by many,” Alford says.

Roger Bailey Chief technical officer at Tideway

We need the right skills in the industry “Infrastructure is a fundamental part to facilitating a more sustainable economy and the industry has taken steps forward to build more sustainably, but there is a lot more to do,” says Roger Bailey, the chief technical officer at Tideway, the project to build a 25km super sewer under the River Thames. Bailey approvingly cites the IPPR’s recent research on Skills for a Green Recovery. “The report sets out the challenges – including investment and leadership – and also recommendations, such as a responsible/ sustainable procurement to drive behaviours and outcomes as well an industry strategy to achieve net zero. These are recommendations we support,” says Bailey.

He also believes that clients have changed their approach to carbon and net zero. “The realisation that we can actively enable change rather than be idle observers of the climate crisis has brought a real focus to the roles we play to reduce our impact on the environment,” he says. “Over the past year, there has been an increased attention by clients on carbon, for an example at Tideway we are now exploring offset to see whether it’s a viable proposition,” Bailey says.

The future is about working collectively Unsurprisingly, a project like Tideway has a key focus on net zero. “Tideway has always had a focus on our environment, essentially because that’s the reason we exist - to clean up the River Thames’s environment,” says Bailey. “This has led us to think beyond the end product of a cleaner river though, and we invested heavily in our river transport strategy to use barges instead of HGVs and in turn, minimise air pollution. But it’s no secret that 75% of our carbon footprint is from the huge volume of concrete we’re using to build the tunnel. So, whilst we’ve been able to achieve things on our own, the future is about working collectively so the whole construction industry can transition into a net zero industry, by reducing the carbon impact of concrete for example,” he says. Tideway’s continuing focus on sustainability permeates the whole project. “I think we have always had a focus on doing things in the most sustainable way, for example our use of river transport and where vehicles were needed, seeking the most efficient vehicles and also in seeking sustainable options in our supply chain,” Bailey says. “But we recognise we can go further and I think investing in the innovation of

more sustainable procurement is something we can do as an industry,” he says. Tideway has carried out a 120-year carbon footprint assessment which revealed that their operational carbon was only 2.5% of the total, which is low compared to industry average. “The majority of the major projects are starting to assess their operational impacts as well, but I think the infrastructure sector is probably behind the building sector as they have been used to tools such as BREEAM which assess operational impacts,” says Bailey. As to whether UK infrastructure clients are equipped with the necessary skills and capacity to decarbonise their assets, Bailey says that things are moving in the right direction. “I think we’re making good progress. The importance of the issue is getting higher on the agenda and many major projects have dedicated teams focused on driving sustainability through the design and the supply chain, like Tideway has. What could help to impress this further, would be a collective commitment from the industry to focus on carbon reduction as well as the potential for legislation to reflect the need for change,” Bailey says. As far as the government’s role on net zero is concerned, Bailey cites a number of the key recommendations in the recent IPPR report, which Tideway supports, which he says would ultimately lead to a confidence from the industry to invest in skills, processes and innovations. “These include new legislation around procurement to ensure a focus on sustainability, increasing the attractiveness of the sector to future employees and showcasing a diverse and inclusive workforce. There is also a place for the economic regulators to allow utility companies to account for the issues of skills and employment in their business plans,” says Bailey. Bailey also highlights the importance of major projects engaging with various government departments on sustainability issues, which Tideway has done from the very beginning, alongside the Environment Agency, and he’d like to see more of that happening with experiences shared across the industry to develop a consistent approach. He also highlights skills as being a crucial part of any net zero roadmap from the government. “Having the correct skills in place and the funding available is key to the delivery of net zero and we would also welcome the adoption of the recommendations of the IPPR report, as the industry has helped to shape the way forward to deliver this ambition,” says Bailey.

Matthew Farrow Head of policy at the Environmental Industries Commission

Improving carbon literacy in organisations Boris Johnson’s ten-point plan for net zero offers a massive opportunity for the infrastructure sector, according to the Environmental Industries Commission’s (EIC) head of policy, Matthew Farrow. “Offshore wind, EV charging, housing retrofit and hydrogen networks will all provide lots of opportunity for the sector to deliver innovative built environment solutions, however the broader challenge is that net zero is an absolute target with a fixed deadline, so it’s not enough to show that we are making progress in reducing infrastructure emissions, the sector needs to commit to credible pathways to fully decarbonise against the mid-century deadline,” Farrow says. While the issue of carbon and net zero is much higher than it once was on clients’ agendas, Farrow believes that the approach to tackling the challenge needs to be more coordinated, joined up and embedded in organisations. “I would say that the biggest challenge for clients - and consultancies as well for that matter - is the need to change from carbon expertise being a specialist skill in a silo to a much higher level of ‘carbon literacy’ across organisations,” he says.

Fitting together different parts of the puzzle His own organisation, EIC, the leading trade body for environmental firms, also has a key role to play. “We want to improve understanding of how the different parts of the puzzle fit together. For example, the relationship between cutting embedded carbon and cutting operational or user carbon and looking at the technical options for these and how this fits with the wider policy framework. If you are developing a commercial building, is it in an area where there is likely to be hydrogen network in ten years’ time or is electrification of heating the likely scenario to plan for?” Farrow thinks that the Construction Leadership Council’s new ConstructZero initiative will also help by coordinating the approach across the industry.

According to Farrow, better coordination and alignment is also needed to link up the legal net zero targets with the economic infrastructure national policy statements and regional and local planning reform planned by the government. He also wants to see “imaginative, open early dialogue between all parties on how projects will fit into to a zero carbon economy in 29 years’ time and then ensuring that this ‘carbon integrity’ is maintained all the way through design, delivery and operation” and his members will be crucial in ensuring that this ‘carbon integrity’ happens. Finally, given that the UK is hosting COP26 later this year, Farrow reflected on what the UK needs to be doing concretely on net zero to leave a lasting and meaningful legacy from the event. “The purpose of COP26 is to deliver a stronger set of international commitments, so the UK’s ‘climate diplomacy’ in the run up is what really matters,” he says. “There is no doubt though that ambitious UK action will both help make the case and ensure that the surge of enthusiasm around net zero we are seeing does not dissipate next year and in future years to come,” says Farrow.

Lara Young Group carbon manager at Costain

Holding ourselves accountable for net zero Costain’s group carbon manager, Lara Young, thinks that there has been a marked change in the last year in the way that infrastructure clients approach carbon and net zero. “Everyone in the industry has changed in terms of the awareness of having to address it so there’s been a substantial shift,” she says. “Whether there’s necessarily the maturity around everyone setting a net zero target and understanding what that means is a different thing entirely. There’s certainly commitment, but what we don’t have yet is translating that into tangible action,” says Young who believes that there needs to be more clarity about what needs to be done.

Young also thinks that the industry needs to address the challenge together, putting net zero front and centre and doing things differently. “We can’t retrofit decarbonisation. To do things properly this is about genuinely making decarbonisation mainstream and that means evolving or shaping the current market to net zero – we can’t retrofit net zero into the existing market,” she says.

Mainstreaming net zero Like many, Young thinks that the industry needs to be much bolder when it comes to net zero. “We need to be more brave as an industry and call out those areas that have been maybe too hard to address – we need to open up that ‘too hard to do box’”, she says. Young is also keen that the industry doesn’t ‘reinvent the wheel’ by “doing great things in pockets” and not sharing best practice. She says there is a real opportunity to make things mainstream, citing hybrid generators as a simple example. “When I started in 2015 with Costain we were talking about them, but they are still considered an innovation today yet we have proven them time and time again. We should point out the opportunity and not wait to be asked,” Young says. She also believes that specifications need to be updated to be more flexible to deal with the net zero challenge and that clients have a key role to play here too.

The role of government is also important too according to Young, who says that while more tangible legislation and regulation would be useful, she doesn’t think it’s the be all and end all. “There’s a lot of what the industry does that informs what legislation does and vice versa. We all know the answer, we just have to do it,” she says. According to Young, the key issue is accountability. “Everyone is setting out net zero targets, but no one is really checking currently whether we follow through on them. Everything is based on intent and whilst I think it’s great to commit, a commitment is only worth as much as how much you follow through on it,” Young says. Continuing the accountability theme, Young says that the net zero challenge isn’t that dissimilar to anything else that the industry is striving to address. “It’s about holding ourselves accountable to what we say we are going to do and having genuine incentives across the whole supply and value chain, from client to the end user to ensure that carbon doesn’t fall off the radar just after everyone has filled in the tender,” she says. Incentives don’t always have to be financial, says Young. “There are different mechanics around incentivisation. If we truly want to do this then we have to set up the framework in order to make sure that the relevant party who has the influence or opportunity to act gets to play their part when it’s appropriate and is also accountable, but they also reap the benefits when they succeed. So, it’s making sure that everyone plays their part at the right time and to the right level,” she says.

Georgia Hughes Senior management consultant at Arcadis and chair of the ACE Emerging Professionals group

We need clarity on what we mean by value When it comes to addressing the net zero challenge, Georgia Hughes, senior management consultant at Arcadis and chair of the ACE Emerging Professionals group, says that cultural and behavioural change in organisations and the population as a whole is crucial. She sees no contradiction between the prime minister’s ten-point climate plan and the government’s ‘build, build, build’ agenda, but believes that how value is defined needs to be addressed. “We need to look at how infrastructure investment is going to work. The redefining of value is going to be very important and bringing in the ‘six capitals’ approach, so that we understand what we mean when we say value and that it’s not just financial value,” she says. “There needs to be more focus on the richest sense of value and if we can get that right, we should be able to nail it,” says Hughes. Clients are obviously key to getting things right and Hughes identifies three kinds of clients to deal with. “You have the clients who think they are doing everything on net zero and they don’t need any support, those who just want to maintain their status quo and hope that will reach net zero for them and they won’t have to do anything different and then you have clients who are really looking at their internal processes and supply chain and how they can reduce net zero,” she says. “All three kinds of clients are at different levels of maturity, but I don’t think that enough is being done with the first two categories,” Hughes says.

Behaviour drives everything As to whether UK infrastructure clients are equipped with the necessary skills and capacity to decarbonise their assets, Hughes’s short answer is no. “My longer answer would be that they understand how to decarbonise the asset, but I don’t think they have the skills and capability to effect the behavioural change and the cultural shift that is required for us to reach net zero,” she says. “We need to integrate longlasting cultural and behavioural change and not be overly focused on the numbers, as important as they are. Behaviour drives everything in this area and it will be imperative for us to change this in the UK – we need to seed the transformation in behaviour,” says Hughes.

Going forward, Hughes thinks that the government needs to be more actively committed to the net zero agenda and go beyond just words and adherence to financial targets. “The government needs to be committed to meeting net zero and exceeding it. We need to take offsetting off the agenda and build assets with net zero reduction in mind from the outset and there needs to be greater clarity and transparency about how the budget for net zero is going to be spent. We need more clarity on that. The government also needs to have a longer-term view and that is hard to achieve,” she says. Hughes would also like to see more ambition and focus from the government. “We need a roadmap that is more ambitious and which gets us well below net zero. There needs to be more investment and focus on how we look at return on investment and value and this needs to be fully integrated so the public can see what gains are going to be made. Both industry and wider society need to understand what we are trying to achieve here,” says Hughes. So how do all the key players become more proactive in this area to help people ‘get it’? Hughes is clear that it all comes down to communication and dialogue. “Our industry is notoriously bad a publicising what we do and that needs to change,” Hughes says. “We need to highlight the positive stuff that we are doing and not focus on negatives. We have a huge opportunity and we need to shift our thinking and talk about the innovations in a way that the public can understand. Promote the good outcomes we are achieving to elevate our profile and let’s be much clearer about what we are doing in ways that are exciting and attractive because we are the industry who will make net zero happen,” says Hughes.

Kari Sprostranova Sustainability director at Balfour Beatty

Early involvement with clients is key The construction and infrastructure sector has a key responsibility to help the government deliver on its net zero agenda, says Kari Sprostranova, sustainability director at Balfour Beatty. She welcomes the prime minister’s ten-point climate plan and says it’s now up to the industry to clearly demonstrate how it will reduce emissions from the assets it builds and operates. “Together with government, our industry partners and supply chain, we all must work together towards making more informed, sustainable choices - we all need to be pulling in the same direction,” Sprostranova says. “We must be the voice of reason and showcase what can truly be done to reduce carbon from infrastructure assets, when designing them,” she says.

Sprostranova has also detected a changed approach from clients in their attitude to carbon and net zero in the last year. “Many of our clients have either produced their own net zero carbon strategies or are in the process of developing these. One of our largest customers, the government itself, will be introducing Scope 3 reporting requirements in autumn this year, requiring organisations to publish carbon management plans for all contracts valued at over £5m,” she says. Balfour Beatty is also seeing many of its customers utilising industrialised construction solutions such as Design for Manufacture and Assembly (DfMA) to eliminate associated waste or inefficiency in product manufacture and assembly as well as introducing standards such as PAS 2080 – Carbon Management in Infrastructure Verification. “Many of our customers also now ask that all of their supply chain partners set science-based targets and as part of our refreshed sustainability strategy, ‘Building New Futures’, we have committed to setting a science-based target and to achieving this by 2030 as part of our commitment to going beyond net zero carbon,” Sprostranova says. While many contractors, including Balfour Beatty, are already going above and beyond to reduce their own emissions, there is always more that can be done. “We must look to reduce our emissions from the offset by setting up our sites more efficiently; using grid connections and electric or hybrid plant and vehicles, or switching to hydrogen powered solutions for larger machinery, wherever possible. Data is also key in driving carbon reduction. However, gathering sufficient data from the

supply chain can be a challenge. It’s a challenge that we are committed to addressing, to ensure we can drive meaningful carbon reductions,” says Sprostranova.

Supply chains are crucial Early involvement with clients is key to helping to set realistic carbon reduction targets for projects she says. Balfour Beatty looks to engage with its clients early on and advise them on alternative design approaches, whether that be through the introduction of a new innovation to reduce carbon emissions, by or encouraging electric plant and machinery. “Our supply chain can also play in integral role,” she says. “We must work closely with our partners to make them aware of new solutions to tackle problems related to reducing carbon emissions differently, whether that be optimising the use of recycled content material such as secondary aggregate or minimising the transportation of materials and plant,” Sprostranova says. Collaboration is also pinpointed as key to delivering on net zero in the construction industry. “There are significant opportunities to reduce carbon, materials and waste through design and build,” she says. “The key to decarbonising the sector, is to ensure that designers, contractors and their supply chain partners are engaged as early as possible and working together collaboratively. And before the specification of a project has been set too tightly, we must all work together through the introduction of standards such as PAS 2080, Carbon Management in Infrastructure Verification, the world’s first standard for managing infrastructure carbon, for projects valued at above £20m,” says Sprostranova. Balfour Beatty sees advancing the net zero agenda within its organisation as a collective endeavour which encompasses staff at all levels. “Everyone has a part to play in achieving our ambitions from how we engage with customers, tender for work, specify materials, run tenders for suppliers, procure goods and evaluate suppliers – all these can make a significant difference to our carbon footprint and to the whole-life carbon of the assets we build,” Sprostranova says. “It’s also up to us as a company to help our people make smart decisions, which is why we’re constantly developing new sustainable solutions that harness complex data and empower our people to make intelligent and sustainable choices,” she says.

Carol Williams Head of procurement at Laing O’Rourke

Getting the supply chain involved The government is playing a key role in the drive to net zero, says Laing O’Rourke head of procurement Carole Williams. “They have released the Construction Playbook and also a procurement policy notice on social value, so they are describing how they expect the construction industry to deliver sustainability as part of the ‘build, build, build’ agenda,” she says. “Even before all of that, Laing O’Rourke has invested in modern methods of construction to deal with a number of factors, including sustainability, so there are clearly ways in which you can deliver objectives around both sustainability and the investment in infrastructure,” Williams says. As a strategic supplier to government, Laing O’Rourke has also been playing its part. ‘There’s been a lot of work directly with government to help them understand the capabilities within the construction industry as it is today, not only of our own company, but also around the rest of the industry,” she says. Laing O’Rourke is also involved in the Construction Leadership Council (CLC), along with other main contractors and this joint industry effort on net zero is also crucial. “Whether it’s collectively as part of the CLC or directly through our strategic supplier relationship, we are able to explain how you can deliver a sustainability agenda through modern methods of construction by dealing with all aspects of sustainability – social, economic or environment,” Williams explains. A key initiative highlighted by Williams as helping to ensure that UK infrastructure clients are better equipped with the necessary skills and capacity to decarbonise their assets is the Supply Chain School of Sustainability, which was established by a number of industry partners including Laing O’Rourke. “Construction is such a huge supply chain, with over three million people working in the sector, so when we talk about who is equipped to do this we need to understand that it’s not just the people who are procuring on behalf of government, it’s right the way through the supply chain that we are trying to help. We need more people to understand all aspects of the sustainability agenda and how that applies to the construction industry,” she says.

Upskilling needed to meet net zero challenge Williams says that the government through the Construction Playbook acknowledges that there is upskilling to be done across the industry. “The Supply Chain School of Sustainability is already dealing with the digital agenda and also offsite manufacturing and there are a number of other activities going on to help in this area. We have to recognise that upskilling is needed if we are going to reach net zero targets,” she says. So, what further support from government does infrastructure need to deliver net zero? “We need pipeline visibility,” Williams says. “If people are going to invest in new technologies, there has to be more clarity and certainty around the return on investment and there has to be the right contracting arrangements. Margins within the construction industry are very limited and firms need to have the appropriate funds to invest in R&D. The construction industry is running well behind the defence industry in terms of the fees that are being paid, so we need higher profit margins that enable more R&D which in turn will mean more investment in sustainable solutions,” she says. Williams is big on collaboration and wants to see the government building on the Construction Playbook by outlining a timeline for delivery, more guidance about how the government will interact with the industry and how everything is linked up and working well together. There is big ambition from government and the industry around net zero, but how do we make sure that we turn that optimism and warm words into reality? How do we make net zero seem more achievable, within the industry and society more widely? “If you can’t measure it, you can’t manage it, so sciencebased targets are really important around the sustainability agenda,” Williams says. “Unless we get into very specific measurements, data and targets to show people how we are doing and share that data and information then we won’t get beyond aspirations. People need access to that data so they can change how they are delivering,” she says.

Adam Crossley Director of environment at Skanska

Collaboration and dialogue with clients is vital Skanska’s director of environment, Adam Crossley, is another industry leader who has seen a changed approach from clients to carbon and net zero in the last year. “I can only speak for the infrastructure clients that we work with, but we have definitely change in three areas,” he said. “Firstly, the issue is on the agenda at the top level - everyone is talking about it from the CEOs and the boardrooms. The second thing that’s changed is that they mean it and are working out how to fit it into their value chain, their contracts and the way they procure, increasingly demanding low carbon skills, capability and outcomes into how they think about managing both CAPEX and OPEX in their asset base. The third thing is that clients are starting to demand more from the supply chain in terms of low carbon and net zero – a good example being Network Rail recently asking all of its supply chain to get science-based targets,” says Crossley.

But, what of the clients themselves? Are they equipped with the necessary skills and capacity to decarbonise their assets? Crossley says it’s about more than just the clients. “Decarbonising the built environment industry, including infrastructure, is going to need a lot of new skills going forward and that’s right across the value chain. Clients, contractors, suppliers and manufacturers are going to have to invest in skills and so I don’t think anyone in the industry has the right skills to decarbonise yet, not just the clients,” he says. Organisations like Skanska are working closely with clients to help them achieve their net zero aims and that means dialogue and investment, Crossley says. “There are two key things that organisations like ours can do to help clients set realistic net zero targets. One is to strategically engage with them, or put simply, talk to them early so we’re both sharing our ideas and collaborating on what we think the best possible outcome for net zero is as early as possible. And then, secondly, increasingly invest in and show carbon reduction capability and what we can do for the client. The supply chain should get certified to PAS 2080, the carbon management in infrastructure specification,” says Crossley.

Understanding the net zero challenge Bridging the gap between the ambition on net zero and how the industry achieves this is also crucial. So, how does the industry show that stated targets can be met and convince people that this stuff is possible? Crossley says the first step is education. “There are massive cultural, technological and commercial gaps between where we are now and achieving a net zero future for the infrastructure and build environment world,” he says. “Rightly or wrongly, it’s only been in the last year or two since the government has committed to 2050, that we have seen the industry really getting its head around it. Lots of people still don’t understand the details of net zero and what it means for them. So, the first step is to understand it and that’s got to be through education,” says Crossley. He also thinks that the public needs to be brought onside on the issue too, as they are not nearly aware enough about emissions from the built environment sector, while they are aware of the damage done by the aviation and automobile sector. So how does the industry do that positively without painting the sector as part of the problem? “It’s a big challenge but also a big opportunity,” Crossley says. “To give an example, I remember a few years ago that a big German car brand had a massive emissions scandal and yet that same German brand is now taking on Tesla to be the leader in electric vehicles. So, the built environment emits a lot of carbon, but we can innovate and we can lead the world in showing how to decarbonise the built environment and make it more commercially efficient as well,” he explains.

Thanks go to the industry specialists and leaders from the following organisations, for giving their time and significant expertise towards the creation of this report. Constructionarium Atkins Morgan Sindall The Environment Agency Tideway The Environmental Industries Commission Costain Arcadis Balfour Beatty Laing O’Rourke Skanska