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Digitalization of the built environment: Towards a more sustainable construction sector

Digitalization opens up new opportunities to contribute to the achievement of the Paris Agreement targets and the 2030 Agenda and its Sustainable Development Goals (SDGs). The SDC-supported Climate Ledger Initiative (CLI) is helping to achieve the Agreement’s climate targets using digital ledger technologies such as blockchain and other distributed ledger technologies. These offer huge potential for climate action.
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Summary

The report* outlines several actions that companies, as well as governmental and institutional actors, can take to integrate digitally enabled sustainable practices. The report was drafted by WBCSD alongside its member companies to support the deployment of digital tools in the built environment, and to improve the sustainability of the buildings and construction sector.

*Download the full text from the right-hand column. Key messages from the brief are provided below. See the full text for much more detail.

Introduction

The built environment impacts our everyday lives. The development of healthy, safe and sustainable living and working environments requires the collective effort of a wide range of actors in the construction sector, from design and engineering, to resource production, transportation, distribution and maintenance.

The various manifestations of climate change, such as changing precipitation intensities and drought, resource scarcity and pressure on natural resources urge us to fundamentally change the way we design, construct and maintain our built environment. Players in the construction sector need to adapt to these new complexities in order to remain or indeed become futureproof.

Buildings also account for around 39% of global carbon emissions. We need to include embodied carbon in our calculations as it represents a significant part of the total carbon footprint of buildings.

The construction industry is a growing sector. The demand is not only for new buildings but, more prominently, for renovation of the existing stock to make it futureproof. This includes energy neutrality, health and safety of materials and indoor climate, circularity and sustainability in general. When the sector changes its way of working and embraces digitalization, the vast value that is present in big data can be unlocked. These adjustments can also allow for positive contributions to a future-proof and sustainable built environment.

This report was developed as part of the WBCSD project Transforming the Built Environment and is based on a literature review, a survey and interviews conducted with companies and organizations that have already embarked on a digital transition. The purpose of the report is to map how the construction sector is currently using digital tools to advance efficiency, transparency and innovation and to identify the actions needed to accelerate digital development towards a sustainable future of the built environment.

Tools for digitalization in construction

Digital transformations are challenging to navigate. Technology is hardly ever the problem: digitalization as well as sustainable practices require a cultural shift, where value rather than cost is emphasized, longterm fundamental improvements are prioritized over shortterm (project) objectives and innovation is conceptualized as a result of collaboration.

Sector characteristics that challenge progress include the fragmented nature of the industry, an organizational culture that is generally averse to risk and change, the low operating margins and increasing complexity of the sector.

Digital technologies used in the construction sector include general purpose technologies relating to management and governance, as well as very specific digital building technologies that support technical activities relating to design, engineering, construction and maintenance. An overview of digital building technologies is provided in Figure 3.

Individual companies can take several actions to stimulate vertical integration to accelerate progress toward digitally supported sustainable practices.

  • Reflect on the mission and strategic objectives of the organization and assess to what extent these core values are embedded in the wider business practices and results. This should include a comprehensive assessment of the organization’s sustainability impact in consideration with challenges such as resource scarcity and climate change.
  • Build an integrated strategy in which sustainability and digitalization are equally embedded into all areas of business, activities, distribution channels, tools and resources.
  • Stimulate cultural and behavioral change by demonstrating leadership, supporting crosscollaboration, critically evaluating the long-term efficacy of existing business practices and seeking out change agents.
  • Recruit staff with the right skill sets and invest in creating awareness and capacity building within the existing workforce.
  • Encourage the shift toward data-driven and innovative approaches to design, engineering, production and construction.

At sector level, horizontal integration can be supported by governmental, institutional and sectoral actors to further stimulate sustainable practices and digitalization in a number of meaningful ways:

  • Regulatory bodies and sector representatives can stimulate harmonization and standardization of data, processes, systems and accessibility.
  • Institutional actors can support capacity and knowledge development by raising awareness of the value of digitalization for sustainability.
  • Governments can provide incentives to scale innovation and resources to pilot.
  • Policy makers can reform procurement practices and regulations to encourage innovation and sustainable outcomes in the built environment

Cyber-physical technologies such as GIS, laser scanning and drones are often independently applied, rather than interconnected through an interface. Cyber-physical complementary technologies frequently draw on general purpose technologies to connect multiple devices and recognize their physical environment. Software-based complementary technologies have low technological complexity and are stand-alone and task-specific, being already widely applied in the building industry. Software-based platform technologies primarily foster transparency, thus directly addressing a major barrier for modernization in the building industry. The future-proof construction sector

A future-proof construction sector needs to balance increasing its productivity to meet housing demands while respecting the planetary boundaries. Digital solutions contribute to all areas of business continuity by improving the ability to understand, analyze and optimize sustainability performance on the level of individual projects as well as organizations or entire value chains.

The industry needs take into account an increasing amount of context information, such as:

  • location of utility infrastructure;
  • the capacity of existing constructions;
  • disruption of traffic flows;
  • health and safety of the general public;
  • changing weather patterns that may affect drainage requirements, soil conditions, heat stress;
  • biodiversity;

An integral evaluation of all these variables has become vital for the success of design and execution of any construction project.

Also, digital data management tools allow organizations to monitor, evaluate and disclose specific, detailed and often complex non-financial metrics relating to environmental, social and governance outcomes.

In the circular economy, companies will need to better understand how resources flow through their operations. Digital solutions will help organizations in tracing materials throughout the life cycle of a building, which will in turn enable their reuse.

Lessons Learnt

What has been holding us back?

The digital landscape of the construction sector has been gradually evolving over the last decades. Digital building technologies have advanced rapidly and are increasingly integrated with general purpose platform technologies as outlined in Box 1. Drawing from the typology of digital building technologies, it becomes clear that the key to unlocking the benefits of digital integration in this sector lies in the adoption of platform-based technologies. Examples of platform-based technologies are Building Information Models, block chain and logistics platforms.

The wide-scale adoption of platform-based technologies poses a number of new challenges for the industry. First, they require intensified collaboration along the value chain – they are more likely to be disruptive and destabilising to organisations than stand-alone technologies (such as CAD) that enabled optimization and sustainment of the existing regime. Second, the implementation of platform based technologies uncovers systemic issues including attitudinal and institutional barriers – in other words the characteristics of an organizational culture. Digitalization may not be the key to tackling those barriers but may well function as an impulse to address the collective . Finally, the sector invests relatively little resources in R&D and is slow in embracing innovations. Innovation often takes place in the context of an individual project, with a unique set of stakeholders, and receptiveness to change may be a contributing factor to implementation of interorganizational innovations.

What can we learn from other sectors?

Key lessons can be learned from investigating other industries’ digital journeys.

Big tech companies such as Google, Amazon, Facebook and Apple impact our everyday lives through digital (platform) solutions and a wide variety of consumer applications – collecting user data with cloud(computing) services or ee-commerce services. There are, however, fundamental differences between these technology giants and the construction industry. The information most relevant to the construction industry, asset information, will have to be actively collected with a clearly defined objective in mind, as opposed to tracking information that is the by-product of platform use behavior.

In manufacturing, the ‘smart factory’ is emerging. The smart factory connects physical production to digital information, allowing for continuous adaptation and optimization. This approach leads to efficiency gains, ultra-short production chains and less down-time. The introduction of small-scale production enabled by 3D printing technologies has helped in accelerating the design process. New direct-to-customer business models have been introduced that harness the power of the web and connect consumers to manufacturers through mobile devices and online applications. By creating a virtual-physical connection, the manufacturing sector has been able to involve consumer demands more predominantly in their production processes.

Recommendations

The report provides recommendations for a digitally enabled future-proof, resilient and sustainable built environment.

The key to unlocking the potential of digital technologies and to supporting sustainable practices lies in vertical as well as horizontal integration of digital processes within and among organizations as depicted in Figure 7.