Sustainability in the Construction Industry 2011–2012: Market Trends and Opportunities, Forecast of Budgets and Profitability31 Oct 2011 • by Natalie Aster
London – Between 2011 and 2012, buyer sustainability management budgets in global construction industry are expected to rise by 7%. This is believed to reflect the increasing need to adopt sustainability, comply with legislation, meet client demand and the interest of internal management in sustainability issues during the period. According to the report “Sustainability in the Global Construction Industry 2011–2012: Market Trends and Opportunities, Forecast of Budgets and Profitability, Construction Industry Procurement and Marketing Initiatives” by iCD Research, global respondents from supplier companies are expected to record an average increase of 4% in their sustainability budgets between 2011 and 2012, which can be attributed to the increasing demand from clients, cost savings and the need to adopt green technologies.
Between 2011 and 2012, the global construction industry is confident about profitability due to the adoption of sustainability practices
Between 2011 and 2012, companies across the global construction industry predict an increase in profitability following the adoption of sustainability practices. From ICD Research survey, respondents expect the increase in profitability to be supported by costs savings, optimal resource utilization, growing demand and the focus on waste reduction during the period. Moreover, companies are reducing overheads and production costs through the optimal utilization of resources in production processes, which reduces the cost of goods and enables companies to contribute a larger proportion of expenditure to research and development, upgrading equipment and capital improvements.
Demand for sustainable products and services are expected to be high in UK, Germany and Canada
Overall, countries such as the UK, Germany, Canada, Japan and China are anticipated to present the most opportunities for sustainable products and services in the global construction industry between 2011 and 2012. For example, in the UK, buildings account for 50% of energy consumption and carbon emissions and as concern over climate change becomes widespread, the UK government is introducing stringent measures to reduce the carbon footprint and improve the energy efficiency of buildings in the country. This is expected to increase demand for sustainability construction in the UK to 2012.
Sustainability in the Global Construction Industry 2011–2012: Market Trends and Opportunities, Forecast of Budgets and Profitability, Construction Industry Procurement and Marketing Initiatives
Published: October, 2011
Price: US$ 2,000.00
‘Compliance with legislation’, ‘positive outcomes for the environment’ and ‘cost savings’ cited as key drivers for the adoption of sustainability practices
‘Compliance with legislation’, ‘positive outcomes for the environment’ and ‘cost savings and operational efficiency’ ranked high for respondents from both buyer and supplier companies, as factors that influence the sustainability efforts of their organizations. As a general perception, sustainability is considered as a cost itself, however, in reality ‘cost savings’ act as a key driver for many companies in the global construction industry. Indeed, companies that manage and plan their operations to reduce environmental impacts can identify significant savings in capital and operational costs. However, ‘unclear political and legal requirement’, ‘lack of commitment from top management’ and the ‘lack of metrics to measure effectiveness’ are considered primary barriers to the effective implementation of sustainable practices for companies in the global construction industry.
‘Reduction in energy consumption’ and ‘effective minimization of waste’ are the leading critical success factors for suppliers between 2011 and 2012
In the global construction industry, buyer companies prefer suppliers with programs that demonstrate a ‘reduction of energy consumption’, ‘effective minimization of waste’ and with capacity to provide ‘recyclable or reusable product components’. In particular, efficient waste reduction programs can benefit the company by enabling it to utilize the same resource for an output that reduces operational and production costs. Although credible sustainability reporting is crucial as it directly reflects performance in terms of reducing carbon and GHG emissions, factors such as the ‘reporting of carbon emissions’ and ‘reduction of GHG emissions’ are yet to be considered as a priority in the global construction industry.
Construction companies intend to spend 20% of procurement budgets on green initiatives
On average, buyer companies operating in the global construction industry are planning to allocate 20% of their total procurement budget on sustainable products and services between 2011 and 2012. Consequently, there is expected to be an increased procurement of products or services such as ‘lighting’, ‘insulation products’ and ‘energy efficient facilities’ as they are considered as the most important sustainable procurement areas across the construction buyer industry, globally.
‘Email and newsletters’, ‘trade magazines’ ‘public relations’ and ‘corporate and brand websites’ to dominate future investment
‘Email and newsletters’, ‘trade magazines’, ‘public relations’ and ‘corporate and brand websites’ are expected to record the strongest investment between 2011 and 2012. Conversely, ‘television and video’ and ‘webcasting’ are expected to demonstrate the least investment gain. For green marketers, social networks and interactive blogs are a key channel for communicating with customers that are aware of sustainability and are open to new ideas. However, the use of social networks as promotional channel in the global construction industry is in the nascent stage. ‘Explain cost-benefit of sustainability to clients’, giving ‘informal presentations’ and sending ‘educational marketing messages’ to the potential clientele are considered important by the supplier companies to market their green credentials to clients.
More information can be found in the report “Sustainability in the Global Construction Industry 2011–2012: Market Trends and Opportunities, Forecast of Budgets and Profitability, Construction Industry Procurement and Marketing Initiatives” by iCD Research.
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