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Climate – The Construction industry's largest risk?

10 May 2019

Climate has been moved up the political agenda with an 'emergency' being declared by UK political parties. Is this going to be enough for construction to respond with radical change or will it take an event such as VW emissions with car manufacturers to force change?

Is climate change about to alter the world of construction and the assessment of its risk?

We are now familiar with Extinction Rebellion. What impact has this group had on construction? 


Certainly climate has been moved up the political agenda with an 'emergency' being declared by UK political parties. Is this going to be enough for construction to respond with radical change or will it take an event such as VW emissions with car manufacturers to force change?

The car industry is in the middle of a titanic move away from diesel and internal combustion towards emerging climate friendly technology. The technology solutions such as electricity and hydrogen are not yet mature, but the industry has changed with production reductions and relocations. Opportunities for new entrants into the market have arisen such as Tesla, and with the high barrier of knowledge of carbon fuel engines removed, the potential for other entrants based upon new technical knowledge has presented itself.

So what does this mean for construction and the buildings we occupy? Do we need a similar event as experienced in the car industry to make the change or is the change already happening and accelerating?

Using the car analogy, which companies are going to want to own or occupy 'diesel' equivalent buildings? Whilst more Government intervention is foreseeable to force change, there will also be increased client / shareholder pressure to ensure their businesses are occupying climate friendly buildings. Consequently the 'diesel' property assets may quickly become obsolete as the move is made to 'electric/hydrogen' buildings. Refurbishment may not be an option.       What will our future building's look like? The answer is, similar to the car industry, nobody knows.


Visionary ideas include:

-              Artificial intelligence building management

-              Power storage

-              Wireless power and data

-              Climate friendly structures and materials

-              Complete pre-fabrication


Sustainability has been on the agenda for a while in construction, but has it really been taken seriously? Is the Strata Tower in London with its roof top stationary wind turbines a suitable representation of the current efforts of the industry? The construction industry accounts for almost half of the UK's carbon footprint and so represents a big target when the focus moves away from transport. 

The integration of construction and new technologies does, however, give rise to risk.  

A good example is the construction industry dash into the new energy from waste market without fully appreciating that it involved integrating complicated evolving technology and needed extensive commissioning work to achieve the contracted output. Having accepted far too much of the risk many contractors have suffered significant losses on these projects.

The demand for construction to dramatically change is arriving. Is the industry ready for the challenge? Can it change? With the industry already highly regulated will these act as a brake on change? Who will be the new entrants into the market based upon technology led building solutions?

Insurers are said to like policyholders who 'stick to their knitting'. Are we about to enter an era where abnormal is the new normal and if so how is the risk going to be assessed of managing and integrating the required innovation to deliver the future of construction? Certainly there will be a demand to understand the risks associated with new technologies which could in turn represent an opportunity for an informed insurer.

Further Reading

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