Climate Contract Playbook Edition 3
197
[Tristan’s clause] NEW
The Origin Story
Child’s name
Tristan’s clause
Full name
Construction Materials: Procurement
Practice Area / Sector
Construction, Industrials, Materials, Public Procurement, Real Estate
By some estimates the construction industry accounts for 50% of climate change. Developers and contractors will often procure materials that are the most cost- effective rather than those that are beneficial to the environment or have longevity for the development. This is often a symptom of commercial pressure and margins being squeezed but can have a detrimental impact on climate change 114 .
Issue
The introduction of a formal ‘Carbon Budget’ alongside the traditional Financial Budget for construction projects to incentivise industry participants to reduce GHG Emissions across the project lifecycle through the selection of more sustainable materials and construction processes.
Solution
Some studies suggest that the construction industry is responsible for up to:
a. 50% of emissions causing human-induced climate change;
b. 40% of energy usage globally; and
c. 50% of landfill waste 115 .
The cement industry alone is responsible for 5-8% of the worldwide emissions of CO2 116 .
Context
The transportation of materials for construction around the world can often be done with little consideration of the environmental impact of the same with sea freight being very common and environmentally damaging. The construction industry uses standard form contracts (JCT, NEC, FIDIC, Australian standards etc.). It is common for these contracts to be amended by a schedule of amendments and there are commonly accepted ‘market standards’ for how these are amended. Clauses can be inserted into these schedules of amendments to compel parties to resource materials sustainably. The most recent update of JCT was 2016 and a new one is due around 2021. Consideration could also be given to incentivise Developers to source sustainable materials which may require statutory legal change. The encouragement of sustainable sourcing and procurement of materials would significantly contribute to reducing the impact of the construction industry on the environment. A key driver of bringing about this change is shifting attitudes in the construction industry to ensure that this becomes the market standard. The impact would be amplified if this could be incorporated within the industry standard form contracts.
Impact
114 https://constructionclimatechallenge.com/2019/05/22/3-ways-the-construction-industry-can-help-the-environment/. 115 https://constructionclimatechallenge.com/2019/05/22/3-ways-the-construction-industry-can-help-the-environment/ 116 https://reader.chathamhouse.org/making-concrete-change-innovation-low-carbon-cement-and-concrete#
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