Accelerating towards net zero requires joining the dots on digital and productivity

Peter McGettrick

Managing Director, Advisory

UK

Business leaders across the built environment sector are facing an unprecedented combination of challenges – and opportunities for change. With ever-greater scrutiny on environmental impact, and net zero ambitions sitting alongside the need to remain internationally competitive in a post-Brexit age, organisations have an urgent commercial imperative to continuously improve productivity and implement digital solutions.

Future business performance and continuity will ultimately rest on the ability to adapt to this fast-moving environment. As the UK toughens its climate target to cut greenhouse gas emissions by 78 percent by 2035 compared to 1990 levels, organisations need to achieve net zero status through more sustainable practices and digitisation can help enhance productivity to reduce waste and increase efficiencies.

Too often, organisations fall into the trap of viewing and addressing this trio of opportunities in siloes. With net zero at the tip of the triangle, the key to accelerating transformative change across all three areas is to understand the interplay between them and recognise that they call for combined solutions that cut across disciplines and projects.

Our proposition – taking an integrated approach

It is only by seeing the bigger picture and identifying the careful interaction between the sustainability, productivity and digitalisation agendas that organisations set up for a successful transformation in all three.

After all, improving productivity and empowering digital solutions are fundamentally about reducing waste and the principle of lean sits at the core of the sustainability agenda. Likewise, digital adoption is a prerequisite to deal with other complex business challenges – it is only by turning meaningful data into information that business leaders can make informed, confident decisions at pace.

Digitalisation is critical from the bottom-up as an enabler of broader environmental, social, and governance goals.

Currently, there’s a huge amount of competition within the industry around the ambition to change – but not on delivery. Organisations that work more holistically to achieve better outcomes will be the ones that gain the competitive advantage. The interdependencies at play mean that businesses need to understand and create a compelling business case that cuts across all three areas and assess the different levels of organisational maturity in each, benchmarking this against competitors.

Impact of COVID-19 – renewed impetus for change

The COVID-19 crisis has shown us what can be achieved quickly when industry commitment and investment are aligned on the same goals and without daily distractions. In the UK, Nightingale hospitals have been constructed in days and vaccines have been developed and rolled out across the globe at unprecedented speed. This has highlighted our ability to adapt at pace when needed, and the potential to apply that clarity of vision and purpose to the other huge challenges we face should be an exciting prospect for us all.

Major socio-economic shocks like the pandemic serve to define the needs and demands of the market for decades to come. COVID-19 has, in particular, accelerated the smart estates agenda. Changing the way we live, work and use our built environment will shift the demands on our digital infrastructure, increase the automation and efficiency of tasks and reduce carbon emissions.

Meeting net zero

Like the pandemic, the climate emergency undoubtedly requires a collective industry response. We now all have the dubious benefit of knowing what a crisis feels like and this should sharpen our focus on how we address the environmental and financial impacts of this one, while taking action to avoid the next.

Politically, the net zero mandate has never been stronger either – with the Government’s emphasis on stimulating a green recovery as we ‘build back better’ and various subsidies and green initiatives acting to boost funding, investor confidence and create jobs in this space.

The scale of the opportunity is monumental – from upgrading and retrofitting existing assets, to building to new standards, reducing waste, developing cleaner construction techniques and addressing lifecycle carbon emissions. Now that COVID-19 has given asset owners, managers and developers valuable breathing space to think and re-assess their portfolios and real estate strategies, those that seize the opportunity will reap the rewards now and in the future.

In the built environment one of the swiftest steps to meet net zero objectives is through a holistic approach to whole house retrofit.

As the lead delivery partner for the Greater London Authority’s (GLA) Retrofit Accelerator programmes we are already putting this into practice, and the upcoming pipeline of 1,500 homes will achieve an average reduction in emissions of at least 60 percent. When combined with the planned decarbonisation of the grid’s energy production up to 2050, properties could be hitting net zero in just one stage.

Boosting productivity

Together, COVID-19 and Brexit have generated huge uncertainty and challenges around performance and resources – putting pressure on skills and availability of labour, supply chain capacity, waste reduction, project schedules and costs.

But they’ve also taught us some valuable lessons. While construction productivity may have dropped for a period of six to nine months last year as the industry grappled with lockdowns and new working procedures, contractors were ultimately forced to do more with less during the pandemic. Across the industry, jobs were re-assigned, those on sites had to be more efficient and individuals working from home adopted to new ways of working.

With construction demand and output now increasing rapidly to drive the post-COVID recovery, that adaption will have to continue. Core to enhancing productivity in construction is understanding and improving value in the eye of the customer with lean approaches. As such, organisations need to retain an innovative mindset to get ‘match fit’ to deliver this investment, optimise scarce resources and drive higher performing programmes for end users.

Digitalisation of construction

The pandemic may have accelerated digital adoption, but it is fair to say that the quality of that adoption has been varied. Businesses have had to collaborate virtually and rapidly scale up those ways of working, without much preparation. As a result, it has polarised organisations with strong pre-pandemic digital capability and skills and those without.

Suddenly, data has become the world’s most valuable commodity and that will be a wake-up call for many organisations to finally ramp up digitalisation strategies.

Access to more timely, granular and high quality data helps businesses respond faster and better to customer needs – whether they are consumers or other businesses. There is now widespread industry recognition of how better use of data will be instrumental to making construction cost savings, automating project and asset performance management, driving productivity gains, or developing SMART assets. It will also be key to unlocking the returns of modern methods of construction and improving the cost and quality of asset delivery.

Delivering better outcomes

Businesses today have a unique commercial opportunity to respond and adapt to rapid, dynamic and uncertain market challenges. Those that do so will not just survive, but thrive.

Enhancing capabilities and building expertise across sustainability, productivity and digitalisation in tandem is the only way to drive outstanding performance, transformative change and maximise returns.

To optimise future growth and accelerate towards net zero, clients need to embrace this integrated approach and in return will benefit from stronger sustainability outcomes, higher productivity gains and greater digital upskilling. This is an opportunity that must be grasped with both hands.

For further information contact:

Peter McGettrick
Managing Director, Advisory

t: +44 (0)20 7544 4000
e: