Digitalisation and blockchain as sustainability drivers in the construction industry

Finboot Marketing Team
September 28, 2022

Recently, blockchain technology and the usage of smart contracts is being considered as a solution for creating, maintaining, and sharing built assets. 

Alongside safety, countries globally are also considering climate change by applying building emissions regulations within building guidelines. Design and construction regulations that improve the energy efficiency of buildings are crucial to limit global warming to 1.5°C before the end of the century if we are to achieve net-zero. Some of the regulations that have been promised by governments in China, across Europe and the United States are quite ambitious. 

How are different countries taking action? 

China, the largest global emitter of CO2, has pledged to reach peak emissions by 2030 and achieve net zero by 2060. According to the Green Buildings Performance Network (GBPN), ¨China’s central and local governments have recognized the urgent need to improve building energy efficiency, through the adoption of both regulatory policies (i.e., building codes) and market-based and financial policies (i.e., building energy labels and incentives)”.

The Energy Performance of Buildings Directive (EPBD), which is focused on Europe, is the foundation of the EU’s building energy regulations. It includes the “development of national Long-Term Renovation Strategies (LTRS) for the decarbonization of building stock by 2050, setting minimum performance requirements at cost-optimal levels for buildings undergoing major renovation and meeting the Nearly-Zero Energy Buildings (NZEB).” 

State and local governments in the US have the option to adopt one of the national model energy codes, which establish the minimum standards for the energy-efficient design and construction of new buildings as well as for renovations. In the US, buildings account for 39 per cent of energy use and two-thirds of electricity. 

The goal of these regulations is to work toward carbon neutrality while fostering climate awareness and encouraging investment in clean technologies and data collection. 

Our ebook about Blockchain and regulations explains how blockchain will play a role in design and construction regulations, and how it will power and maintain the safety of residents over time, as well as help to tackle climate change.

What is a Green Building? 

Any building or structure of any kind can be a structure of green construction, better called green building.

Green buildings typically include efficient use of energy particularly renewable energy, such as solar energy, water, and other resources, measures to reduce pollution and waste, the ability to reuse and recycle, good environmental air quality indoor, use of non-toxic and sustainable materials, environmentally friendly design, construction and operation methods that enable adaptation to a changing environment and last but not least the quality of life of building’s occupants. 

The construction industry is known for being conservative. It’s among the least digitised sectors, but also one of the most wasteful, generating 35 per cent of the global landfill mass. However, the need for new buildings is more urgent than ever due to the rise of urbanisation and population growth. 

Construction is vulnerable to disruption as a result of these challenges and the urgent need for innovation and digital transformation. Blockchain can help

More Ethical, Greener, and Cheaper Buildings 

Even though people are becoming more conscious of environmentally friendly techniques, sustainable construction has yet to become mainstream, and blockchain can contribute to a global acceleration of this process

Blockchain has the potential to serve as the building materials passport. Developers will be able to better address sustainability issues by using the information about each construction product to estimate a building's life cycle, reduce its environmental impact, or recycle materials. 

Project managers will also be able to determine whether raw materials or products come from ethical sources. Blockchain can therefore be a powerful factor in driving the circular economy in construction and encouraging positive behaviour change. 

Digital transformation as a necessary next step 

The need for a more digitalised model in the construction industry has been extensively documented, acknowledging that while the industry is aware of a shift towards digitalisation, implementation remains complicated. 

Less than six per cent of construction companies take advantage of digital tools, and 100 per cent of companies that deal with building materials believe that they have not yet reached their full digital potential, according to a Roland Berger report on digitalization in the European construction industry. This is a reality despite the fact that 93% of industry participants believe that digital solutions will eventually affect every step of the process.

Another report on Digitalisation of the Construction Industry published by Oliver Wyman, an international management consulting firm, affirms that digitalisation offers various ways to increase operational efficiency, and “provides a great opportunity to reduce the environmental impact of construction projects.” 

The UNE’s 2020 report, “BIM: Standardisation of digital information for the planning, construction and management of buildings and civil engineering projects,” outlines the advantages of implementing digital processes and technologies in the construction sector, including: 

● optimising goals and improving the quality of the end product 

● enhancing competitiveness 

● allowing new functionalities that improve infrastructure 

● ensuring consistency and interoperability between organisations 

● lowering costs 

● reducing environmental impact 

It is obvious that digital transformation is an important strategy that helps construction organisations reduce their environmental impact while also streamlining their operations and boosting productivity. In this way, administrative digitalisation technologies can assist businesses to optimise internal operations, manage construction contracts more efficiently, and reduce or completely eliminate paper processes. 

Accelerating digital information and building through Blockchain, the golden thread of information will speed up the culture change needed in the construction sector. Digital transformation will help drive accountability, transparency and compliance in the industry, which in turn, will help it to meet sustainability and environmental, social and governance (ESG) requirements while increasing operational efficiency.