The Circular Economy: Part Two

Drawing on natural light for reduced energy consumption and using locally sourced furniture and materials, an environmentally sensitive design for HP Inc.’s new offices at London’s Thames Valley Park achieved a BREEAM Very Good Rating.    

By Rob Atkinson | Senior Project Manager

In part one we covered the core principles of the circular economy, namely:

  • Designing out waste and pollution
  • Keeping products and materials in use
  • Regenerating natural systems
  • Part two discusses how to apply these principles to commercial interior projects and how resource efficient opportunities exist throughout the construction lifecycle—including product manufacture, design, construction, operation, and refurbishment.

    Four Levels of Change to Realize a Circular Economy

    To bring a circular economy into practice within the design and construction industries requires that four things change: products; companies; the network of relationships between companies and customer; and policies.

    • First, design needs to focus on how products, fit-outs, and environments can be recyclable and reusable.
    • Second, the manufacture of materials should be based on raw materials that utilize green supply chains and use clean manufacturing methods.
    • Third, construction company business models must dramatically limit their creation of waste, energy use, and the use of virgin materials.
    • Finally, the networks of clients and companies that manage key facilities must be linked in such a way as to limit CO2 production and waste, conserve energy, and support human wellbeing.

    These four levels of change are interconnected, requiring close collaboration between different sectors. Local, national, and international policies will ultimately be needed to support and regulate markets, but in practice such measures have often been slow to implement.

    Whose Responsibility?

    The Paris Agreement of 2015 was the initial legislative framework by which 186 nations looked at mitigating the worst effects of climate change, including the international aspects of financial planning and adaptation to adverse changes already taking place. Since then, the onus has been on individual nations to determine their own pathway towards compliance. Some nations have laid out detailed policy objectives to support the circular economy within their markets (the EU’s 2030 climate and energy framework is an example) and have set the following key targets by 2030:

    • Minimum 40 percent cut in greenhouse gas emissions (from 1990 levels)
    • Minimum 32 percent share for renewable energy
    • Minimum 32.5 percent improvement in energy efficiency

    Other powerful nations, however, see climate mitigation as an inhibitor to economic prosperity and have downscaled their ambitions or withdrawn from the agreement altogether. In the absence of a comprehensive top-down legislative approach, the task of tackling the adverse effects of climate change needs to be taken on by industry itself and include all sectors of the commercial property industry from design and construction to suppliers and manufacturers.

    Fortunately, among corporate clients there has been a huge upswing in sustainable commitments, with the Global Reporting Initiative Index showing over 90 percent of the largest companies (85 percent of which are in the S&P 500) now filing sustainability reports. A concern for sustainability is also driving potential investment in established and new sectors. A study conducted by Oxford University discovered that 80 percent of mainstream investors now consider environmental and social impacts as part of their investment decisions. And woe be the company that falls behind on their sustainability commitments. The World Economic Forum’s “Engaging Tomorrow’s Consumer” shows that consumers, especially millennials, prioritize environmental impacts in their buying decisions and can exert pressure.

    A plethora of companies are targeting or have achieved measurable results: by 2020 Bank of America has committed to being carbon neutral and purchasing 100% renewal electricity. In May of 2017 Lego balanced 100% of its energy use with energy from renewable sources. HP Inc. is targeting 100% renewable energy to power its global electricity use by 2035, with an interim goal of 60% by 2025. By 2035 Adobe will power its operations and the digital delivery of its products entirely with renewal electricity. Since 2014 Microsoft has been powered by 100% renewable energy. And the list goes on. Amazon CEO Jeff Bezos recently announced in Washington, DC that the company was launching initiatives aimed to follow the Paris climate agreement and pledged to be carbon neutral by 2040. McKinsey has reported that sustainable investment for the largest corporations is fast becoming the new norm, with up to $22.89 trillion assets professionally managed under responsible investment strategies, an increase of 25 percent over the past five years.

    Furthermore, clients have begun taking aim at their own properties and practices, a fact that has not escaped the commercial property managers and developers who manage their portfolios. Central to this is mainstreaming the principles of a circular economy by designing out waste and pollution while reducing CO2 emissions to net zero in a couple of decades.

    Currently less than one percent of buildings globally are operating at net zero, but the ambition is to scale this dramatically over the coming decade. Initiatives by the World Green Building Council, for example Advancing Net Zero, include over 128 stakeholders from organizations such as Deutsche Bank and Google to construction and development companies such as JLL, Skanska, and Multiplex. These organizations have pledged to take urgent action and ensure that their portfolios of buildings operate at net zero carbon by 2030. Additionally, some cities, states, and regions have pledged to enact regulations to ensure that all buildings, including existing portfolios, operate at net zero carbon by 2050.

    In the U.S. there are now well over 250 net zero buildings, with California leading the way. In Europe, the implementation of net zero projects has already begun at large-scale, mixed-use developments from London to Stockholm to Sydney. Part of the C40 Climate Positive Development Program, these projects aim to be carbon neutral, water positive, create zero waste emissions, and contribute to community well-being. Getting there will require an integration of practices by the construction industry, which currently creates the most outsized environmental impact. Accounting for 50 percent of the total use of raw materials, 36 percent of energy consumption, and a whopping 40 percent of CO2 emissions, the industry will need to address these impacts through circular and climate neutral developments. Although buildings with net zero status are the overarching goal, the achievement of net zero status for individual design projects is another step towards sustainability.

    The timing couldn’t be more prescient—55 percent of the world currently lives in urban areas, and that percentage is expected to grow to 70 percent by 2050. While becoming magnets for global talent and generating GDP growth, cities consume over 75 percent of natural resources and account for 60 to 80 percent of humanity’s greenhouse gas footprint. The planning, construction, and development of low-carbon, energy-efficient, and sustainable smart cities that focus on former industrial lands rather than green spaces can make the business case for circular economy practices. New, holistically-planned, mixed-use communities can serve as catalysts for a transition to a new model of sustainability, underpinned by clear environmental legislation, which is critical to effectively manage the world’s resources and improve the quality of human life.

    In the U.S. commercial, residential, and retail buildings taken together consume 40 percent of the energy and 70 percent of the electricity. They are also responsible for over one-third of U.S. greenhouse gas emissions, which is more than any other economic sector. Since the average building will stand 70 years or longer, this sector is a target for extensive energy efficiencies. By 2050 commercial building floor space in the U.S. is expected to reach 126.1 billion square feet, a 36% increase from 2018. Through several programs concentrating on building energy codes, federal energy management, appliance standards, and emerging technologies, as well as consumer education, the Alliance to Save Energy is one of many organizations working to improve energy efficiency, as is the General Services Administration. Construction firms like Bechtel, tech companies including Hewlett Packard Enterprises, and a myriad of organizations are advocates for a circular economy The good news is that efficiencies can be made. For example, according to the Construction & Demolition Recycling Association over 140 million tons of concrete are recycled annually.

    Leading U.S. contractor and construction management firm DPR recently built a mixed-use facility in Austin, TX, and housed its business unit team on the top floor. IA’s sustainable design for the new offices is pending LEED Silver, WELL Silver (the first WELL Certified™ project in Austin), and Net Zero status. Photography © Peter Molick.

    Three Things Construction Companies Must Do

    In the EU approximately 35 percent of the buildings are older than 50 years with 70 percent projected to still be in use by 2050. Therefore, construction solutions must take into account not only new buildings but the retrofitting of existing buildings. A typical cost structure shows that labor, raw materials, and energy are some of the most significant costs associated with construction. And for construction companies in the EU and the U.S. to address the carbon footprint caused by their operational practices and seek to be profitable, three things need to happen.

  • There must be a rapid transfer of energy use to sustainable energy sources among their supply chains and within their practices.
  • Raw material use must take into account reclaimed materials within secondary markets, including their tracking and management.
  • Demolition works must provide for safe removal and reuse. This will no doubt impact project timescales, training, and management.
  • Some of these goals are highly ambitious and require further planning. Others, however, are immediate and can leverage the influence construction companies have within the industry. The cement industry, for instance, is one of the most energy intensive industries, with energy costs accounting for approximately 30-40 percent of total manufacturing costs. Cement and aggregate supplies are essential building components which include quarried, crushed rock, and land and marine dredged sand and gravel. Their extraction, cleaning, production, and transportation generates eight percent of CO2 emissions. However, aggregates can also be obtained from recycling construction, demolition, and excavation wastes.

    Other industrial processes obtain secondary aggregates from furnace ash and waste from iron and steel production. In the UK, construction companies lead, with recycled and secondary materials accounting for 29 percent of the total aggregates supply. Part of the supply-side challenge is transitioning from fossil fuels to renewable energy. Since many processes, such as gypsum extraction for use in plasterboard and fly ash, are dependent on coal burning, finding suitable alternatives while transitioning to a sustainable fuel source for improved energy efficiency will avoid the cost of having to do that once environmental legislation is implemented.

    The Challenge for the Building Materials Industry

    Another arena is the building materials industry, which generates a global revenue estimated between $2 to 3 trillion. Manufactured components rely on them for everything from roof cladding to internal mechanical systems, although just six percent of materials currently used are recycled. In fact The World Economic Forum report found that less than a third of all construction and demolition waste is recovered and reused. So, there is a huge potential savings (financial and in raw materials) to be made through the reuse of materials.

    A global market for secondary materials has developed over time due to the high value of many recycled materials and the extensive waste generated from projects. For example, carpets take up the second-largest amount of U.S. landfill space. Yet, at the end of its working life most carpet tile can be returned to the manufacturer, its components disassembled to re-join the production stream to form new carpets. Some manufacturers, like Shaw and Interface that have their own circular economy already in place, make use of this technology while other companies specialize.

    Other positive examples are found in ceiling manufacturers who can make use of post-consumer recycled materials. Armstrong produces ceiling tiles using 100 percent post-consumer recycled content, saving 1 million tons of virgin raw materials. Their ceiling recycling program is the first and longest running program in the industry, having recycled over 200 million square feet of used ceiling tiles. Beyond carpet tiles, the reprocessing of aluminium takes a fraction of the energy needed to extract metal from ore, while reworked plastic products are around 80 percent cheaper than those using new materials.

    Factors limiting growth to more widespread use are profit incentives, prices determined by supply and demand, digital tracking of availability, and consumer perception. However, several industries have been the subject of substantial capital investment. Being able to reuse locally available materials is also a good way to mitigate uncertainties in supply chains and fuel prices by limiting the carbon dioxide generated in transportation and extraction over long distances, as well as creating secondary local markets for sourcing, sorting, and supplying materials. For contractors, new revenue streams open up from materials that would otherwise be discarded and to avoid disposal costs.

    What Can Designers Do?

    Designers can play a highly influential role through their proximity to clients who are project decision makers and through their commitment to using reclaimed materials. Design industry initiatives like mindful MATERIALS and the Living Building Challenge Material Petal provide a common platform for manufacturers to clearly communicate transparency and optimized information for building products and furniture materials.

    Tools to utilize this knowledge already exist in the form of LEED with its BPDO–Material Ingredients credit rewards. Sourcing should include extended producer responsibility for product return for end-of-life use, bio-based materials, sustainably-harvested wood products, materials reuse, and recycled content. By using LEED and speaking to clients about advancing the market demand for recycled content, healthier materials can be reused or repurposed in an infinite loop. Products that practice responsible sourcing and the extraction of raw materials can greatly contribute to the solution.

    Certified LEED Platinum, LinkedIn’s San Francisco headquarters is one of many LEED certified IA designs. Photography © Eric Laignel.

    Also available to existing buildings projects is USGBC’s LEED Zero certification. This verifies the achievement of net zero carbon, net zero energy, net zero water, and/or net zero waste using TRUE certification at the Platinum level. TRUE is the most comprehensive zero waste certification available in the market, helping facilities to define, pursue, and achieve their zero waste goals through project certification. This particularly relates to the building at the end of its life. Through LEED v4.1 for Building Operations and Maintenance: Existing Buildings existing buildings have an opportunity to advance the circular economy in their day-to-day operations by making intentional decisions related to purchasing, maintenance, waste diversion, and recycling.

    BREEAM also operates New Construction and Refurbishment and Fit-Out (NC & RFO) frameworks for master planning projects, infrastructures, and buildings. Its circular economy principles can accelerate positive impacts through the disassembling, reuse, and repurposing of buildings and materials.

    Designers and architects are critical forces in bringing circular economy goals into practice. Already proficient in building information modeling (BIM) systems, architects have the potential to drive prefabrication, more standardized products, and effect easier changes with minimum waste, reduced costs, and no common construction-site mistakes. They can integrate information between building materials suppliers and contractors to ensure disassembly and reuse at the end of a building’s usable lifespan. And they can maintain a digital record of building performance through BIM software that will allow facilities’ management and renovators to track materials and services for the entire lifecycle of a building. Existing buildings through LEED v4.1 for Building Operations and Maintenance: Existing Buildings have an opportunity to advance the circular economy in their day-to-day operations by intentional decisions made regarding purchasing, maintenance, waste diversion, and recycling.

    A good example is Circl, a multi-purpose pavilion built for ABN AMRO Bank (one of the largest in the Netherlands), designed to have the lowest possible environmental footprint. The design team considered both assembly issues during construction and disassembly after use. Insulation material in the ceiling is made from 16,000 pairs of used jeans, furniture is restored, and some window frames are repurposed from old office buildings. Other materials—from the wood used in construction to the aluminium of the façade panels—can be fully re-used in the future. The building has 500 solar panels on the roof producing more than enough operational power for Circl. There is even a roof garden, which offers migratory birds, bees, and butterflies food, fuel, and refuge.


    A transition to high performance, low energy, and zero carbon buildings will not be driven by standards alone; it must instead be approached through a people-centric perspective. Programs like WELL acknowledge the link between healthy buildings, wellbeing, and productivity. Communicating the virtues of a circular economy, with its push to preserve and facilitate responsible growth, is beneficial only if designers also address peoples’ need for comfort, safety, pleasure, and privacy. It is important for those working within the construction industry as architects, designers, or manufacturers to think more broadly, not just about their place within the market but how they can contribute to the material, social, and environmental health of our planet and each other. We need to communicate and work together to make these goals achievable.

    Rob Atkinson

    Senior Project Manager

    With over 25 years of design experience, over 15 of which have been in leadership roles, Rob Atkinson simultaneously occupies the roles of Lead Designer, Senior Project Manager, and Sustainability Consultant across a broad range of industry sectors. These include a specific focus on workplace, financial, infrastructure, and life sciences projects. He collaborates with senior stakeholders and leads creative and technical teams globally across Europe, the Middle East, and Africa.

    Interested in Sustainable mATERIALS?

    Then you might be interested in our whitepaper on Timber Towers, discussing the new generation of mass-timber buildings that are sparking complex design challenges—and innovative solutions.

    IA's Robert Atkinson discusses next steps in how we must develop the Circular Economy in AEC— via @iaarchitects

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