Sustainability Trends Drive Change in the Housing Industry
With more than 9 billion people expected on our increasingly resource-scarce planet by 2050, meeting the global challenges of more people and dwindling resources are the key issues facing home builders today. Adding to this situation is a dramatic rise of new middle classes in countries across the world, all demanding higher standards of living, including air-conditioned houses and cars, computers and other technologies, all of which require energy.
Rapid urbanization is also driving change. It is estimated that every week a new city of 1.5 million people will have to be built over the coming decades to meet this demand, and that by 2030, 70 percent of the world’s population will live in mega-cities.
If we are to meet these growing demands, we must redouble efforts to the challenges this presents for the housing industry.
In the developed world, the process of retrofitting to upgrade and improve resource efficiency in the housing sector is very important. Better insulation, greater use of renewable energy and more efficient recycling systems will need to become industry standards.
But perhaps the greatest challenge — and opportunity — lies in new housing, with the majority of that to be constructed in emerging economies. For instance, in China, the government wants to facilitate the expansion of Beijing’s population from 20 million to 40 million people while maintaining the same environmental footprint. Sustainability is a critical part of this plan not because the government officials are environmental activists, but because they have no other option. Beijing simply will not be habitable in the future unless sustainability is prioritized. This plan will largely be achieved through new legislation and tightened regulations. Successful home builders in Beijing will need to build houses that are much more energy efficient, use more renewable materials and have access to renewable energy.
Across the globe, environmental legislation is increasing and this is impacting the housing sector. In the EU, the European Climate Change Programme has set 2020 targets of a 20 percent reduction in greenhouse gas emissions from 1990 levels, a commitment that is being implemented through binding legislation. At the same time, the EU Emissions Trading Scheme caps carbon dioxide emissions, simultaneously creating a huge trading market for carbon allowances.
Standards such as the BRE Environmental Assessment Method (BREEAM) measurement rating system for green buildings in the UK, LEED in North America, Green Star in Australia and HQE in France are also helping to drive significant changes in the housing sector.
As home builders grapple with the demands placed on them to develop more sustainable housing, they will increasingly look to their suppliers to help them meet this challenge. Companies serving the housing industry will have many opportunities to help accelerate sustainability. If the housing sector is to become energy and carbon neutral with full recyclability of raw materials, then we need to produce insulation, wood protection, heat reflective materials and other solutions to do this.
Over time, home builders will come to rely on fewer suppliers who are able to make a significant overall contribution to the environmental performance of a building. We think that different suppliers who can work together in partnership have the potential to provide a very powerful proposition, delivering a significant proportion of a home’s sustainability criteria. And suppliers who are proactive and bundle their products together will be more prepared to help those companies they supply reap the rewards.
Suppliers must also ensure their own “house is in order” by becoming much more energy and resource efficient in their own operations. This must happen across the whole value chain, from their suppliers through to their operations and processes. They must become much less dependent on fossil fuel based energy and the non-renewable raw materials used in products. Today, 33 percent of our energy comes from renewable sources (hydropower, solar, wind and biomass). The aim is to increase this to 45 percent over the next decade. Already, 10 percent of the raw materials we use come from renewable sources; we want to increase that share in order to be less dependent.
For us, increasing our own operational efficiency is vital and we have a dedicated eco-efficiency program designed to significantly improve our performance in this area. Over the past 10 years, we have worked hard to improve our business’ energy and resource efficiency, examining everything from operating processes to compliance issues. We also recognize the need to accelerate our commitment to address the key mega trends our customers in the housing sector are experiencing.
Chemical and coatings suppliers within the housing industry must aim to create more value from fewer resources. None of this can be achieved without working in partnership with suppliers, customers and other business partners. But ultimately by collaborating effectively across the whole value chain, companies can accelerate the path toward becoming truly resource and energy efficient.
André Veneman is corporate director of Sustainability for AkzoNobel.
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