Implementing circular economy in construction and real estate business

Many actors in the real estate and construction industry have made strategic policies towards a circular economy in renovation sites and new construction projects, as well as in property maintenance. But how to implement circular economy in companies’ business processes and contracts across the board?

Many actors in the real estate and construction industry have made strategic policies towards a circular economy in renovation sites and new construction projects, as well as in property maintenance. The principles aim to steer construction and property maintenance more and more towards resource-wisdom and energy efficiency as well as low-carbon and sustainable solutions across the industry.

In addition to energy efficiency and low-emission solutions, the issue in construction is, of course, centrally in the emphasis on recycled materials in material choices, but the promotion of a circular economy is also about considering demolition already at the construction stage. Solutions that support resource-wise demolition, already in the design of the building, enable the most efficient reuse of materials and the genuine circulation of raw materials.

Sustainability of a building can mean, for example, energy and resource wisdom throughout the life cycle of the building, efficient and adaptable space planning as well as emphasis on recycling solutions, ecology and sustainability in all tenders regarding the building and in all real estate contracts. A concrete way to make the solutions visible is to obtain an environmental certificate for the building.

However, it is not always clear how the company's circular economy and sustainability policies could be successfully implemented in the company's business contracts and, for example, in tenders.

From the customer's point of view, the circular economy can be put into practice in construction projects, e.g. by requiring and genuinely taking recycled materials into account in works tenders so that the use of recycled materials can be included in contract calculation. In this way, the benefits of recycled materials do not remain invisible or as occasional benefit as a by-product of the contract. For the principles of the circular economy to be implemented in projects, the requirements for them must be implemented as far as possible, e.g. throughout the supply chain.

In addition to the measures taken by the property owner, the implementation of energy and resource wisdom also requires the commitment of the tenant and the service provider partners to the set goals. This is possible by developing contract processes and contract content in order to take energy and eco-efficiency into account. For example, in leases and property maintenance agreements, it is possible to include elements that encourage - or compel - energy efficiency and the reuse of materials.

The circular economy in the real estate business is an important part of responsibility of the business, which is being monitored more and more closely by investors, partly through the guidance and regulation of the financial sector from the EU, but also as users become more aware of responsibility.

Experts of Fondia specializing in circular economy and real estate business are happy to help you to build right solutions. Get to know our construction and real estate experts better or contact them directly!