Last year was a watershed year for government-led sustainability initiatives in the UK. In the days leading to and after COP26 in Glasgow, the Government has rolled out plans and legislation that will affect how building companies operate and manage their environmental impact.

Sustainable construction is by no means a recent development. But certain environmental updates are poised to significantly impact construction companies over the next few years. These updates include:

1. Government Unveils Net Zero Strategy

In October 2021, the Government finally unveiled the Net Zero Strategy: Build Back Greener — a long-awaited plan outlining how the UK will deliver on its pledge to achieve net-zero emissions by 2050. Some of the measures in the strategy include:

  • Allocating £350 million to electrify UK vehicles and their supply chains
  • Allocating £620 million for electric vehicle (EV) grants and infrastructure
  • Allocating £500 million for the development of green technologies designed to help decarbonise industries, homes, land and power generation
  • Allocating £3.9 billion to decarbonise heat and buildings, including £450 million for the three-year Boiler Upgrade Scheme.

2. Government Supply Chains Now Bound By Net Zero Targets

Beginning 1st October 2021, companies bidding for government contractors with a value of over £5 million a year are now required to take concrete steps to achieve net-zero emissions by 2050. This means that companies in government supply chains will have to balance between their carbon emissions and those taken out of the atmosphere — also known as being carbon neutral.

The new rules, outlined in Public Policy Note 06/21, will require in-scope companies to create a carbon reduction plan detailing the source of their carbon emissions and how they plan to reduce them. While these requirements currently apply to government suppliers/contractors, they could soon be integrated into prequalification schemes like the Common Assessment Standard.

3. The Environment Act 2021 Is Here

The Environment Act 2021 provides an official post-Brexit framework for environmental sustainability and sets legally-binding targets for reducing air pollution and improving water quality, biodiversity and waste management.

The new law will have serious repercussions for the construction industry; in 2018, construction, excavation and demolition activities accounted for 62% of the UK’s waste output in 2018. Construction companies can demonstrate their commitment to tougher environmental standards through schemes such as the Common Assessment Standard, which includes sustainability as one of 13 areas of risk management.

4. Corporate Climate Disclosures Could Soon Be Mandatory

The UK is becoming the first G20 country to make corporate climate disclosures mandatory for the country’s largest businesses. New legislation, subject to Parliamentary approval, will require large trade companies, financial institutions and private enterprises with over 500 employees and £500 million in turnover to report climate-related risks and opportunities.

It’s a move designed to increase the quantity and quality of climate-related reports in Britain’s business community, ensuring that organisations weigh the risks and opportunities they face due to climate change. The new rules will encourage businesses to roll out climate reduction plans and seek sustainability credentials.

5. SMEs Urged to Begin Their Net Zero Journey

Whilst much of the conversation around business sustainability is focused on large companies, small and medium-sized enterprises (SMEs) are also encouraged to begin their net-zero journeys through the SME Climate Hub’s Climate Pledge.

SMEs that make the pledge commit to:

  • Reducing their greenhouse gas emissions by 50% before 2030
  • Achieving net-zero emissions by 2050
  • Disclosing their carbon emissions reduction progress annually.

SMEs play a vital role in the UK’s economic engine, accounting for 99% of the business population. However, only 10% of these businesses measure their carbon emissions.

Rachel Sterry