Based on the recent Intergovernmental Panel on Climate Change (IPCC) report, enterprise commitments (exhibit 1), and investor-driven sustainability requirements, it’s obvious that there are minimal, if any, businesses not affected by the implications of sustainability.
The construction and building product industries are hot spots in terms of multiple dimensions of impact, most notably, carbon emissions (both embodied and operational).
The industry is responding with a movement towards building product transparency, measurement, and disclosure. Why? Multiple reasons: lower cost of capital via sustainability bonds, a move to cater to gen X and millennials seeking cleaner lifestyles with increased rents, improving asset values, and reducing the risk of building obsolescence (being left behind from this transformation).
“The IPCC report got a lot of attention in the commercial construction industry. Customers are aligning their sustainability programs to try and respond and that will mean construction project teams have a lot of information to gather on materials. Ten years ago, I remember project team members nearly in tears trying to track down this information. Thankfully, the process is easier today, but to truly meet demand for lower carbon, sustainable buildings, we need efficient tools to gather this info.” - Jay Weisberger, Communications Leader at DPR Construction
Several different approaches and structures for rating the sustainability of buildings are being used today:
- Most large institutional builders are using building rating programs such as LEED, Living Challenge, Energy Star, and WELL.
- Many innovative builders use the programs listed above and some organizations have even developed their own recipe for sustainability to support their enterprise strategy.
- The federal government is starting to require compliance reporting with its comprehensive Green Procurement Compilation
All of these efforts can be thought of as recipes that require unbiased, science-based product attributes for the ingredients. The ingredients are delivered through an array of 3rd party, product-level testing labs, certifiers, and trade organizations.
We can proxy the growth in building products sustainability by observing the growth in product-certifications and eco-labels. According to our database, Building Product Manufacturer (BPM)-certifications have grown at 19% CAGR since 2018 (see exhibit 2)
Seven transparency documents, including Environmental Product Declarations (EPDs) in our system, have increased more than 50% in the last two years, chalking up an impressive 35% compounded annual growth rate (CAGR). That’s a pretty significant uptick in transparency surrounding building materials.
"With an influx of data elements to the market, there’s an added complexity of organizing information in an accessible way. In other words, just because the documents or certifications are out there, doesn’t mean you can easily find them. With the wave of digitization we are seeing throughout construction processes, having this information accessible online is more important than ever." - Ryan Poole, Global Sustainability Leader at DPR Construction
As we reflect on the growth of certifications, it is important to look to the future. Most of the Building Products Manufacturers that we talk to are rapidly certifying more of their products. The goal is to meet the current demand of builders while anticipating growth in requirements. We believe streamlining the process of product transparency will positively shift the supply and demand of this information. The building product market can become a virtuous engine fueled by capitalism while being aligned with sustainability.
There is no doubt that many of our buildings have gotten smarter, greener and more efficient. But one thing can be certain, there is a growing demand for healthier and more sustainable materials and there is plenty of room for improvement.
Want to check out some of these Certifications and Ecolabels? Head to The ecomedes Product Platform today!