Construction Materials Circularity the key to Sustainability

The construction industry has long been a significant contributor to global waste and resource depletion. But construction leaders are increasingly looking to building materials circularity in response to these challenges, a move driven by environmental concerns, regulatory pressures and innovative technologies.

It is becoming a strategically important area for construction.

For example, at the 2024 World Economic Forum annual meeting, McKinsey, the leading global management consulting firm, hosted a discussion on "Transitioning from trials to triumphs in building materials circularity." Three key themes emerged:

• Opportunities for environmental impact and business case for circularity in construction.
• The critical importance of value chain integration and digitalisation
• The urgency to scale and invest in new circular business models

What is building materials circularity?

Building material circularity in construction involves designing, using, and reusing materials to minimise waste and maximise value throughout a building's life cycle. 

According to the United Nations Environment Programme, material circularity in construction accounts for about 40% of global resource use. 

Iron and steel are considered the world's most recycled materials, as they can be separated magnetically from the waste stream.

By embracing circularity, companies can reduce costs, conserve resources and lower carbon emissions.

The circular model contrasts with the traditional linear 'take-make-dispose' approach. 

It emphasises strategies like designing for disassembly, using recycled materials and repurposing components. 

For instance, in the Netherlands, Madaster's, the online registry for materials and products, has a 'material passport' system that tracks building materials for future reuse. 

Meanwhile, in Japan, Kajima Corporation, the design-builder and real estate developer, has developed a method to dismantle high-rises floor-by-floor for material recovery.

McKinsey's insights on circularity

McKinsey, in collaboration with the World Economic Forum, has also identified three "Circularity Lighthouse" solutions demonstrating the potential of circular practices in construction:

1. An end-to-end circularity solution for digital automation and building energy management
2. A global recycling platform for construction and demolition materials
3. A circular supply chain for carpet tile production

According to McKinsey, there is a revenue opportunity of more than US$1tn in Europe alone by 2050 through circular business models. 

These include increased recovery of materials, improved efficiencies in waste reduction and turning residual waste into valuable feedstocks and energy.

McKinsey emphasises that scaling circularity requires investments in green opportunities and new business models. 

Companies can expand their core business, integrate horizontally or vertically, or build entirely new businesses focused on circularity.

Industry leaders embracing circularity

Several global construction companies are leading the way in adopting circular practices.

Skanska
​​​​​​​Skanska, the Swedish multinational, has implemented a "Circular Economy Business Model" across its operations, focusing on reducing waste, increasing the use of recycled materials and designing buildings for easy disassembly and material recovery.

AECOM
Similarly, AECOM, the US-based infrastructure consulting firm has developed a "Sustainable Legacies" strategy, embedding circular economy principles in its projects. 

The company is working on innovative solutions like using recycled plastic in road construction and developing 3D printing techniques to minimise waste.

LafargeHolcim
LafargeHolcim, meanwhile, the global leader in building materials, has developed circular products, including ECOPact low-carbon concrete, which incorporates recycled materials.

Challenges and opportunities of building material circularity

Despite progress, challenges persist, including lack of standardisation, limited recycling infrastructure and the need for new skills and processes. 

The World Economic Forum notes that only 8.6% of the global economy is currently circular.

However, the potential benefits are significant. 

The Ellen MacArthur Foundation estimates that circular economy strategies could save up to US$3.7tn annually by 2030. 

McKinsey suggests that applying circular economy principles could generate annual benefits of US$1.8tnfor Europe's economy by 2030.

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