Construction set to make sustainability strides in 2022
The UK construction sector will make significant strides in tackling sustainability in 2022, as the market attempts to lower its carbon footprint in line with the Government 's wider climate change target.
Reducing carbon emissions is the area of business performance that construction leaders think will change the most in the next 12 months.
According to BDO 's Construction in 2022 and Beyond, 48 per cent of businesses surveyed as part of the annual report think their company 's carbon footprint will decrease in 2022. 66% of companies also have carbon neutral targets in place.
Last year, the Government set the world 's most ambitious climate change target to reduce emissions by 78 per cent by 2035 compared to 1990 levels.
Globally, the construction sector is responsible for 30 to 40 per cent of natural resource use and 30 per cent of greenhouse gas emissions.
Paul Fenner (pictured), partner and head of construction at BDO LLP, said: “While many large companies have already embedded environmental, social and governance (ESG) measures into their business, there is still a considerable way to go to ensure the entire sector is playing its part in meeting the UK 's ambitious climate change targets.
“With a raft of Government regulations aimed specifically at construction, such as requirements to have a carbon reduction plan in place for any public sector contract over £5 million, the direction of travel is clear.
“It 's promising to see that the wave of adoption and acknowledgement of ESG is gaining real momentum and viewed as one of the biggest areas of change when it comes to business performance in 2022.
“This is particularly clear in our latest Rethinking the Economy survey, which shows 60 per cent of real estate and construction companies have declined to work with clients because of their ESG credentials. ”
The Construction in 2022 and Beyond report also showed that optimism remains high in the sector, after a significant number of companies (47 per cent) performed better than expected last year.
According to the survey, 91 per cent of respondents feel positive about the prospects for construction in the UK - up from 87 per cent last year.
Three quarters of those surveyed also expected revenue to increase in 2022, with profitability (63 per cent), order books (63 per cent), headcount (61 per cent) and capital expenditure (50 per cent) also set to rise.
The latest official figures show that construction delivers £110 billion to the British economy and provides jobs for 10 per cent of the country 's workforce.
Overall, the construction sector output has grown by 1.1 per cent at February 2022 when compared to February 2020, pre-pandemic levels, largely off the back of a 25 per cent growth in Infrastructure.
The report has highlighted several long-standing concerns for the sector, such as the skills gap, supply chain resilience and ongoing materials price inflation.
Three quarters of respondents stated that recruitment was the biggest challenge facing the UK construction sector in 2022, with gaps in knowledge and training, an aging workforce and the supply of overseas workers also posing a problem.