The circular economy – paving the way to carbon zero asset management strategies

The London’s Assembly new ‘London Plan’ (in its final stages of development) requires organisations to produce circular economy statements for their future developments. The implementation of effective waste and resource management will be vital for organisations’ long-term sustainability plans. Whilst there is new legislation requiring new builds to implement energy efficient and carbon zero measures, the benefits of circular economic principles in the ‘in use’ stage of the development cycle is yet to garner enough consideration. If asset management strategies do not acknowledge the benefits of optimising resources, then the benefits of carefully thought out design and construction stages are wasted.

Based on the notion that there needs to be a transition from the traditional ‘take-make-waste’ economy, a circular economy aims to improve economic opportunities whilst reducing society’s dependence on finite resources and energy. Underpinned by a shift towards renewable energy, a circular economy is based on three principles:

  1. Design out waste and pollution
  2. Keep products and materials in use
  3. Regenerate natural systems
A close up of a sign

Description automatically generated

(Source: Ellen MacArthur Foundation)

Under this model, the technical and biological cycles of resources are separated. Biologically based materials are designed to regenerate and replenish living systems, whilst technical cycles reuse and loop the technical components through recycling and removing waste.

Currently only 9% of the minerals, fossil fuels, metals and biomass that go into the global economy are circular (Circle Economy, 2019). And the construction sector contributed more than a third of the global resource consumption (3Space, Barclays Hatch). So, is there a case to be made to embed the principles of the circular economy into the housing development life cycle?

The benefits of introducing a circular economy path into the development environment include reducing the need for new construction, reduced operational and construction costs, improving land use, and increasing the efficiency of resources, all whilst boosting the local economy. Organisations across the sector are starting to realise the potential benefits of circular economy principles. For example, in 2019, Accord Housing Association became the first housing association to build plastic-free homes by minimising the use of plastic during construction and finding plastic-alternatives for fitting windows, bathrooms and kitchens.

There is a strong focus across the sector for new builds to meet energy efficiency and carbon neutral requirements, but the operational and maintenance efficiency of buildings when ‘in use’ is as crucial as the design of the building itself. Efficient asset management is not only complementary to the low carbon design benefits, but also ensures that these assets are maximised, increasing the life span of a housing development.  If 9 out of 10 homes in the EU will still exist by 2050 (Arup, The Circular economy in the built environment (2016)), embedding circular economic principles into asset management is as important as the design and construction of new builds. Ensuring they are equally prioritised will provide a foundation for future-proofing organisations against environmental and financial burdens of climate change.

Examples of applying circular economic principles into asset management include:

  • Retrofitting buildings to operate more efficiently. Retrofitting is more efficient than building new homes.
  • Using energy management tools, such as smart meters and connected devices, smart thermostats and lighting controls, to optimise energy performance and water usage.
  • Reducing water consumption and instead prioritising water reuse and recirculation.
  • Transitioning buildings from consumers to producers of energy through renewable energy sources.
  • Repurposing buildings for alternative uses. For example, redundant office and retail space being converted into housing. For example, Haringey Council have a mini programme of retail to residential schemes, converting vacant shop units into affordable homes.
  • Procuring tenders that achieve economies of scale and cost reductions and apply circular economic principles.   

The advantages of correctly managing the waste and resource usage of assets goes far beyond positive environmental implications.  If fully realised, it will make it hard for housing providers to want to ignore this approach. The benefits to applying circular economics into your asset management can be categorised into:  

Ultimately, applying circular economic principles to asset management strategies is not just a simple carbon reduction benefit, but a mechanism to help ensure the benefits of low carbon design can be realised in the long term. Equal attention must be paid to the ‘in use’ stage of a new home and the early development stages to maximise the material and wastage efficiency of the building. Circular economic principles provide a future-proof, long-lasting, and widely beneficial standard for asset management strategies to abide by and ultimately provide the foundation for long-term energy efficiency plans. 

Written by Will Morley, Junior Consultant, Altair Ltd