Nick Smith, head of sustainability and regulation at Constructionline explains why this year could be the most transformative yet for the construction industry.
In a period of geopolitical and economic uncertainty, our industry continues to face a number of challenges. However, there are several standards and legislative developments expected in the UK this year that will redefine our industry for years to come – and which should have a positive, lasting impact in more ways than one.
In our 25 years of supporting organisations across the public and private sector, we have witnessed many changes. This year, there is an increased focus on environmental and social impact, meaning that businesses will need to zero in on their own performance, ensuring that standards are met, measured and reported accurately.
In particular, there are four key events to watch out for:
In February, the Procurement Act 2023 finally comes into effect
Slightly delayed due to the change in UK Government, the Act will change the landscape of public sector procurement, aiming to drive innovation, deliver better outcomes and embed transparency throughout the public procurement process.
The Act will make it a legal requirement for public sector buyers to move from awarding contracts based on M.E.A.T (Most Economically Advantageous Tender) to M.A.T (Most Advantageous Tender). In essence, bidders must illustrate how they will create more successful public sector projects, which:
- Better meet community needs
- Offer greater value for money
- Reduce environmental impact
- Provide a more level playing field for smaller businesses
The Act will also give contracting authorities more power to exclude suppliers should they not meet required standards and legal obligations such as health and safety, employment, equality and, more specifically to our industry, the Building Safety Act (BSA) 2022.
In essence, there are plenty of opportunities for contractors to do better business with public contracting authorities. The key to success lies in keeping up to speed with the latest requirements, ensuring that bid submissions aren’t simply following the same old policies.
The announcement of the UK Sustainable Reporting Standards (UK SRS) is expected in March 2025
A hot topic in the construction industry, the UK government is expected to endorse the UK SRS this year, with a phased implementation starting from early next year. Expected to align with the standards developed by the International Sustainability Standards Board (ISSB), the goal is to create a consistent benchmark for sustainability reporting.
Most, if not all, of the larger companies are already paying close attention to their environmental, social, and governance (ESG) performance, so these standards will come as no big surprise. The difference is that they will be mandated to disclose more detailed information about their environmental and social impact.
A lot of this data will come from the supply chain, meaning that smaller organisations will also be required to start measuring and reporting on their own ESG performance – if they aren’t already. The belief is that this ‘trickle down’ effect is what will ultimately lead to the UK gaining ground on the road to meeting its sustainability targets.
The precise criteria will be confirmed when the final standards are published. However, it is clear that this poses a potentially significant growth opportunity for smaller suppliers. Those who proactively embrace sustainable and responsible construction practices and can provide transparent reporting will gain a competitive advantage and attract new contracts.
By adopting these standards, the UK is also ensuring that we are aligned with global best practice, encouraging overseas investment, and reducing the reporting burden for organisations operating in multiple countries.
The Future Homes Standard (FHS) will become mandatory in 2025
The government’s 2021 heat and buildings strategy is committed to a Future Homes Standard by 2025, which will future-proof new-build homes by ensuring they produce 75-80% less carbon emissions.
This significant step requires a fabric-first approach that prioritises high levels of insulation, airtightness, and the use of low-carbon heating solutions such as heat pumps.
This means embracing new construction methods and materials that offer improved quality control and reduce waste. It will also mean upskilling the workforce in areas such as heat pump installation and energy-efficient construction practices.
Naturally, this will go hand in hand with the UK government’s ambitious housebuilding targets, creating new jobs, encouraging innovation and employing Modern Methods of Construction (MMC) – not to mention encouraging the development of higher quality, sustainable, FHS-compliant homes.
There have been no official announcements about when the FHS will become mandatory, but the general feeling is that we will know more when the Home Energy Model (HEM) is launched, most likely in May 2025. (The HEM is the tool that will be used to assess compliance with the FHS.)
We’re expecting version 1 of the Net Zero Carbon Building Standard (NZCBS) towards the end of the year
Piloted towards the back end of 2024, the NZCBS is a framework driven by the UK Green Building Council (UKGBC) intended to guide the construction and operation of buildings towards achieving net zero carbon emissions.
Applying to all new buildings and major renovations, the framework requires robust measurement and verification to ensure accountability and transparency, empowering the construction industry to take action and support our collective mission to reach net zero in time.
In the future, the NZCBS will apply to the entire life cycle of a building, from construction to operation and eventually to a low-impact demolition.
The idea behind this is to help our industry move towards a future that goes beyond simply reducing operational carbon (from heating, cooling, lighting, etc.) to encompass whole-life carbon emissions. This year will be about finding the projects that could become a blueprint for future net zero buildings.
There is also an expectation that this framework will become legally binding through changes to Building Regulations, so it is definitely one to watch this year.
We will feel the positive effects of these new developments over time
In a high turnover and low-margin industry such as ours, standardisation has been required to help the UK meet its climate goals. While the initial implementation will require adjustments and investment, the long-term benefits will be worthwhile.
As society evolves and the next generation takes the reins, these measures will contribute to building a stronger, more resilient, and environmentally conscious construction industry.
Extending far beyond simply reducing carbon emissions, they will reshape how we design, build, and operate buildings, fostering innovation and driving efficiency across the sector.
On a purely business level, the advantages are also far-reaching, providing the all-important competitive edge. Companies that proactively adopt sustainable practices and demonstrate a commitment to social responsibility will be better positioned to:
- Attract investment
- Win new contracts
- Recruit and retain the best talent
- Enhance brand reputation
- Drive innovation
