Risk perception around a secondary materials market needs to be addressed, says the council

Pivoting from a linear to a circular economic system is vital for the UK’s transition to net zero and, working alongside construction firms, the insurance industry has a vital role to play in this.

stormy weather sign

Read: ‘There is real value in insurers helping people get ahead’ of climate change-related risks – Aviva’s Adam Winslow

Read: Zurich teams up with South Pole to support clients’ net zero goals

Not subscribed? Become a subscriber and access our premium content

Explore more sustainability-related content here and discover other news stories here 

This is according to new insight from the UK Green Building Council (UKGBC), published today (31 January 2023).

Kai Liebetanz, senior advisor at UKGBC, said that the UK’s current linear economy – where a “take-make-dispose approach to construction is common practice” – is “accelerating the climate and biodiversity crisis and actively contributing to higher emissions, unsustainable levels of resource use and unnecessary levels of waste”.

A linear economy is a traditional model where profit is prioritised over sustainability and raw materials are used to create products that consumers later discard, with no concern for ecological consequences.

A circular economy, on the other hand, follows three principles – reduce, reuse, recycle – and aims to keep energy consumption to a minimum by using non-polluting raw materials and renewable sources.

Call to action

The UKGBC’s report – entitled System enablers for a circular economy – has identified several specific areas where UK insurance firms can support a circular economy:

  • Greater collaboration and early engagement between industry stakeholders.
  • Scaling up green finance to stimulate business support for a circular economy.
  • Educating practitioners and decisionmakers with the necessary knowledge to be able to implement circular economy more widely across construction.

Read: Insurers’ capital outlook darkened by increasing climate risk – GlobalData

Read: Renewable energy risk managers face choppy waters in 2023 – WTW

Explore more sustainability-related content here and discover other news stories here 

One area of understanding the council believes needs to be improved concerns the due diligence process to re-test, re-fabricate and re-warrant construction products and materials, to reduce risk perception around a secondary materials market in the UK.

Alongside the insurance industry, UKGBC acknowledged that a successful economic shift will require efforts from all levels of government, industry and civil society.

 

Topics