Sustainable cities: Building for the future

29 September 2023

By Maya Tabaqchali, Sustainable Portfolio Manager

Please note: This article is designed to be thought leadership content to offer big picture views and analysis of interesting issues and trends that matter to our clients and the world in which we live. It is not designed to be taken as expert advice, investment advice or a recommendation and any reference to specific companies is therefore not an opinion as to their present or future value or broader ESG credentials. Reliance upon any of the information in this article is at the sole discretion of the reader. Some of the views and issues discussed in this article may derive from third-party research or data which is relied upon by Barclays Private Bank and may not have been validated. Such research and data are made available as additional information for the reader where appropriate.

By 2050, the cities of the world are expected to be home to more than two-thirds of the world’s population1and produce 85% of global economic output2. Although they occupy around only 2% of total land, cities are responsible for over 60% of energy consumption, 70% of greenhouse gas emissions and 70% of global waste3.

With continued population growth (the UN expects the global population to reach 9.7 billion by the middle of the century4)  and rapid urbanisation (by one estimate, the planet will add floor space the size of New York City every month until 20605), the resource-intensity of cities is only likely to increase. According to a 2018 report, by 2050, cities are expected to consume 90 billion tons of raw materials, such as sand, gravel, iron ore, coal and wood every year – further depleting finite resources and causing the destruction of natural habitats, green spaces and biodiversity loss6.

Despite the great need for increased infrastructure, the productivity of the construction industry has consistently lagged other sectors, and has changed very little over the last 50 years7. The industry is ripe for a re-imagining – one that places sustainable materials and technologies at its core to build a future that we all want to live in. 

Source: Office for National Statistics, 2021

Note: Multi-Factor Productivity is the unexplained growth in output after accounting for growth in capital and labour inputs.

There are two key ways in which the construction industry can start to address these challenges: 1) through using more sustainable building materials, and 2) by harnessing technology to improve efficiencies through the process – as we discuss in more below. 

Reducing concrete’s colossal carbon footprint

More than 4.1 billion tons of cement are produced every year, making it the most produced material on earth8. Concrete, derived from cement, is one of the world’s most used substances, coming second only to water9. Cement is locally available, cheap and an effective composite material when combined with steel and other highly durable materials, making it an ideal building material for urban construction10.

The majority of the demand for the material comes from emerging economies11, which is a reflection of rising living standards – a positive development. However, this high volume of production comes at an enormous cost to the planet; the global cement industry is one of the largest producers of CO2, more than tripling its own output since 199212. If it were a country, the concrete industry would be the third-highest emitter of CO2 after China and the US13. This trend cannot continue. 

Much of these emissions come from the creation of clinker – a key input into conventional cement and concrete, and so recent innovation efforts have focused on this area. Clinker is made by heating limestone and clay at high temperatures (>1500C) in a rotating kiln14. The heating process is very energy-intensive and also releases C02 embedded in the limestone. 

Cementing new technologies

However, new techniques for producing cement are being developed. For example, replacing some of the limestone with sustainable additives can reduce the clinker content by 50% and make it possible to use lower temperatures throughout the process15. This results in a 30% reduction in CO2 emissions compared to conventional cement – and could save up to 400 million tonnes of CO2 per year by 205016

This more sustainably produced cement performs similarly to traditional cement in most respects, but has proven to be even more resistant to chloride and alkali, which helps prevent “concrete cancer”, a form of building corrosion that occurs when the steel inside concrete begins to rust17. The novel concrete is also 25% cheaper to manufacture than traditional concrete as a result of the lower energy demand18

Bringing construction into the digital age

The digital revolution that has changed the face of almost every traditional physical industry also needs to be adopted by the construction industry – to help address the dual issues of low productivity and high carbon intensity. Although the sector today remains one of the least digitised industries19 – with alarming ramifications for the natural environment, contributing to 23% of air pollution, 40% of drinking water pollution and 50% of landfill waste20 – the foundations of a sustainable and circular construction industry are being created using technological innovation. 

Digital twin technology is one such tool being suggested by climate experts as an enabler of radical action for stakeholders designing sustainable cities of the future21. Simply, a digital twin is a virtual model of a physical object. Using advanced IT tools, including digital identification and automated perception, an actual or planned physical building can be created in the digital space22. This can then be used for holographic simulation, dynamic monitoring, or real-time diagnosis of the state of a real-life physical entity23

Cutting emissions and boosting efficiencies 

Digital twin technology can be used across the lifecycle of infrastructure projects to help streamline operations, gain insights through artificial intelligence and machine learning, reduce waste, meet sustainability goals and plan for the future using simulations24. It can be used to examine real-time data and provide alerts when an asset is losing energy – through uninsulated roofs for example – and then suggest insights to the asset owner on how to optimise the building and reduce inefficiencies25

The World Economic Forum estimates that using digital twin technology in the design of a virtual power plant for example, can reduce CO2 emissions by 630 tons per year26. It also creates a significant opportunity for the construction industry to address its productivity problem. By using data to predict when issues will arise, it may be possible to tackle them before they occur, or when they are still small, thereby potentially preventing downtime and reducing costs27

Using it alongside other emerging technologies, including 3D printing, robotics, modularisation and prefabrication, could offer the industry lower costs, better quality control, less labour intensity and a chance to integrate complex sustainability solutions in building the future28. 3D printing, for example, can be more energy-efficient than conventional manufacturing (although not always)29. It also lends itself well to a reduced waste model, whereby specific parts can be custom-made versus needing to be ordered in bulk (although recyclability does vary depending on the product used in the 3D printing process)30

That said, there still are challenges to overcome to maximise the potential for digital twin technology. For example, it relies on real-time updates and accurate data to work effectively, and requires supporting infrastructure to integrate it into existing systems and processes31. In addition, there are implementation costs and the issue of data security to navigate32. And while the growth outlook for virtual twins looks promising – with the market set to grow at a compound annual rate of 36% over the next five years – the current adoption rate is just 10% globally33.

The future of construction

Every single construction action – from the materials we choose or the technologies we use, to the way we operate and interact with the built environment – has an impact on the natural environment.  If we are to meet the construction challenges of the next century, using sustainable materials and digital adoption within the construction industry will be paramount.  

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