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29 April 2024

Exploring emerging trends in sustainable construction cost management practices

Given the stark reality of climate change, there's an urgent need to expedite the adoption of environmentally friendly construction solutions across industry. For construction firms, integrating sustainability into cost management strategies isn't just advisable; it's imperative for both the industry and society's long-term viability.  

As we witness a global shift towards greener and more sustainable building practices, companies must embrace cost control strategies that not only minimise environmental impact, but also optimise their use of their financial resources. 

Below, Conrad Gorny, Associate Director, and Danielle Hurley, ESG Program Lead, shed light on some of key trends shaping sustainable construction cost management practices.

The transition to green construction solutions 

By carefully considering the life cycle costs of materials, design choices, operational efficiency measures and maintenance practices, construction companies can achieve a balance between environmental responsibility and cost-effectiveness. Climate change, as an immediate and topical reality, underscores the urgent need for transitioning to greener building solutions. Integrating cost management into sustainability initiatives ensures that environmental objectives are met effectively. 

Client expectations and sustainable practices 

There has been a considerable shift in client expectations regarding sustainability; certifications like LEED, Green Star, BREEAM, and WELL, once optional, are now essential. This heightened awareness of the negative impacts of traditional materials like concrete has fueled interest in sustainable alternatives. For instance, swapping to full wood construction represents a direct material substitution, whereas initiatives like recycling demolition waste advance the concept of a circular material economy. By embracing sustainable practices and managing resources strategically, construction companies can contribute to environmental stewardship and ensure long-term success. 

A shared commitment to environmental responsibility  

Recognising that sustainability is a shared commitment is fundamental in today's landscape. The focus extends beyond short-term gains, aiming for the long-term health of our planet, which is in the collective interest. Across industries, there is a trend of adopting new technologies and refining methodologies to ensure that practices meet global sustainability standards. Biodiversity and nature-based solutions are increasingly recognised as long-term, value-driven approaches, evident in communications from various stakeholders and standards- boards like the GRI (Global Reporting Initiative).  

Additionally, there is a growing emphasis on including environmental justice criteria in the implementation of emissions reduction solutions, ensuring that human rights are upheld in the pursuit of sustainability goals.  

Effective communication for engagement  

Effective communication is vital. Studies show that people often choose information sources based on visual appeal rather than accuracy. In an era of misinformation, especially regarding climate change, it is crucial to present clear, accessible information that drives understanding and action.  

Cost benchmarking and carbon efficiency 

Effective cost management enables informed decision-making through comparative cost benchmarking, establishing a carbon price baseline that is fundamental for defining business cases, and optimising both costs and carbon footprints. This benchmarking acts as a key enabler for project definition, budget establishment, and ensures a return-on-investment for net zero prioritisation. 

Optimising life cycle costs and value 

The long-term value and carbon impact of assets are assessed through life cycle costing, considering all phases from capital expenditure to the end of life. Value management workshops aid in understanding and integrating overarching net zero objectives into construction programs, enhancing collaboration, and driving sustainable innovations. 

The evolution of global practices and standards 

The integration of cost management with net-zero policies is underscored by the adoption of the International Cost Management Standard (ICMS) 3, which establishes a global framework for benchmarking and reporting on both cost and carbon impacts. This standard enhances transparency and promotes the net zero carbon capabilities in capital works programs, highlighting the significant role that construction plays in tackling global carbon emissions. 

Procurement strategies for net-zero objectives 

Aligning procurement strategies with net -zero objectives ensure cost-effective outcomes and fosters innovation in the supply chain. Robust cost controls and performance indicators are essential for achieving net zero targets effectively. 

Factoring in performance-based sustainability targets in contracts can drive suppliers and contractors to focus on positive outcomes. Examples such as an increase in energy efficiency, waste reduction metrics, water conservation measures or low-impact transportation can all ensure accountability and encourage sustainable practices. 

Translating sustainability goals into action 

Our role as construction cost managers is critical in translating our clients' sustainability ambitions into actionable plans on construction sites. While our primary focus is typically on cost reduction, our responsibilities extend to improving the efficiency of capital expenditures for emission reduction initiatives as well. Supplier engagement presents a significant challenge particularly in the context of meeting emission reduction goals relating to construction projects.  

By gaining a deep understanding of our clients' ambitions, we can effectively translate these aspirations into practical steps and establish clear accountability measures for construction site teams. This collaborative approach ensures that sustainability goals are articulated and implemented effectively throughout the project life cycle, from inception to completion. 


As we navigate through the complexities of sustainable construction and environmental stewardship, it is clear that integrating robust cost management strategies is not just beneficial but essential. The construction industry must continue to adapt and innovate, ensuring that every step from material selection to final construction practices not only meets the current sustainability standards but also sets a precedent for future developments.  

By proactively adopting these practices, construction firms not only enhance their operational efficiency and meet client expectations but also contribute significantly to the global fight against climate change. This ongoing evolution in construction cost management underscores our collective commitment to building a sustainable future, one project at a time. 


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