Pavelko: There’s a reason we talk about “building the future.” The construction sector is essential to progress and itself is adopting more sustainable methods and materials to do work that’s crucial to our economy and our future. Sustainability challenges and carbon emissions associated with construction are top of mind throughout the industry as well as at the highest levels of government. The General Services Administration, in collaboration with the Department of Energy, recently launched a pilot program with $30 million in funding from the Inflation Reduction Act to study 20 new construction technologies aimed at accelerating the transition to net-zero federal buildings.² Should these technologies prove successful, we expect adoption in the private sector as well.

Edsey: As industry and government look to increase sustainability, they are concerned with two main types of emissions in the built environment: Those generated in operating a building, often referred to as operational carbon emissions; and those generated during construction and in the sourcing and production of building materials — such as concrete and steel — described as embodied carbon emissions. As much as 11% of global annual emissions come from embodied carbon alone,³ so embodied emissions are a really important consideration for construction if we want to collaborate to reduce the negative impacts of climate change.

Pavelko: Progress on net zero is already a bottom-line issue for builders and owners. Whether the driving force is contractual requirements from upstream parties or their company’s own ESG targets as Patrick mentioned, contractors are increasingly striving to use a certain type or percentage of environmentally friendly materials or methods in their projects.

Edsey: Trade organizations also are influencing this. The American Institute of Architects (AIA) has made a low-carbon materials pledge in which participating firms pledge to prefer products that reduce carbon emissions and ultimately sequester more carbon than emitted. Zurich is collaborating with nonprofit organizations that are committed to the research and deployment of low-carbon building materials, and which offer their services free of charge. There’s some real momentum.

Pavelko: Materials like steel and concrete are among the most widely used materials in construction and are leading sources of embodied carbon.⁵ It’s one reason we at Zurich are proud to provide industry-leading insurance capacity for mass timber, a material that can eliminate or reduce the amount of concrete and steel required for the foundation of a structure. Mass timber offers some other sustainability advantages; for one, wood is a renewable resource. Manufacturing mass timber emits less carbon in comparison to concrete and steel, and mass timber is lighter weight, which is why it can reduce foundation requirements. However, some insurance carriers are reluctant to cover it, considering it in the same fire risk category as light wood frame construction. After studying the material, its performance and the impact it can have on our planet, Zurich decided that we would offer unprecedented capacity for its use. Clearly this was something that was missing in the market, because the launch has been very successful, and the market is asking for even more capacity.

McBride: Another way Zurich is supporting these efforts is with parametric solutions, including our Construction Weather Parametric product that directly addresses weather-related delays that impact work schedules even when there is no actual physical loss or damage. Claims payments are based on predetermined weather events occurring in the project’s location, such as rain, wind, snow or temperatures (heat or cold). Any of these weather conditions can cause significant and costly project delays, The parametric solution closes this gap and helps the customer mitigate the negative impact of unanticipated weather delays.

McBride: Reducing operational carbon is a bit less complex and has been happening for a while. Installing energy-efficient windows, LED lighting and better insulation, for example, immediately improves energy efficiency, which can quickly make the investment pay off. Reducing embodied carbon requires a longer-term mindset. It will likely cost more to construct a low embodied-carbon building right now than a conventional building, though recent case studies have found that embodied carbon reductions of 19% to 46% could be achieved at cost premiums of less than 1%.⁸

Edsey: The perceived incremental cost has an impact on uptake. If building codes don’t specifically address embodied carbon, that will likely slow widespread adoption of construction design methods to lower embodied carbon. We’re not likely to see widespread adoption until the price of low-carbon building materials is less than or equal to carbon-intensive materials or public policies are instituted to incentivize the use of low-carbon materials.

Pavelko: If a builder is wanting to prioritize sustainable methods or materials, we recommend starting conversations with project stakeholders earlier than normal. Engage our Risk Engineers from Zurich Resilience Solutions to help you understand the natural catastrophe hazards that can affect your projects today and in the future. They can show you climate change models and share how we expect a jobsite to fare in the future. They can identify other opportunities to improve the risk for the long term, such as installing water damage mitigation technology during construction and keeping it in place during operation to address any little leaks before they become big leaks.

McBride: They can also offer insight on material selection, ensuring it’s appropriate for the climate it will be placed in. Talking to Risk Engineers at the design phase and taking some of these steps also can help your underwriter be comfortable with how you’re managing risks, especially if you plan to use a less conventional material or method. As with everything in risk management, communication and collaboration are key.