This piece is by Nick Turner, Head of Surveying, Woodgate & Clark.
As weather events continue to take their toll on residents and businesses, Nick Turner, Head of Surveying at Woodgate & Clark, one of the U.K.’s leading loss adjusters, examines how the insurance market could help square the circle of managing claims costs while also supporting sustainability by embracing the circular economy in property repairs.
In a series of articles, Nick will explain the circular economy in the context of the huge waste problem in construction, looking at specific building/repair materials and where insurance providers could support more sustainable decisions and actions by their building repair networks. Check out the full report at the Woodgate & Clark website here.
What a waste
DEFRA reports that Construction, demolition and excavation (CDE) is responsible for 59% of the UK’s waste – around 119 million tonnes. ~75% of construction waste could be but isn’t being recycled or repurposed due to the lack of integrated waste management frameworking.
Could the answer be the circular economy?
The fundamental point of a circular economy is to keep materials and products in use rather than just throwing away the old and replacing with new. In the insurance building claims sector, we should be considering repair wherever possible as the most sustainable option because a repair is an essential aspect of circular economy strategies to extend the life of products and materials used in
construction.
Of course, this is not always possible or practical where a building has been substantially destroyed by a peril such as fire. The cost of rebuilding instead of repair can, in some circumstances, be lower than the repair cost, especially for residential buildings where VAT is zero rated for new build (above ground floor slab).
Overcoming the cost barrier
Indeed, cost is currently the main driver when considering repair and rebuild options. The sector has seen material costs rise massively in the past four years but this has not closed the gap between conventional, linear economy materials and alternative, more sustainable products. Alternatives are being developed but are still more expensive and hard to source and will remain so until more investment is made.
Incentives to develop alternative materials will come from incentives for the buyers to buy sustainable materials. Currently, there are few, if any incentives to select alternative materials over standard, unsustainable materials.
This is even though sustainable materials often contribute to energy efficiency and lower operational costs over the lifetime of a building. Durability and low maintenance requirements can also result in long term cost savings. Materials like recycled metal or concrete tend to have longer lifespans, reducing the need for replacements or repairs.
The perceived high cost of recycling also depends on the material being recycled and a lot of the cost comes from separating the different materials, especially when taking them from a demolished building.
However, there is an increasing awareness of environmental issues, and with that comes a growing market demand for sustainable buildings and building methods. Choosing sustainable materials can enhance the market value of a property and attract environmentally conscious tenants or buyers.
As demand for sustainable materials increases and technology advances, prices of alternative materials are likely to become more competitive.
Without legislation, the hope is that as demand increases for recycled materials, innovative recycling methods will emerge, recycling will become easier and the cost of recycling will reduce. Legislation making waste disposal more difficult and expensive is likely to accelerate this progress to the point where separating waste is easier, resulting in more materials entering the circular economy.
Overall, recycling building materials offers insurers a practical and sustainable approach to managing claims costs, enhancing resilience, and aligning with environmental objectives. By integrating recycled content into building repairs, insurers can demonstrate leadership in sustainability while realising financial benefits and supporting the transition to a circular economy.
Watch out for the next article on recycling building materials.
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