With costs rising for carbon-intensive construction materials, main contractors should work with their suppliers to find green solutions, says Cressida Curtis of Wates.
Within 10 days of a climate denier being sworn in as US president, our government declared: “The UK is re-establishing itself as a climate leader on the global stage” in its Nationally Determined Contributions (NDCs).
An NDC, updated every five years under the Paris Agreement, sets out a country’s plan to reduce climate change. And this year, despite – or perhaps because of – shifting geopolitical sands, the UK has been unflinching in its ambition.
Within the NDC actions, the most stretching for our sector will be the introduction by 2027 of a Carbon Border Adjustment Mechanism (CBAM). This will increase the cost of imported carbon-intensive construction materials such as steel, cement and aluminium.
This tax is landing on a sector that experienced 17% of all UK insolvencies in 2024, that has seen around 300 companies collapse every single month since the end of the Covid lockdowns and where failures today are 39% higher than in 2019.
While navigating the financial challenge, we’re also being asked to do more: build more homes; deliver net zero; achieve better quality; attract more talent. And we are: last year at Wates we delivered £15 of social value for every £1 of profit made. But every pound in our sector – both financial and social – is hard won. And higher costs would exacerbate this deeply entrenched problem.
Financial fragility in supply chains
And so, we turn to innovation. But here, we hit a problem. The financial fragility being experienced in our supply chain commits many to stick with the familiar.
But confirmation of the CBAM is a watershed moment that forces us to pause and reassess. Our shared supply chain must thrive if we’re to deliver the high-quality homes, schools, factories and labs our nation needs. But we also need to decarbonise. This is the moment to regroup and reach for tools we can all employ, today.
Tier 1 contractors know we can drive down the embodied carbon of any project if we enter the process early enough and the same is true of our supply chain. They hold many of the answers to decarbonisation, but rarely is space made for those ideas to be explored at the right moment.
Bringing them to the table early, inviting their collaboration, working alongside them across multiple projects for different clients deepens understanding, trust and innovation in a way no individual contract will ever achieve.
We can decarbonise, identify solutions that avoid additional costs, improve quality and support our supply chain all at the same time.
The government has defined where we’re going. Our job now is to work out how we and our supply chain thrive on this new journey.
Cressida Curtis is group sustainability director at Wates.
