February 29, 2024

Going green with construction contracts

As the world embraces sustainability, the construction industry still carries some alarming statistics.

Buildings and structures account for almost 40 per cent of the world’s carbon emissions – around 14.7 gigatons (Gt). Of that, around one third comes from a project’s initial construction.

Looking at those figures, sustainability has become more than a concept for those within the sector. As an industry, the responsibility towards sustainable building practices is increasingly apparent.

Throughout the move to more environmental practices, construction law plays a pivotal role in the transition.

Construction law and sustainability – A critical relationship

Why does the law have such a crucial role to play in sustainable building projects? Its scope holds the answer.

On a regulatory level, the law around construction projects has the potential to mandate green building processes and vastly reduce the emissions from the sector.

On the level of individual projects, regulatory compliance is involved at every stage, from land acquisition and planning to project completion and maintenance.

It includes regulations on building codes, environmental law, contract law, and dispute resolution.

In short, the regulatory requirements surrounding construction have the potential to ensure consistent, meaningful compliance with sustainable policies.

How can we support sustainability initiatives?

There are a number of initiatives specifically designed to enhance sustainability at the construction process, including:

  • Green certifications – Legal frameworks often encourage compliance with green building standards, such as the Building Research Establishment Environmental Assessment Method (BREEAM). These standards provide guidelines for environmentally responsible construction, covering energy efficiency, water conservation, and material sustainability.
  • Environmental Impact Assessments (EIA) – EIAs are a legal requirement for many construction projects under the Town and Country Planning (Environmental Impact Assessment) Regulations 2017, assessing the potential environmental impacts of proposed developments.
  • Biodiversity net gain (BNG) – Developers and local authorities for certain projects must deliver BNG of 10 per cent or more, leaving wild habitats in a measurably better state than before development.

However, construction projects ought to go beyond the regulatory minimum to demonstrate a real commitment to sustainability and achieve set goals.

The aim of these initiatives is to embed green goals into the process end-to-end and incorporate sustainability into construction best practices.

Construction contracts are the best place to do this. They are already integral to most building projects and create a legal obligation between signatory parties.

Additionally, this is your opportunity to bring in expertise in construction law to advise on changes to standard contracts and on any sustainability clauses you or another party wishes to include.

Places you might include sustainability clauses in a construction contract include:

  • Supplies – You can agree with other parties on whether materials and labour providers will need to abide by certain green benchmarks before being used in the project.
  • Working methods – The contract stage is your opportunity to lay out expectations and things to avoid in terms of working practices which may produce carbon emissions.
  • Third-party services – Similar to considerations around materials, non-construction services such as legal partners, accountants, marketing and even catering services should all be considered through the lens of sustainability at this point.

JCTs and NECs

These contracts are particularly important for laying out sustainability requirements in complex construction projects.

Joint Contract Tribunals (JCTs) provide a comprehensive framework for managing the relationship between all parties involved in construction projects, including employers, contractors, and subcontractors.

JCT contracts are designed to clearly define the roles and responsibilities of each party, outline the procedures for payment, set out the mechanisms for dispute resolution, and address various other aspects of the construction process such as work quality, timeframes, and completion criteria.

They are an ideal point to assign responsibility for sustainability outcomes during a construction project.

On the other hand, New Engineering Contracts (NECs) are unique for their straightforward approach to defining the responsibilities and obligations of all parties involved.

This approach helps to reduce misunderstandings and disputes, facilitating a more collaborative management of construction projects.

They are particularly valued for promoting partnership and cooperation, leading to more successful project outcomes – a must for reducing carbon emissions.

For advice on construction contracts and sustainability, please contact our specialist team today.