Challenges and opportunities of low or zero carbon building: prospects of business models

Abstract

There is an emerging consensus amongst governments, business sectors and civil societies regarding the urgent need to address the multiple challenges of climate change, environmental pollution, resource depletion and economic instability. The building and construction sector has been identified with the most opportunities for cost-effectively reducing carbon emissions. However, although business opportunities have been identified for low or zero carbon building (L/ZCB), L/ZCBs are generally perceived as more expensive and challenging than conventional buildings. Also, L/ZCBs are often addressed solely from their technological and environmental perspectives, while important economic and sociocultural aspects have been overlooked or examined implicitly. This paper aims to contribute to the knowledge of the challenges and opportunities of L/ZCB in a systems manner, and to explore how business models can help construction organisations address the former and maximise the latter. The research was carried out through the combination of a comprehensive literature review and case study with a large construction organisation which played a significant role in the UK and internationally. The examination of the challenges and opportunities employed the PESTEL analysis framework (Political, Economic, Sociocultural, Technological, Environmental and Legal). The case study included a desk study, observations, meetings and personal interviews with senior business and sustainability managers of the company. The results suggest the imperative role of business models for L/ZCB developments. Establishing and innovating business models were considered to present an opportunity for the company to sharpen their competitive edge in the market. A wide take-up of business models of L/ZCBs among construction firms was perceived to fit well the building industry's socio-technical system in addressing the multiple challenges.