Green Minimum and the life-cycle approach: the construction industry may be on the cusp of a regulatory shift

“In the year since its establishment, the ÉVOSZ Sustainability Group has grown into an active professional forum with an expanding membership, joined by the most prominent corporate players committed to sustainability,” said Péter Kálmán, reflecting on the period to date.

 According to the head of the department, this is an important endorsement, which shows that:

„Interest in sustainability and the associated professional and economic benefits continues to grow steadily within the construction industry.”

The significance of the division is also highlighted by the fact that this is the first horizontal structure within ÉVOSZ; it does not represent a single specialist field, but covers the entire construction industry. Its members include investors, property developers, designers, building materials manufacturers, building services engineers, building materials traders, contractors, operators and waste management operators. According to Péter Kálmán, this is a key issue, because sustainability cannot be treated as the responsibility of a single player throughout a building’s entire life cycle: cooperation across the entire value chain is required.

Five working groups, 27 designated projects

Following its establishment, a list of projects was drawn up based on members’ suggestions, from which 27 topics were selected where they hope to make progress within three years. Five working groups are currently working on specific projects, including the development of working methods, the preparation of legislative proposals and research tasks.

Three objectives were already achieved last year: the Green Minimum proposal was drawn up, a sustainability survey was conducted with the involvement of members, and various professional partnerships were established.

These include the collaboration with Magyar Környezettudatos Építés Egyesület (Hungary Green Building Council, HuGBC), within the framework of which they are working together to develop the LCA, or life cycle assessment, methodology.
The LCA approach examines the entire life cycle of a product or service, from raw material extraction through manufacturing, transport and use, right through to waste management or recycling. It identifies the stages within the life cycle where the greatest environmental impact occurs and defines intervention points to reduce these impacts.   

We need to adopt a whole-life-cycle approach

In our country, a paradigm shift is needed not only in the thinking of investment decision-makers – whether they be public or private sector players – but also among the wider public.
 

There is a great need to adopt the LCA, or life-cycle approach

– said the head of the department.
It makes a difference whether a development is driven by the logic of quick sales and short-term returns, or whether long-term considerations regarding energy efficiency, water usage, liveability and the environment are taken into account right from the planning stage.

Other building materials and engineering solutions come to the fore when an investor looks beyond the handover or sale and takes the building’s entire life cycle into account.

The division treats this as a priority; moreover, this approach is in line with the objectives of the European Union, where the requirement for carbon reduction across the entire life cycle is becoming increasingly prominent. Hungary must also adapt to this approach, but this requires measurement, data and a standardised methodology. The division’s experts are working to establish this methodological framework. Market participants need to know which methods to use and how to present the results, whilst the authorities can only verify these on the basis of a standardised measurement and calculation system.

Putting the Green Minimum proposal into a legal framework could mark a breakthrough

Beyond a shift in mindset, achieving a breakthrough in sustainability requires the government to lead by example and demonstrate commitment at a strategic level. It is a significant sign that environmental protection is to be given its own ministerial portfolio, whilst investment will focus on public transport and integrated urban development.

„However, the real breakthrough, the genuine turning point, could come from legislative changes, to which industry players will also have to adapt. One such step could be the introduction of the Green Minimum proposals, which would make the application of international green building certification systems and sustainability standards a mandatory requirement for major public investments.”

The next step in this shift in mindset is to ensure that the topic of sustainability is introduced as early as primary education, and that at university level it is integrated into the curriculum at a high professional standard within the relevant degree programmes, supported by research.
Péter Kálmán added that professional organisations also have a key role to play, as they carry out important work in terms of professional representation, methodology and education.

Long-term benefits do not always materialise where immediate economic value lies

Financial considerations cannot be ignored when it comes to sustainability either. According to the head of the department, a distinction must be made between the various stakeholders and their short-, medium- and long-term objectives. It is difficult to persuade a property developer focused on sales to take into account a building’s operational lifespan of 20–30 or even 50 years, but it is not impossible.

He added:

„Technical solutions aimed at sustainability pay off in the long term and can even make buildings more economical and retain their value better than traditional structures or fittings. The question is, who reaps the benefits?”

Developers could be steered in this direction through regulation and incentives – such as tax breaks and grants. With the right measures, long-term sustainability goals can be made profitable even in the shorter term. A sustainability mindset is increasingly becoming a natural expectation among those who view their buildings as long-term investments or as part of their own business operations.

Timeless properties may be more valuable and therefore easier to sell, and in many cases are more resilient to climatic impacts – such as extreme heat and heavy rainfall. For this reason, they may represent a more favourable financing or insurance target for banks and insurers.
Buyer awareness is also growing in the housing market. Whilst this is less of a determining factor in the most price-sensitive segment, for those considering long-term housing or property investment, value retention and lower running costs are now clearly among the key considerations.
 

It is in the interests of society as a whole to encourage more sustainable investment, so that the country can have a building stock that is durable, of a higher quality, retains its value better and is more cost-effective to run.

Concrete’s carbon footprint is one of the biggest challenges

In addition to raising awareness, the division prioritises reducing the industry’s carbon footprint, increasing the use of natural building materials and promoting recycling. There is still significant potential for circular economy practices in the construction industry. Extensive research is being conducted worldwide into partially replacing concrete components and adopting solutions with a lower carbon footprint. Cement-based products and concrete structures are associated with the highest emissions of harmful substances.

It would represent a major step forward in decarbonisation if the carbon footprint of proposed building designs were also taken into account as an evaluation criterion in public procurement.
Péter Kálmán added:

In line with European Union regulatory trends, Hungary should ensure that life-cycle-based carbon footprint calculations form part of the building permit process by 2030. This should also be linked to specific reduction targets or performance levels.

One of the division’s working groups is scheduled to finalise a new tendering and competitive bidding methodology this year. The methodology would assist investors, developers and contractors in assessing bidders, subcontractors and suppliers from the perspective of sustainability and carbon reduction.

Natural building materials and a circular approach

Promoting the use of natural building materials is also a key priority in achieving carbon reduction targets. Péter Kálmán sees great potential in timber structures, as well as in the use of natural-based insulation, paints, solvent-free surface treatments and cladding. The division is also preparing to collaborate with the University of Sopron, where research is being conducted into the use of native Hungarian timber species in the construction industry.
Sustainability, however, is not just about the choice of materials. Reducing energy consumption and the issue of recycling construction waste and building materials are at least as important. The aim is to ensure that the future dismantling and recyclability of structures are taken into account right from the design stage.

The reuse of existing buildings is a key area

The sustainable reuse of existing, disused buildings is also an urgent priority. Changing a building’s function—for example, converting office blocks into flats—is a complex undertaking, both technically and financially. The structural system, façade and building services of an office block are often based on a completely different logic to those of a residential building. Retrofitting the bathrooms, kitchens, balconies or terraces required for flats can involve significant costs, and in some cases may not even be structurally feasible. Developers mainly undertake such conversions if the building is in a good location, as the property’s value continues to be largely determined by its location.

Companies are already feeling the pinch: this is a matter of competitiveness

Last year, the division also conducted a sustainability survey among the member companies of ÉVOSZ. This revealed that companies active in the competitive market are keenly interested in the topic of sustainability. Around three-quarters of respondents already have some form of measurement, certification or sustainability element built into their management system, and more than 60 per cent also have a corporate-level sustainability strategy.

The picture looks promising in terms of intentions, but the level of implementation still varies greatly. Péter Kálmán believes that,

Companies are increasingly viewing sustainability as a matter of competitiveness. They recognise that sustainability can provide a competitive advantage when it comes to attracting and retaining younger staff, securing project funding and meeting investor expectations.

In addition, many companies have also seen an internal, values-based drive for development emerge. Large corporations find it easier to launch centralised programmes and appoint dedicated managers for this area. Smaller companies, however, can capitalise on their flexibility: if the manager is committed, they can achieve rapid, tangible results.
Péter Kálmán emphasised that one of the Sustainability Section’s most important tasks is to collect and showcase good examples – whether relating to corporate operations or specific projects. In addition, they are developing working methods that can provide practical assistance to companies.

The operator must be involved right from the start of the planning process

There are positive examples of this in both public and private investment projects. In the case of the Liget Budapest project, for example, operational, energy, utility and smart concepts were already in place at the start of the planning phase. The project also set high international green certification targets, and the development achieved BREEAM Communities certification.
As a further example from the Óbuda Group practice, he mentioned Volvo’s headquarters and service centre, where meeting sustainability targets and operating with near-zero energy consumption were customer requirements.

 The MOL Campus has achieved the highest rating in two international certification schemes. The project has implemented forward-thinking solutions in terms of water consumption, comfort, light pollution and several other sustainability criteria.

Monitoring projects provides important feedback, as this is the only way to find out how sustainability solutions work in everyday life. Feedback is being gathered on Liget’s long-term investment programme, and data is being analysed in collaboration with the developer.

Part of this shift in approach is that operational considerations should be taken into account as early as the project preparation stage. The long-term benefits only really become apparent when mechanical, electrical and energy systems are tailored to operational requirements right from the design phase.

It is not enough simply to build: we need to create more resilient cities

Péter Kálmán also mentioned that the section is working on the adaptability of urban infrastructure: increasing green spaces, reducing paved surfaces, water retention, providing shade and ensuring urban ventilation. Cities need a long-term climate and sustainability strategy, which must also be incorporated into urban development plans.

It is essential that town and city planning regains its rightful status. Long-term urban structure plans must clearly define the potential areas for residential development and the necessary infrastructure requirements. It is important that these cannot be overridden by priority investments, as behind each development restriction there is often the protection of air corridors, ventilation routes or green spaces that ensure the liveability of the neighbourhood.

The head of the department pointed out that, over the past few decades, there have been many instances where the city or local authority and a private developer have entered into an urban development agreement to collaborate on the development of public utilities or public facilities.
According to Péter Kálmán, for a breakthrough in sustainability within the construction industry, professional expertise, the regulatory environment, investor accountability and financial incentives must all work together to steer the sector in the same direction.