Construction is the backbone of modern society, playing a vital role in building essential structures like homes, schools, hospitals, and the infrastructure that powers daily life. As a dynamic and multifaceted industry, construction involves diverse projects, each with a specific purpose that contributes to the development of communities. From residential buildings to large-scale commercial developments, construction not only drives economic growth, social wellbeing and technological advancements but can also help achieve net-zero goals by 2050.

The building and construction industry¹ remains one of the world’s largest industries. In 2023, $13 trillion worth of gross annual output was devoted to construction projects globally, constituting 7 percent of global gross output.

Urbanization has also had a significant impact on the construction industry, and this impact is expected to continue in the future. As urban populations continue to grow, the demand for new and affordable construction projects, including housing, commercial buildings, and infrastructure, will increase. It is estimated that global floor area is expected to double by 2060, the equivalent of adding New York City every month for the next 40 years².

Projects centered around renewable energy, low-carbon activities, circular solutions and improved building insulation will play a significant role in reducing the sector's carbon footprint. 

Data Source : 2024 engineering and construction industry outlook | Deloitte Insights

Environmental challenges

The buildings and construction sector is responsible for approximately 40 percent of global CO2 emissions³ and 36 percent of final energy use⁴, making it a key area for implementing sustainable practices. As one of the largest industries globally, buildings and construction impacts everything from resource extraction to wildlife habitats and waste generation.

But there is growing awareness that targeting so-called “embodied carbon” (which accounts for 11 percent⁵ of total greenhouse gas emissions) in construction and building materials could make a significant contribution to lowering the sector’s emissions. Embodied carbon covers emissions from the extraction, manufacturing, transportation, installation and disposal of products in buildings like steel, concrete, insulation, drywall and other materials. With global building floor area set to increase by 75 percent by 2050, urgent action is needed to decarbonize the buildings and construction industry. 

Labour shortage and lack of productivity

By 2040, the industry could grow by around 70 percent, but engineers and constructors in many parts of the world are struggling to deliver even today’s project pipeline. They’re already faced with tight labor markets for critical roles, such as engineers, craft workers, and project managers, and there is no evidence that the near-term labor market will be able to keep up with demand. An increase in productivity is hence needed to allow the industry to deliver projects with the same or fewer people per project. It would also create the financial space within construction companies to increase wages and invest in better tools and practices.

Solutions for a decarbonized and circular built environment

The good news is that sizable reductions in embodied carbon are possible in common types of buildings for little or no extra cost. These can be achieved by switching to more sustainable materials and design strategies that reduce material use and waste and incorporate recycled debris from demolition sites. Further reductions are possible by electrifying construction vehicles and machines, which tend to run on diesel at the building sites. 

A recent white paper by the World Economic Forum in collaboration with McKinsey⁶ demonstrates that circular approaches for materials such as cement, steel, aluminum, and gypsum could abate 75 percent of embodied emissions in the built environment while creating up to $360 billion in economic net value across three dimensions: the recirculation of materials and minerals, renewable and recovered energy, and reduced emissions through carbon capture, utilization, and storage (CCUS).

Our technologies lead the way

With its leading electrification and automation technologies, ABB is helping the buildings and construction industry run smoothly and buildings become more energy efficient, productive and sustainable.

Helping our customers outperform

Our robots lend a helping hand – bringing productivity and efficiency

One of them is our partnership with UK-based start-up Automated Architecture (AUAR) to create robot-powered microfactories that build low-cost, energy efficient homes from sheet timber, which can help address the housing affordability crisis confronting many cities. AUAR and ABB plan to establish a global network of local micro-factories to manufacture housing panels near their final destinations, reducing the need for extensive onsite construction. To showcase this approach, AUAR has already set up two robotic micro-factories in the US, aiming to build thousands of sustainable and affordable homes across the Midwest.

Making buildings smart and energy efficient

ABB supports the transformation of the buildings sector with smart solutions and energy-efficient technologies that help optimize energy use and reduce emissions across offices, factories, hospitals, and homes.

Key energy efficient building projects : 

Construction vehicles - reducing reliance on fossils fuels

The global construction industry mainly uses diesel-powered construction vehicles such as excavators, cranes and dozers that are estimated to collectively emit around 400 Mt of CO₂ per year. By developing electric drivetrains and power electronics specifically designed for the demanding conditions of construction sites, ABB is helping to reduce the industry's reliance on fossil fuels, enabling these machines to operate with minimal environmental impact.

Adopting sustainable practices in construction is not just important, it’s essential for the future of the industry. With robotics, electrification and smart automation solutions, ABB’s offerings for sustainable construction will pave the way for a leaner and cleaner future.

Footnotes

1 McKinsey & Company - Delivering on construction productivity is no longer optional

2 World Economic Forum - Nine solutions for Cities to Cut Carbon Emissions in Construction

3 Nine solutions for Cities to Cut Carbon Emissions in Construction | World Economic Forum

4 The GlobalABC Roadmap for Buildings and Construction 2020-2050 – Analysis - IEA

5 World Green Building Council - Embodied Carbon

6 Circularity in the Built Environment: Maximizing CO2 Abatement and Business Opportunities