Europe needs to promote a sharing economy for the construction industry

From an industrial standpoint, sharing economy is revolutionary in its simplicity. When companies start sharing physical resources, they stimulate others to align their business activities with sharing economy principles. This is an opportunity for Europe in general, and the European construction industry in particular, to assume a leading position in sustainable economic development.

Political decisions have the ability to pave the way toward a sharing economy that is business-oriented, efficient, and crucial for sustainability. In December 2015 the European Commission adopted an ambitious Circular Economy Package to stimulate Europe’s transition towards a circular economy. A welcomed initiative, which will boost global competitiveness, foster sustainable economic growth and generate new jobs. But circular can only take the EU part of the way towards meeting its sustainability goals.

To achieve a truly sustainable development the EU needs to consider the resource efficiency of the actual use phase. Efficient sharing has a positive environmental impact throughout the entire product life cycle – from resource extraction and manufacturing, through transportation and usage, to end of life and waste management.

According to the European Commission, the EU is currently generating some 3 billion tonnes of waste annually, of which 90 million tonnes are hazardous waste. Construction and demolition waste is one of the heaviest and most voluminous waste streams generated in the EU, and accounts for approximately 30 percent of all waste generated. This forces us to move from a traditional take-make-waste economy towards a system in balance with our resources and the planet.

To facilitate this shift, the construction industry needs to fully encompass and integrate the benefits of sharing economy in their business model. Furthermore, the EU needs to develop and implement clear guidelines and boundaries in defining the concept, along with effective political initiatives that prioritize access to over ownership of physical resources.

The sharing economy referred to in this article is defined as “a B2B business model of allowing temporary access to physical resources, thereby increasing the utilization”. A fully utilized product — one in continuous use — is in all respects a more sustainably utilized product than one that lies idle for long periods. The concept thus effectively excludes what is commonly known as platform economy, a business-to-consumer (B2C) sharing economy model that places greater responsibility on the individual. To further stress the difference between the two, platform economy can be exemplified by businesses such as BlaBlaCar carpooling, whereas B2B sharing economy includes for example rental companies that invest in, and maintain, a product fleet for others to share.

Refining the concept to B2B sharing makes it possible to focus on the type of sharing that helps increase resource efficiency in and reduce the environmental impact of business done between companies. The concept includes renting resources for production, for example, of construction machinery and materials, and other heavy machinery, which is especially harsh on the environment. Highlighting and promoting B2B sharing is crucial to decreasing the environmental impact of the European construction industry.

In 2017 the European rental market saw an increase of 3.1 percent, and a rise of 2.5 percent is expected for 2018. The rate of renting is growing only marginally faster than the economy as a whole; very far from the pace of change needed for the sharing economy to make a serious impact in the construction sector.

The core environmental benefit of B2B sharing is that a fully utilized product — one in continuous use — is in all respects a more sustainably utilized product than one that lies idle for long periods. Also, in the case of waste management, rental partners could help construction companies reduce and recycle waste, take care of end-of-life equipment and use their leveraging power to promote production of more sustainable, recyclable equipment.

European construction companies have become increasingly aware of the environmental and economic benefits of waste collection, separation and recycling – though many still struggle with execution in said areas. The main issue that remains, however, is decreasing the total amount of waste, as well as reducing and managing mixed waste. It is also not uncommon that as much as 20 percent of all waste at a construction site comes from “temporary constructions”, that could at least partially be replaced by rental solutions.

By taking the lead and stimulating the financial and environmental benefits of B2B resource sharing, the EU can expand incentives to the general public and businesses, to promote access over ownership and unlock the environmental benefits inherent in greater sharing of physical resources.

Anders Collman, Senior advisor, former VP Sustainability at Cramo

Lin Lerpold, Associate Professor at the Stockholm School of Economics

Mattias Goldmann, CEO of Fores, a green and liberal think tank

Per Löfgren, Director of Sustainability, Head of Environmental Affairs at JM AB