Circularity in the Built Environment 2024

Transitioning to a circular value chain requires a systems view, considering all interconnections and interactions among the diverse set of stakeholders involved. Each stakeholder must take coordinated actions to ensure circular principles are embedded from the early stages of design to the end of a building’s life cycle. Compared with new buildings, the retrofit value chain places greater emphasis on services, with upgraders, renovators and materials and parts manufacturers poised to capture the largest share of value pools (Figure 7).Transitioning to a circular value chain Key themes for stakeholders include conducting whole life-cycle assessments, using technology and establishing effective reverse logistics. 3 Illustrative value pool split (value add)36 across the circular retrofit value chain FIGURE 7 Owners and investorsDesigners, planners and auditorsUpgraders and renovatorsDistributors and logistics handlersWaste handlersOperators and users Materials and parts manufacturersTotal circular retrofit market100% 5-10% 5-10% 25-35% 30-45% 5-10% 10-15% <1% Notes: Value add is the economic value that is added to goods or services at each stage of the value chain Source: McKinsey analysis Circularity in the Built Environment: Unlocking Opportunities in Retrofits 18