Circularity in the Built Environment 2024

Retrofit-specific reuse and recycling infrastructure for circularity Retrofit-specific capabilities and professionals for circularityBOX 8 BOX 9There are three main logistics steps in a circular retrofit: extracting material from the building, sorting materials and either transporting them to refurbish, recycling and storage facilities or reusing them on-site. If sorting on site is feasible, circularity offers a social benefit by creating new jobs, for example, for unskilled workers who could tear out and sort retrofit waste. For designers, upgraders and renovators, specializing in circular retrofits requires developing proficiency in assessing existing structures for potential reuse and prioritizing careful disassembly over demolition. These professionals can also focus on recycling materials or parts on site to reduce logistics costs and vulnerability to supply-chain interruptions. Beyond their primary services, upgraders and renovators can benefit financially from circularity by salvaging and selling materials recovered during the retrofit process. These salvaged materials can be repurposed and sold for other projects, creating an additional revenue stream while reducing waste and promoting resource efficiency. Building a workforce with the necessary skills and expertise is important to support circularity, especially for designers, upgraders, waste handlers and manufacturers. Manufacturers can build capabilities in processing circular materials and parts to ensure sufficient supply. This can be achieved by developing “green parts” with high levels of recycled materials and setting up dedicated lines to remanufacture used parts. Some organizations have secured 15-30% price premiums for circular, climate-friendly and net-zero products.42 Manufacturers can also diversify their core operations by adopting service-based models such as “material-as-a-service” (MaaS) or “energy-as-a- service” (EaaS). These models enable construction companies and owners to lease materials or equipment, ensuring their return and recycling, thereby reducing environmental impact. Service-based models not only provide a steady revenue stream but also enhance long-term customer retention. Additionally, manufacturers can horizontally integrate by using “waste” as feedstock for other industries, generating supplementary revenue streams. At the same time, vertical integration can be used to establish reverse logistics and take-back mechanisms, thereby increasing revenues from recycling services offered to other companies. Another strategic option entails launching a digital marketplace that connects supply and demand for recirculated materials. A digital marketplace could also match employers with workers needed to disassemble, transport and recondition salvaged materials, thus helping optimize workforce productivity and creating new jobs. Real-estate investors focused on circularity have several financing options tailored to different strategies and scales of investment, ranging from single circular building projects to large-scale circular ecosystems. Financing options include preferential loans, green bonds and revenue- sharing mechanisms that incentivize collaboration. Grants and subsidies from institutional financing bodies can offset the higher upfront costs of sustainable construction. For example, the New York State Energy Research and Development Authority (NYSERDA) encourages project owners to prioritize sustainability through performance- based fees tied to energy savings. Traditional banks, often driven by track records, may require separate funds with different risk profiles to support circular economy developments.433.4 Capabilities and professionals 3.5 Financial mechanisms Circularity in the Built Environment: Unlocking Opportunities in Retrofits 22