Watercare’s carbon-reduction initiative has been endorsed as the Construction Sector Accord’s first ‘Beacon Project’ – a project that demonstrates leadership to the rest of the sector by taking a transformative approach to construction.
Watercare’s carbon-reduction programme has been endorsed as the first ‘Beacon Project’ in the Construction Sector Accord’s Transformation Plan. The accord, launched in April 2019, is a genuine partnership between industry and government that is working to fix many of the issues and challenges facing the construction sector.
The Transformation Plan is the accord’s three-year action plan focused on addressing sector challenges. It was launched in January 2020 by industry and government leaders and identifies six workstreams to lift sector performance – leadership, procurement and risk, business performance, people development, health and safety, and regulatory systems.
Accord steering group co-chair Chris Bunny says one of the accord’s aims is to improve the performance of the sector through sharing good practice and lessons learned across the sector to help raise others’ capabilities. This is being done through Beacon Projects.
WHAT IS A BEACON PROJECT?
“A Beacon Project represents an attempt to try something new, and demonstrate to the entire sector how new approaches can be implemented and the results they achieve. They provide concrete evidence of how the principles of the Construction Sector Accord can work in the real world,” says Chris.
Any project can be classified as a Beacon Project, as long as they present a learning opportunity for the construction sector. The project needs to meet pre-agreed criteria that demonstrate alignment to accord values, an intent to achieve accord goals, and represent an innovative practice.
The accord is looking for projects that, if implemented across the sector, could be truly transformative, and help achieve the goals of a more productive, resilient, sustainable and skilled construction sector delivering for New Zealanders.
“We are looking for examples from across industry, private and public sectors, and for projects of different types and sizes. Over time, we hope that the portfolio of Beacon Projects represents a cross-section of project sizes, types, regions and approaches,” says Chris.
UNEARTHING THE TRULY TRANSFORMATIONAL
The process that was undertaken by the accord team and Watercare to put their project through the Beacon criteria was a learning experience for all involved.
Rather than focus on the Enterprise Model – the alliance model that brings Watercare together with long-term partners – the team’s attention instead turned to finding the elements that were scalable and transferrable.
“For this to be successful, our Beacon Projects must not only be transformational, but also achievable for the rest of the industry. That is why we must focus on the things that others can pick up and implement themselves,” says Chris.
The result was the identification of two core principles that underpinned the Enterprise Model: the link between carbon and cost, and the fact that by reducing your carbon emissions you are likely to reduce your costs; and that this would require a shift in mindset by Watercare and their construction partners, who would all need to focus on achieving the three clear targets: 40:20:20.
Watercare’s bold aims to reduce both the cost of infrastructure carbon and the carbon produced met the Beacon Project criteria.
SHARING THE VISION
The next step was to understand the steps that Watercare took to achieve these targets, and share those steps with the sector. “Watercare’s 40:20:20 vision is ground-breaking for New Zealand in that it tackles carbon emissions and wellbeing, not just cost,” says Chris.
“The organisation has recognised that improved environmental performance equates to better business and people outcomes, while challenging the industry’s silo mentality to ensure best practice and lessons learned are readily shared.”
As a Beacon Project, Watercare will provide the accord steering group with regular updates and reports on lessons learned. This information will be disseminated to accord members and the wider sector.
The accord team are already in discussions with the next wave of potential Beacon Projects, each of them exhibiting different aspects of the accord. The team are still on the lookout for potential future Beacon Projects and would like to encourage potential candidates to contact the accord team.
INITIATORS OF CHANGE
Each day Watercare supplies Auckland with 379 million litres of water, and treats 460 million litres of wastewater, including trade waste from industry. If the city’s water pipes were placed end to end, they could reach as far as Tokyo.
This vast infrastructure network is regularly upgraded and expanded, in response to Auckland’s growing population. Faced with a $5.9 billion investment programme over 10 years, in a constrained construction supply market, Watercare identified the need to transform its infrastructure delivery.
One of the first steps was to develop a bold new vision titled 40:20:20. Specifically, the following targets were set:
• 40% reduction in carbon emissions from construction by 2024
• 20% reduction in cost of construction by 2024
• 20% year-on-year improvement in health, safety and wellbeing.
International studies show that pursuing a low-carbon agenda stimulates innovation, promotes collaboration across the supply chain, and reduces cost. According to the UK’s Infrastructure Carbon Review (ICR), up to four metric tonnes of carbon dioxide equivalent per year of capital (or built) carbon, and 20 metric tonnes of carbon dioxide equivalent per year of operational carbon could be saved by 2050 if best practice is adopted throughout the sector – saving the UK economy £1.46 billion a year.
Watercare saw an opportunity to take an industry-leading role by ensuring its infrastructure upgrade programme supported the fight against climate change.
“As a lifeline utility that provides water and wastewater services to about one-third of New Zealand’s population, our business is intrinsically connected to the natural environment,” says Watercare’s chief infrastructure officer, Steve Webster. “It became clear that we need to think about how our industry affects the carbon footprint of New Zealand. Our conclusion was that we must change the way we deliver infrastructure – and asset owners, like ourselves, need to be the initiators of this change.”
DRIVING ACTION ON CARBON REDUCTION
Watercare’s Enterprise Model is a New Zealand first, driving action on carbon reduction. Watercare recognised that a change in behaviour would be required to build better infrastructure – not only within Watercare, but throughout the supply chain. “Our ambitious 40:20:20 targets cannot be achieved if we continue to deliver projects in traditional ways,” says Steve.
The Enterprise Model involves Watercare working with two primary construction partners – Fulton Hogan and Fletcher Construction – and three design consultants – Beca, GHD and Stantec – over a 10-year period on a $2.5 billion programme of work. “By doing so, we hope to realise the benefits of early contractor engagement – enabling us to co-develop low-carbon designs and construction methods, secure and retain the best talent, and achieve greater productivity and efficiency,” says Steve.
The UK’s ICR highlights the importance of making carbon reduction ‘part of your organisation’s DNA’, which was a key part of Watercare’s strategy. The organisation recognised the need to identify carbon hotspots to better understand the environmental impact of its operations. “A detailed understanding of project-by-project carbon impact is a good start, but we want to take a broader view and determine the potential carbon impact of our full project pipeline throughout the next 10 years,” Steve adds.
Additionally, emphasis shifted from operational carbon (emissions associated with the operation and maintenance of an asset) towards build carbon (emissions associated with the creation of an asset). “We were surprised to discover that 65% of Watercare’s total carbon is in our infrastructure build,” says Steve. “It created a burning platform, and an incentive to do something about it.”
A carbon reduction hierarchy has since been integrated into Watercare’s procurement model, in a bid to tackle carbon early. The four stages of the reduction hierarchy, ranked in order of importance, are: build nothing, build less, build clever, and build efficiently.
This new way of working requires unconstrained thinking, says Steve. “Carbon can be reduced at any point in the delivery process, but the benefits are greater in the early stages of procurement. For example, the first step of the carbon reduction hierarchy – build nothing – requires us to challenge whether that piece of infrastructure is actually needed.”
Emphasis is put on continual improvement and monitoring, and Watercare’s partners are incentivised to achieve the 40% carbon reduction target. “Strong monitoring requirements have been developed to ensure project progress is tracked against the carbon reduction targets, and our two construction partners are embedded in the early planning stages,” Steve notes.
“Ultimately, we want to create a culture of innovation and enable existing solutions to be challenged. What the 40:20:20 vision has done is that it has stimulated new thinking among other asset owners, and highlighted how much carbon is used in construction. It also highlights the transformational change required throughout the sector to tackle climate change. It is not a change you can see yet, but it is definitely a change in mindset.”
The criteria and application form for Beacon Projects are available on the Construction Sector Accord website constructionaccord.nz/good-practice/beacon-projects/