Builders are sourcing a rising percentage of material for projects from discarded building parts. Recycling materials in construction has created a budding revolution in our industry that has benefits not just for the environment but for business value. With the push to decarbonize the building sector, there are more opportunities for renovations and retrofits and this area is primed for the uptake in circularity. Here are some key reasons to integrate circular practices into building design and construction.  

The Cost-Cutting Value of Circularity in Renovations  

Renovations and retrofits are becoming more common as building owners grapple with the need to cut energy costs and meet regulatory demands (more on the latter in a bit). Depending on the project, there is typically less cost involved in renovations as opposed to new construction – and this also applies to using recycled materials as opposed to new materials.  

According to a recent white paper from the World Economic Forum and McKinsey, “circularity – including retaining, reusing, recycling and repurposing existing materials – can reduce the extraction of virgin raw materials and generation of waste, thereby increasing material utilization and efficiency.” Additionally, an estimated 60% of overall renovation costs come from materials, which can be a source of major cost savings. The cost reduction potential of circular materials in renovations and in construction more broadly needs to be part of the financial analysis of projects, not just over the long run but here and now.   

It depends on a given project, but overall, putting discarded building parts back into circulation should prove a cost saver over virgin raw material extraction and purchase.

Staying Ahead of an Evolving Regulatory Environment   

Another major impetus for incorporating circularity into the built environment is regulation. Energy efficiency and decarbonization standards are proliferating in both national and local jurisdictions, which is a major catalyst for the surge in building renovations currently taking place. Older buildings are less energy efficient, but as the WEF/McKinsey report also says, renovating old buildings cuts carbon emissions by 75% and costs by 77% compared with new construction. Given the already-discussed potential of circular practices to reduce renovation costs, there is a clear motivation to source improved, energy-efficient options.   

But local regulations are not just seeking to reduce energy efficiency and carbon emissions. Already, some jurisdictions are going further to mandate better construction waste management and that materials removed are recycled. These include New York City’s Local Law 97, which often necessitates renovations using sustainable materials and practices, and California’s CALGreen Building Standards Code, which mandates recycling at least 65% of construction and demolition waste. While these regulations pertain to recycling removed materials in demolitions and renovations rather than using such materials in construction, they highlight the larger trend toward regulatory action on circularity as a core part of sustainability in the built environment.  

We cannot guess exactly how these regulations will evolve, but we can be reasonably certain that they will become more, not less, common. It’s therefore best to fully integrate circularity into building practices now.   

Complying With Sustainable Building Standards 

Outside of official government regulation, the building industry has seen the emergence of standards designed to provide general certification for sustainable construction. Complying with these certification requirements will likely become less “nice-to-have” and more “need-to-have” over time, especially if they are embedded into the previously mentioned regulations around sustainable buildings.  

Among the leading standards are the LEED (Leadership in Energy and Design) ratings system in the United States and BREEAM (Building Research Establishment Environmental Assessment Method) ratings system, which is used more in the United Kingdom and Europe more broadly. Both LEED and BREEAM include, for the purpose of reducing overall carbon emissions in the building process as well as responsible materials allocation, the opportunity to increase the sustainability value of projects through circular practices (see LEED’s use of circularity in ratings here and BREEAM’s here). The standards incentivize builders to gain sustainability points through using recycled and locally sourced materials with less embedded carbon, ensuring a more “whole-life” approach to sustainable construction.  

Compliance with LEED, BREEAM and other standards is becoming more expected of builders, and given the already-discussed financial benefits of circularity in certain cases, using circular materials and practices is a great way to gain points toward qualifying as a green building project. Given that mandatory regulations in many places are moving toward more sustainable practices anyway, compliance with these voluntary standards can keep builders ahead of the curve and focused on the long run.  

Growing Public Demand  

Lastly – but most importantly – is that circularity is in tune with broader consumer and stakeholder demand and is only likely to become more so. A recent survey by Prospects at Jisc found “86% of the young people questioned said it was vital that the company they work for has a positive environmental impact, while 85% said it was important that a company has sustainable practices.” This drives greater demand and need for sustainable offices and other commercial facilities. This is reflected in recent findings that “green-certified” office spaces – such as those certified by the LEED or BREEAM ratings systems – command notable premiums in markets, according to a 2024 World Economic Forum article. These premiums “average just over 7% across eight cities in North America, around 10% across nine cities in Asia Pacific and more than 11% in London.”  

In addition to energy efficiency and wider decarbonization, circularity will play a key role in sustainable innovation in buildings. The market signals are plain; the building industry must respond.  

Driving Change in Our Industry  

Now that ceilings, walls and other aspects of buildings are being more routinely recycled, it is good to reflect on how much more will be circular in another decade. One thing is clear: the building industry needs to continually evolve and reimagine what it means by circular building. This entails focus on partnerships, communication (both within and without one’s own organizations) and cross-practice, cross-firm collaboration to forge the path forward. Some potential examples include:  

• Working with commercial building owners and contractors in reducing construction waste on renovation projects, thereby sourcing more recycled materials for a builder’s own projects. Armstrong World Industries receives ceilings that were destined for landfills and instead recycles them for new projects, allowing the company to meet its own circularity standards. And those from whom materials are salvaged also demonstrate project sustainability by ensuring responsible use. Such partnerships are vital and should be pursued as often as possible.  

• Creating company and industry goals and metrics for increasing the share of recycled materials. Regulations are moving in the direction of circularity in construction, and voluntary industry codes and standards are as well. Companies and consortia of firms should follow likewise. By setting more ambitious but feasible goals for sustainability, building companies can demonstrate value while also helping to shape the future of the industry, rather than just being spectators waiting to comply.  

• Integrating circularity approaches fully into R&D and innovation initiatives. Building firms can become industry leaders by fully committing their R&D, innovation and building science teams to ensuring the best practices for circularity, ones which also minimize overall costs for the firm. R&D teams can have a broad mandate to factor in circularity across all initiatives, in addition to pursuing specific circularity-related ones.  

• Keeping a long-term mindset. While we should recognize the short-term possibilities of cost-saving in circularity, we need a long-term perspective that recognizes a new reality of sustainable supply chains and sourcing, one that no longer relies on constant production of new virgin materials for construction on a finite planet. Looking at the industry in a holistic way, and working together, can lead the industry into a new era of sustainability, responsibility and long-term value.