Climate change. It is hard to argue against this issue being the largest environmental challenge globally today. As the world becomes increasingly aware of the importance of sustainability, green and sustainable practices are reshaping the engineering and construction industry more than ever. With legislation and energy codes becoming increasingly stringent, green engineering and construction have become the standard for developers, homebuyers, building owners, and tenants.
What is Green Engineering & Construction?
According to the US Environmental Protection Agency, Green Engineering is the design, commercialization and use of processes and products that reduces pollution, promotes sustainability, and minimizes risk to human health and the environment without sacrificing economic viability and efficiency. It is widely perceived that green engineering has the greatest impact and cost-effectiveness when it is applied early in the design and development phase of a particular project or process.
Green Construction refers to the practice of building structures that are designed and constructed to maximize the occupants’ health and productivity using fewer resources, reducing waste and minimizing environmental impacts throughout the structure’s lifecycle. Green Construction emphasizes the efficient use of energy and water, as well as the reduction of waste and pollution.
All stakeholders understand the long-term benefits of green structures, which include higher energy efficiency, reduced waste, and a lower building life carbon footprint.
Current Landscape
In December 2020, the Canadian federal government announced its “Investing in Canada Plan Infrastructure Program”. See summary below:
Since his inauguration, US President Joe Biden has signed several executive orders signaling his commitment to “green” federal infrastructure projects, especially for those focused on climate change. We believe this further indicates that the current political climate in both Canada and the US are increasingly more committed to sustainable and green construction.
Application
Some common methods of green engineering and construction include:
a. Using more environmentally friendly building materials (see select examples below):
b. Better construction waste management.
This includes disposing construction waste and toxic materials in a thoughtful and safer way. Some examples include:
Opting for non-toxic chemicals over traditional chemicals for easier and less harmful disposal.
Reusing or repurposing building materials where applicable.
Implementing waste sorting procedure at jobsites for reuse and recycling efforts.
Crushing excess / unused concrete for use as foundation or as aggregate beneath other building structures.
Other recyclable construction debris include porcelain, tile, lumber, metals, masonry, plastic, carpet and insulation.
c. Reducing waste as much as possible through processes like modular construction.
Also known as prefabricated construction, this method allows for the primary elements of a building structure to be assembled in a controlled environment using assembly line systems. Mechanical contractors use Building Information Management (BIM) systems to cut and prepare materials indoors to avoid shape changing problems caused by varying weather conditions outdoors. Materials preparation in a controlled environment reduces the damage caused by natural elements (temperature, weather, humidity etc.). Indoor planning and assembly also save time with access to equipment that may not be readily available on jobsites. All these contribute to less building material waste for the overall project.
d. Emphasis on green building practices.
Green buildings can preserve natural resources and improving our quality of life. Some common features include:
Efficient use of energy and water. E.g., LED light bulbs, smart thermostats, optimization via sensors, hot water recirculating system upgrades, rainwater capture.
Use of renewable energy. E.g. solar panels.
Designs that enable adaptation to a changing environment, especially in seasonal climates.
Anyone who has ever observed a construction site can attest to the amount of waste produced. According to the Canada Green Building Council:
LEED-ing the way
Leadership in Energy and Environmental Design (LEED®) is currently the most widely used green building rating system globally. Since 2005, LEED Canada has led to:
Green Mergers & Acquisitions (M&A)
Engineering and construction companies understand the benefit of offering sustainable environmental services as part of the overall solution to clients. Having such a service offering increases a company’s appeal and its chances of winning new project bids, especially with most construction projects today emphasizing sustainability.
We at Whitehorn have observed several recent M&A transactions involving engineering and construction companies, which appear to be based on the industry-wide green theme. Since December 2020, we observed 27 transactions involving Canadian and US engineering and construction companies that were green focused. The targets acquired specialized in various sustainability practices including renewable energy, environmental compliance reporting, sustainable building materials to name a few. We summarized select transactions below:
We believe environmental sustainability is and will continue to define the engineering and construction industry for decades to come. Green and sustainable practices will continue to fuel green M&A transactions similar to the ones listed above. We also believe these transactions are just the beginning of “the Green M&A Wave”. Engineering and Construction companies are adapting and M&A presents opportunity to profit from the increasingly stringent legislation and energy codes as well as keep up with the green societal and political push worldwide. Companies seeking a competitive advantage are already diving into the market seeking strategic “green” acquisitions to stay ahead of the competition.
We leave you with a few questions to ponder: Is environmental sustainability part of your firm or company’s strategic goals going forward? Do you see the benefits from capitalizing on the renewable and “green” trend that has been gaining momentum? Would your firm of company benefit from a strategic acquisition of a peer with environmental solution offerings?
If you answer yes to any of the above, reach out to us. Whitehorn is well positioned to assist you in identifying and contacting acquisition target(s) that would expedite your “green” transition and ultimately, lead to further growth. Give us a call!
