Is eco-responsible construction insurable?

Faced with resource shortages that constantly remind us of the climate emergency, the construction industry is forced to reinvent itself. A solution is emerging, that of eco-responsible construction which appeals with its innovative techniques and the use of materials with low environmental impact. However, the increase in risks inherent to these new challenges is not likely to reassure insurers who lack the visibility to offer optimal risk coverage. Paradox?

Scary. The word is not an exaggeration to describe the impact of the construction sector on our planet. In a recent report published by the UN, the construction world is responsible for 37% of global CO2 emissions. There is no point commenting on this figure as it speaks for itself. In fact, the objective of carbon neutrality defended by certain countries, including ours, seems very distant and somewhat utopian... A situation which is not about to improve given the shortages of materials and resources which are are affecting the sector. Sand is very clearly singled out for its overexploitation and the upcoming announcement of its shortage could trigger an unprecedented crisis within the construction industry.

Eco-responsible construction: a complex challenge for insurers

A fact that has been proven for several years now, mass production necessarily has repercussions on the state of our planet: destruction of ecosystems, shortage of resources... With the increase in demand in the construction sector, the sector must organize itself to introduce new sustainable methods. Among the solutions, the reuse of materials is an increasingly widespread technique among professionals to reduce the carbon footprint of each project. Without being miraculous, it offers a resolutely optimistic perspective regarding the democratization of eco-responsible construction within the sector.

However beautiful, the intentions are not enough to make these new methods a reality. Without calling into question their relevance, insurers are having real difficulty insuring them.

Let us take the case of the reuse of materials, considered a non-common technique and therefore practically without or very limited covering solutions; the same goes for the use of wood, due to the lack of control over its storage as well as the risks of fire and wetness inherent to its constitution.

These examples illustrate an implacable reality: sustainable sectors struggle to convince insurers of their viability, which therefore complicates their insurability.

Certainly, increases in insurance prices have an impact on major construction accounts, but it is the craftsmen who are bearing the brunt of them. Without insurance, they cannot exercise, which increases the pressure on their shoulders. In addition to galloping inflation, if the techniques of the future are difficult to access for a majority of professionals, it then becomes complex for the building sector to make its transition. There is no point, however, in falling into a fatalism that is unrepresentative of the efforts made by the construction industry so far, which has decided to rely on sustainable methods to guarantee its future.

Structuring the sector to better ensure it

The low insurability of eco-responsible construction only highlights the failures of a system that lacks guarantees. Alternative sectors, such as reuse, need to be consolidated to demonstrate to insurers the good quality of implementation and the durability of the reused materials. Commissioning control offices for this purpose is undoubtedly an essential guarantee of reliability. In all cases, the more organized the sector is, the more it will allow insurability through the identification of those responsible. Some companies have already taken this direction by agreeing to ensure reuse on small items. A promising start, although still insufficient.

If construction companies strive to perpetuate new sustainable methods, public authorities also have their role to play. At the European level, the upcoming strengthening of ESG criteria via the new CSRD directive constitutes an important step towards the recognition of the company as an economic entity influencing the environment. Its concrete application will have to be closely observed but this position must be welcomed. And even if these changes take time to take hold, sustainable techniques are very present. But will they be adopted by all countries?

Tribune by Mariane Chevalier, Director of the Construction department of Marsh France (LinkedIn).