Timber offers a great opportunity for construction firms to reduce their carbon footprint, but insurers need reassurance that fire risks are managed appropriately.
As greater attention and responsibility are drawn to the environmental, social and governance (ESG) impact of corporations and individuals, there is arguably a more significant push now than ever to break the mould and look for sustainable alternatives that comply with ESG standards.
The current built environment accounts for 45% of total UK carbon emissions, with 27% from domestic buildings and 18% from non-domestic buildings, according to a report by The Institute of Government and Public Policy (opens a new window) (IGPP). The UK construction sector has expanded its horizons over the past few years to cater for this increased quest for sustainability. A survey among the top three architects, engineers and contractors shows that the biggest trigger for green building came from client demands for modern methods of construction (MMC). (https://www.corporate.carrier.com/Images/Corporate-World-Green-Building-Trends-2021-1121_tcm558-149468.pdf)
One common way developers are navigating MMC is by looking to timber frame construction, which refers to any method of building in which the primary structural material is timber. Student housing, apartment blocks and schools are increasingly being built using timber. Whilst this use of timber construction is relatively new in the UK; it has been established in the US and Canada since the 1970s and has provided significant benefits to embracing it.
The challenges
One of the notable benefits is the time it takes to build a structural frame out of timber. Traditional methods such as concrete and steel can take up to several weeks and, in some instances, months to make the skeleton of a building. Timber may need only a few days, especially when everything can be prefabricated off-site and delivered on-site for assembly. The Black and White Building in Hackney is set to be the biggest timber frame development in the UK when it completes in 2023. The project leader Graham Turner said: "The frame went up in 16 weeks with six men, and you don't have a concrete gang or steel fixers. We've had many compliments from local businesses about the lack of noise". Article - www.building.co.uk/buildings/the-new-black-and-white-building-a-clear-case-for-timber/5115027.article
Whilst this will vary depending on the scale of the development and where the timber has been harvested; generally, the cost of a timber frame development is often cheaper than a steel framed building, especially now with the increasing energy crisis.
Given the ecologically sound and ESG compliant credentials of timber as a building material and ongoing efforts to comply with the Paris Climate Agreement, the governmental backing for this construction method is rising through the Timber in Construction Innovation Fund as it helps increase the volume of carbon stored in the built environment. The fund encourages the construction sector to look at further ways to innovate timber products, supply chains and ways of working with wood to strive toward a net zero strategy.
Despite timber's advantages and the massive appeal it has worldwide; there is still some hesitancy within the UK insurance market to adopt MMC. This is partly due to a lack of experience when comparing UK insurers to their US counterparts and the perception that there is a high risk of combustibility which could cause attritional losses within a development.
Whilst this perception of high combustibility has been negated slightly as insurers have become more comfortable with the use of cross laminated timber (CLT), reducing the overall combustibility of timber, and increasing burn times, some insurers still see the timber element as a no-go zone.
Recommendations
Ongoing insurer involvement will require a process of both developers and their brokers thoroughly educating insurers and demonstrating that the benefits and strengths of using timber as an MMC significantly outweigh the perceived disadvantages. This can be achieved through the use of case studies within the UK and also through historic insurer loss data from the US and Canada, including lessons learnt. This will not only help building confidence among insurers but also ensure that the appropriate information is provided at the quotation stage of projects. Further, this will help making sure that the policy language is clear, especially when it comes to the storage of material, whether this is on-site or off-site, as well as fabrication, delivery and on-site development. It is equally important that developers and their brokers continue to evidence the best risk management processes and techniques throughout the lifespan of the development, from quotation to completion, such as adhering to the Joint Code of Practise on the Protection from Fire of Construction Sites, adequate training and also embracing the use of risk surveys to further benefit best practices.
For more information, please contact Cameron Owen or Steve Higgins directly. Alternatively, you can visit the Global Construction Practice page here.
