De-risking environmentally friendly construction

The real estate and construction sector is exploring options to make buildings more environmentally friendly. However, new concepts and designs can have a negative side-effect introducing fire or property risks that need to be addressed to improve building resilience and secure the intended environmental benefits.

There is increased pressure from stakeholders (building owners, regulators, shareholders, consumers) to improve the environmental sustainability of buildings. Constructions can impact the environment in many ways depending on the type of building and the consequent life cycle (design, construction, operation, refurbishment, end of life). The environmental impacts include the ground, energy, CO₂ emissions, materials, waste, water, and effluents.

”In Europe, buildings are responsible for 36% of the CO2 emissions generated during their construction, use, renovation and demolition and up to 40% of the total final energy consumption”

Sustainable buildings are intended to minimise the consumption of resources which is also related to the construction material used. Concrete, for example requires more energy compared to wood. However, the increased use of timber and combustible insulation products may also impact a buildings’ resilience to fire. Sustainable buildings are only greener if fire or other property losses are avoided. If a building burns down, it might generate as much CO2 as during the building process. The loss of a sustainable building can generate plenty of CO₂ not only from the fire but also from resultant rebuilding activities. There is, therefore, a trade-off required between building design and property risk.

Examples of potential fire exposures from sustainable construction:

  • Construction and insulation products may be combustible, increasing the potential for fire spread

  • New methods of construction may introduce new routes of fire spread (such as combustible voids)

  • New technology may introduce new sources of ignition or generate fires which are difficult to control

Considering the fire risk at an early stage of a project is not only necessary to comply with regulatory requirements, but also to help find acceptable insurance cover during and after construction and to minimise environmental impacts. The consequence of a fire loss can involve much more than just the fire damage only some of which would be insured.

Consequences of a fire loss:

  • Fire damage (to building, equipment and stock)

  • Non thermal damage (smoke and water)

  • Human injury

  • Carbon dioxide, other gases (greenhouse; toxic), particulates

  • Water use and fire water run off

  • Business interruption

  • Loss of employment

  • Reputation / share value

  • Environmental impact of restoration (new materials, transportation, labour costs etc.)

It does, therefore, make sense to look for ways to reduce the fire risk of buildings while maintaining the environmental sustainability credentials, thinking beyond life safety to also consider building resilience effective property loss control seeks to avoid property losses and, should they occur, keep the losses as small as possible. Considerations may include several aspects, including:

  • Construction & compartmentation

  • The hazards of the occupancy

  • Protection (including fixed fire protection such as sprinklers, fire detection, fire water supply, emergency response, risk management procedures)

  • Exposures, such as neighbouring buildings

  • Business interruption and resilience

Reducing the property risk

Throughout the lifecycle of a building, consider how the building design, construction and operation can help ensure property protection and business resilience, assessing the potential causes of loss and developing risk control measures. An example might include locating high risk equipment away from combustible construction or within a low value detached building. Similarly, the potential magnitude of possible property fire losses could be evaluated, and measures implemented to keep losses small (such as effective compartmentation and installing fire protection such as sprinklers).

The provision of sprinklers is a key consideration. Sprinklers can sometimes be perceived as expensive to install and maintain for a fire event which ‘might never happen’. However, when correctly installed and maintained, they can be extremely effective in limiting fire losses and damage to the environment, reducing carbon emissions, reducing the use of firefighting water and can help avoid costly restoration of buildings and equipment.

A common misconception is that all the sprinklers activate in a fire. Building sprinklers are designed to activate individually based on temperature, hence a fire can typically be controlled by only a few sprinklers. Without sprinklers, the fire brigade would likely use much more water and therefore ultimately cause greater water damage.

Applying robust property loss control principles can help avoid fire and other property losses and therefore make the building more environmentally sustainable. Property owners should engage in early consultation with brokers and insurers when planning new buildings or changes to existing buildings. Investment in risk control measures to recognised property protection standards can help improve property risk quality, increase the risk appetite of underwriters and help the environment.

For more details on our products and services, please visit our Risk Control page (opens a new window), or contact:

Mark Middleton, Risk Management Executive

T: +44 207 933 1632


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