Modular Construction –

Here to (help) save the world!

What do the UN Sustainable Development Goals, CO2 emissions, social and affordable housing and modular construction all have to do with the survival of our planet? Well, funny you should ask…

At HOW Social Construct, our purpose is to introduce the benefits of precision modular construction to the social, affordable and market housing sector in order to create lasting positive social impact for those in our society who are experiencing housing stress.

We’re going to look at how three key factors intersect to create a significant growth opportunity.

The single largest wicked 1  problem we have on the planet right now is quite simply, how do we save the planet from global warming?

The system that contributed to the problem (industrialisation and the free market) bestowed vast economic benefits on those who participated. The environmental costs however were never borne by those who benefitted (us).

Whether or not you believe in man-made global warming 2, it is the responsibility of each and every one of us to be more conscientious about how we treat our planet.

Conscious businesses approach their markets and industries differently and seek to serve a broader range of stakeholders beyond just financial stakeholders.

If we are to leverage the free market system to develop value propositions which address social and environmental challenges, we need treat our communities and our environment as stakeholders whose interests must be considered.

What are the UN Sustainable Development Goals (SDGs), why are they important and how do they relate to us?

The 2030 Agenda for Sustainable Development, adopted by all United Nations Member States (including Australia) in 2015, provides a shared blueprint for peace and prosperity for people and the planet, now and into the future.

The SDGs are important because they are a globally accepted framework which can be referred to by governments, councils, NGOs, investment funds and the private sector.

OK, so we want to do our share. Where do we start?

As a conscious business working in the housing sector, we started by looking to the Sustainable Development Goals to see which of the 17 goals our business model could seek to address. We identified that with the right design and build processes in place, our social and affordable housing products could achieve both social and environmental impacts which would provide us with yet another valuable product differentiator in the market.

Of the 17 SDGs, we could adapt to and aligned with no less than six. These include…

The Conversation

HOW do we achieve environmental impacts?

SDGs 7 and 11 relate to Affordable Energy and Climate Action. Australia is still significantly reliant on fossil fuels for energy generation. Given that Australian homes produce an average of 7 tonnes of CO2 each comprising 20% of the nation’s annual carbon emissions we assessed whether we could leverage the modular construction process to reduce home energy consumption.

Heating cooling costs account for 40% of an average home’s energy consumption followed by hot water heating at 20%. We looked to the internationally recognised PassiveHouse design methodologies and concluded that our modular construction products were unique in their ability to achieve greatly enhanced thermal performance standards. By upgrading insulation, improving air tightness and incorporating energy recovery mechanical ventilation systems we could significantly reduce, if not eliminate the need to heat or cool a home.

The next step was to address the energy use around hot water heating, so we looked to air or ground sourced heat recovery hot water systems. Despite their higher up-front capital cost, heat recovery systems are an extremely efficient and cost-effective solution over their lifetime. Heat recovery hot water systems can also provide hydronic heating solutions if required.

In addition to the above, and along with a number of other energy saving initiatives we believe we can conservatively reduce home energy consumption by 70%.

Environmental impacts and the market opportunity

In mid-November 2018, AHURI released their report ‘Social Housing as Infrastructure: An Investment Pathway. From this report it is evident that Australia needs 730,000 new social housing units by 2036. 150,000 of the new high density units will be located in metropolitan Sydney and Melbourne.

If our model can achieve a 70% reduction (or better) in CO2 emissions under the proposed model, we believe it may set a new benchmark for all social housing and contribute towards Australia’s commitment to cut carbon emissions by 2030.

If the 150,000 new high-density social housing units built gradually by 2036 as required under the AHURI report, Australia could reduce its CO2 emissions by 7 million tonnes.

Albert Einstein one said “We cannot solve our problems with the same thinking we used when we created them”.

The proviso is however that a company has a fiduciary obligation to provide an adequate or greater financial return at a given level of risk to the financial stakeholders (shareholders).

They realise that inside every problem lies an opportunity and if they are able to understand the cause of a problem then it is possible to solve it.

  1. A wicked problem is a problem that is difficult or impossible to solve because of incomplete, contradictory, and changing requirements that are often difficult to recognize.