Contractual Demands for Sustainable Outcomes Predicted to Become Norm

THE RESULTS of a survey of construction professionals on their experience of legal and contractual practice over the past twelve months have been published.

The survey, carried out by RIBA and supported by NBS, was completed by over 950 clients, contractors and consultants between January and April 2022, forming part of the 2022 Contracts and Law Report.

Sustainability Criteria

The survey found 43% of respondents were involved in one or more contracts that included ‘expected sustainable outcomes’ and 32% that included ‘measurable sustainability criteria’.

23% of those surveyed said that ‘operational performance criteria’ had become a contractual requirement, while 21% referenced ‘embodied carbon criteria’, and 7% said they had been involved in a contract that included the UN Sustainable Development Goals.

Increased Collaboration

The survey also showed 57% of respondents adopted collaboration techniques on some or all projects, with almost a quarter (22%) adopting collaboration techniques on all projects. 63% said that collaboration techniques reduced the number of disputes, and 61% said they improved the delivery of the client’s objectives.

The survey also found the proportion of respondents being involved in contractual disputes fell again from 33% in 2018 to 27% this year.

Sustainable Future

Adrian Dobson, RIBA Executive Director Members

Adrian Dobson, RIBA Executive Director Professional Knowledge and Standards, said: “We can expect to see demands for sustainable outcomes grow significantly over the coming years. From government departments and agencies, from project funders and financiers, and through tighter legislation and standards – the contractual expression of sustainable outcomes will become progressively mainstream.

“I am therefore encouraged to see growing appetite for contracts that include sustainability criteria. Across the industry, we need to be designing, specifying, procuring, managing and measuring sustainable buildings now. Sustainability isn’t just aspiration and altruism. It’s increasingly the bottom line.

“The strong adoption of collaborative techniques and declining number of disputes is also encouraging, particularly during such an unpredictable and volatile period, demonstrating the resilience of the sector. It also stresses the importance of construction contracts that facilitate collaborative behaviour and clearly delineate areas of responsibility.”

Adrian Malleson, RIBA Head of Economic Research and Analysis

Adrian Malleson, RIBA Head of Economic Research and Analysis, commented: “From navigating the complexities of Brexit to the uncertainty of the Covid-19 pandemic, the past three years have been particularly tough for the construction sector. Project delivery has been risky and – as these findings suggest – it’s through increased collaborative working and mutual support that the sector has continued to deliver, and the number of those pursuing dispute resolutions has declined.

“The findings support the view that the bedrock of a successful project is a clear, well understood, proportionate, timely and agreed contractual framework. It’s only through accurate quantification, description and allocation of cost and responsibility that expected outcomes can be realised by and for all parties.

“Ultimately, to continue to meet the challenges ahead, the sector must work collaboratively, project by project, on a foundation of clear contractual understanding and agreement.”

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