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Home » Industry News » Building Construction Infrastructure & Development News » The construction sector has one of the biggest carbon footprints in the world

The construction sector has one of the biggest carbon footprints in the world

The construction sector has one of the biggest carbon footprints in the world. It is responsible for almost 40% of global CO2 emissions. The high emissions are not only based on fossil fuel driven energy consumption, also the reliance of concrete or steel as building materials has a very negative impact on the overall carbon footprint.

A new report from Allianz Commercial,, is taking a closer look at a much more sustainable building material: mass timber. 

This material has the potential to be a critical building component for the cities of the near future. It is renewable, comes with lower costs and less  CO2 emissions. But, even if mass timber has so many advantages, there are still risks such as fire, floods, earthquakes or termites that need to be mitigated.

These are the key findings:

  • Sustainable construction: use of mass timber offers a short and medium-term solution for the construction industry to lower its massive carbon footprint. Mass timber emits significantly less  CO2  with around 50% less than concrete and more than 25% less than steel. Furthermore, it is more cost-efficient but as durable as concrete and steel.
  • Growth potential: Although the global mass timber construction market is still a niche market, it has an enormous growth potential. It generated US$857 million in 2021 and is forecast to hit $1,5 billion  by 2031, with a CAGR of 6%
  • Fire as main risk for mass timber: Mass timber is still wood, and fire is the primary hazard concern. Fire is already the most expensive cause of all construction / engineering insurance losses, accounting for more than a quarter (27%) of the value of 22 000 claims analyzed over a five-year period, according to Allianz.

Mass timber reduces construction’s carbon footprint, but introduces new risk scenarios

Mass timber has the potential to be a critical building component for the cities of the near future given the need for the construction sector to reduce its reliance on concrete and steel to lower its  CO2 emissions.

However, as this market grows and mass timber buildings evolve to greater heights, the construction risk landscape will also be transformed, bringing risk management challenges for companies, according to the new Emerging Risk Trend Talk report from Allianz Commercial.

“The emergence of mass timber as a sustainable construction alternative represents a significant opportunity for the building sector to reduce its carbon footprint while also satisfying a demand for a material that is more cost-efficient but as durable as steel and concrete,” says Michael Bruch, global head of risk advisory services at Allianz Commercial. 

“However, in any industry, deployment of new materials or processes can result in new risk scenarios, potential defects, or unexpected safety consequences, as well as bringing benefits, and mass timber is no different. Given this market’s expected future growth, companies should do all they can to develop a greater understanding of their exposures including fire, water damage, repetitive loss scenarios and even termite infestation, and ensure they have robust loss prevention measures in place to combat these.”

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