Celebrating an extraordinary achievement 

My Lord-Lieutenant, distinguished guests, ladies and gentlemen, good morning!

May I begin by expressing what a great honour and privilege it is to be speaking with you at such a prestigious event. As you know, we’re here today to celebrate Willmott Dixon being awarded not only one but two Kings Awards for Enterprise: the Promoting Opportunities through Social Mobility Award in 2023, and the Sustainable Development Award in 2024.

This latest accolade marks the company’s fifth King’s Award—an extraordinary achievement for a family-run business that began humbly and is now the UK's leading independent construction and property services company.

Julie, centre, joins Willmott Dixon colleagues in collecting the King's Award for Enterprise

In fact, these hard-won accolades provide a timely opportunity for us to take a moment to reflect on the critical role that construction plays in shaping our economy, our communities, and our environment. Willmott Dixon’s success stands as a testament to the resilience, innovation, and determination required to transform lives and safeguard our planet while delivering brilliant buildings for customers – so there is much that we can learn from it.

The truth is, while the topic of sustainability is undoubtedly being talked about a lot in industry circles, few companies are yet showing the leadership and courage required to overcome the significant challenges it presents, or readying themselves effectively for the market conditions of the future.

Why might that be? Perhaps because, until recently, the construction industry in the UK has been very successful at accommodating a growing population, and delivering more housing, buildings and infrastructure every year, without having to radically transform its management and operational processes. Between 1998 and 2022[1], the total value of public sector construction output increased by 400%, and that of private sector construction output by 200%. Last year (2023), the construction sector contributed 6.3% of UK GDP and employed 2.1m people.

Looking to the future, cost inflation is forecast to moderate with tender prices anticipated to rise faster than costs next year meaning the outlook for 2025 is promising. But those construction firms that assume conventional business as usual will enable them to capitalise on such growth are at best misguided, and at worst suicidal. Because the construction sector, like all others, faces a number of global and local transitions that will necessitate a radical transformation of its business model and modus operandi.

Some of the most pressing of these transitions are driven by the multiple environmental crises we face. These days, we’re all acutely aware of climate change, nature and biodiversity loss, resource depletion and air, land and water pollution. In fact many of us are now feeling the effects of these in our every day lives even here in the UK – whether it’s our homes being flooded, our children’s lungs being damaged, our rivers and oceans being full of sewage, or our local woods being destroyed for infrastructure projects... what we may be less aware of are the dangerous tipping points that are being reached as human activities exceed the Earth’s carrying capacity.

Just two weeks ago, the Planetary Boundaries Science team led by Professor Rockstrom in Berlin announced the launch of the Planetary Health Check[2] - a first-of-its-kind scientific report on the health of the Earth’s vital systems that serve as humanity’s life support structure. The key findings of this first health check are clear: planet Earth is far outside the safe operating space for humanity and is rapidly approaching a state of red alert, serving as an urgent call to action for governments, industries, and individuals worldwide to address these planetary challenges.

This is reflected in the World Economic Forum’s 2024 Global Risks Outlook which confirms that, within the next ten years, the top four most severe risks facing humanity are extreme weather events; critical change to Earth’s systems; biodiversity loss and ecosystem collapse; and natural resource shortages.

Tackling built environment emissions, and dealing with embodied carbon

Now some might say what has that to do with construction? And the answer is… a whole lot!

Today, the built environment contributes 37% (15 GtCO2e) of all global greenhouse gas emissions. Without changes to methods of construction, by 2040 it will have used the whole of the 225 GtCO2e global carbon budget that should last until 2050 if we are to limit warming to 1.5 degrees. And the numbers for the UK are no less stark. The UK Green Building Council predicts that business as usual approaches will reduce built environment emissions by only 60% by 2050, falling well short of the now legally enshrined national net zero target.

Today, around 70% of UK built environment emissions come from in-use energy needed to heat, cool and power our buildings. But as we get closer to 2050, and as our electricity grid continues to decarbonise, the embodied carbon emissions associated with the extraction, manufacture and transportation of construction products and onsite construction processes becomes ever-more significant. In fact, by 2030 they overtake operational emissions as the single biggest source of the problem for UK construction. So it’s not surprising that building regulators across Europe and the wider world have started updating the regulations to include whole life carbon emissions of construction works in their scope.

"Embodied carbon emissions associated with the extraction, manufacture and transportation of construction products and onsite construction processes is significant. In fact, by 2030 they overtake operational emissions as the single biggest source of the problem for UK construction."

And while our upcoming Future Homes and Buildings Standards have yet to feature upfront embodied and whole life carbon, London is already requiring mandatory life cycle assessments on all projects over a certain size and countries like France, Denmark, Finland and Sweden suggest that this is very much the direction of travel.

This will have stark implications for UK construction and real estate. For instance, when targeting whole life carbon reductions, the idea of retrofitting 28m homes with carbon intensive insulation materials to reduce energy demand, or indeed of building 1.5m new homes without first considering how to repurpose the empty floorspace that’s abundant in the market becomes ludicrous.

And that last point about repurposing space is also a game-changer for this industry. Because construction is the single biggest user of natural resources and the largest waste producer in the UK economy. Each year, the construction industry uses over 400 million tonnes of materials and produces around 165,000 tonnes of waste – enough to fill a 60,000 seater stadium – every day.

Hence the urgent imperative to find new and creative ways of maximising the usage of buildings and materials we already have today – embracing more circular design principles of refurbishment, repurposing, deconstruction for material recovery, design for disassembly, prefabricated offsite modular construction, alternative material usage and construction material passports etc. With cases like the proposed demolition of the iconic M&S building on Oxford Street hitting the national headlines, it’s not far-fetched to assume that before too long there might be a ban on demolition of existing buildings (except those deemed structurally unsafe) and that all new construction will need to be capable of future disassembly and material recovery. Buildings will effectively be viewed as material banks for future usage.

The role of people

Of course, the challenges ahead are not all environmental. Because construction is an industry that relies heavily on people – who else is going to deliver the multiple projects on site? To meet forecast growth, an extra quarter of a million construction workers will be needed by 2028. Add to this the changing nature of skills required as we transition to a net zero carbon and nature positive construction industry, and there’s no doubt that labour and skills will become a critical success factor to any UK construction firm’s future prospects. So finding creative ways to access new pools of untapped talent – such as training up and providing employment to disadvantaged groups who desperately need the opportunity and increasing diversity – becomes a clear case of enlightened self-interest.

There are many more insights and trends that we could refer to as evidence of the speed and scale of change facing the construction sector. But perhaps the most convincing is the change in customer requirements itself. When Willmott Dixon launched its sustainability strategy Now or Never. Our Decisive Decade back in 2020, the targets it set out for 2030 seemed enormously ambitious and far more stretching than its peers were committing to. I myself joined the Board as a Non Executive Director in June 2022 at which time there were still a few within the business who queried the logic of setting such a high bar, particularly given the perception that customers didn’t care for sustainability nor did they wish to pay for it.

COP26 moved minds

But the truth is that, after COP26 took place in Glasgow in November 2021, huge momentum picked up in the industry particularly around climate action. Such that today, Willmott Dixon’s pipeline of Passivhaus, net zero carbon, and/or BREEAM outstanding projects is worth over 1.4bn – having grown 854% in the four years since the launch of its sustainability strategy. And now social value – another area where the team has acted early to become a market leader - is worth as much as 30% of some bids. Having been a pioneer in the adoption of such standards, and taken early steps to invest in the right skills and expertise, Willmott Dixon is now in a position to demonstrate outstanding value to its customers and convince them that it’s the partner of choice because it shares the same vision and values as they do.

"Willmott Dixon’s pipeline of Passivhaus, net zero carbon, and/or BREEAM outstanding projects is worth over 1.4bn – having grown 854% in the four years since the launch of its sustainability strategy."

Willmott Dixon's response

Like other corporate sustainability leaders before it, Willmott Dixon had to take some risks in setting its North Star ten years out. Yet already this has proven both appropriate and commercially sensible given the rapid speed of change in the industry as well as worldwide. Some of the stand-out results achieved through Now or Never are seriously compelling and, because they’re externally verified by Bureau Veritas, we know they paint a true picture of progress:

• Willmott Dixon’s carbon emissions in 2023 were 80% lower than they were in 2010. And since 2012, the business has saved £16million in energy costs by focusing on carbon reduction.
• The company has also made great strides in reducing construction waste by 57% from a 2012 baseline, saving itself £34m over 11 years in reduced skip and materials costs.
• In 2023, 2.2 million miles were driven in electric vehicles leased from the firm’s award-winning salary sacrifice car scheme, saving the business £90k in mileage reimbursement.
• And last year for the first time, every single new project in 2023 had a co-created customer social value plan building on Willmott Dixon’s reputation for delivering social impact in the communities where it operates.

Three key areas Willmott Dixon stand out

That’s not to say it has been an easy journey so far. But I will point to three important qualities that I believe have enabled Willmott Dixon to succeed where others before it have failed on sustainability.

• The first is PURPOSE: Having been in business since 1852, Willmott Dixon has the concept of stewardship in its DNA. But it was the late Chairman, Peter Willmott, who in the company’s report and accounts from 1978 mentioned this long running sense of responsibility and service to both the society and the environment. Peter’s vision and values coined the principle of ‘purpose beyond profit’ for the firm and this is now enshrined into its core identity. Willmott Dixon’s purpose is to deliver brilliant buildings, transform lives, strengthen communities and enhance the environment so our world is fit for future generations. Having stated these so explicitly as its reason for being holds the firm to the fire in terms of making the right choices even in times of difficulty.
• The second is CULTURE: Ultimately all sustainability achievements are the result of team work – and nowhere can this be more true than in a complex and dynamic construction firm with a myriad of projects starting and completing on site every day all around the country. Embedding new management processes and operational procedures requires excellent communication and staff training, and a culture of trust and empowerment. This is about winning people’s hearts and minds, supporting them along the way, and celebrating their achievements. Which is why accolades like these Kings Awards mean so much to the morale of Willmott Dixon’s people.
• The third is PEOPLE: this is a people-centric business, through and through – and one that treats all people whose lives it touches with human dignity. So the firm recognised early on that sustainability is not just about the environment. It’s just as important to go above and beyond to ensure construction operations have a positive impact on people’s lives and livelihoods. So the business is as focused on fuel poverty as it is on energy efficiency. It puts the community’s needs front and first when planning and executing construction projects – involving them from the outset and aiming to create places that they will enjoy using well into the future. And it doesn’t just upskill its own staff, it goes out of its way to find, train and recruit those who have been long term unemployed because they need a leg up in the system.

Looking ahead

But for all the wonderful achievements it’s important also to be humble. And no company can pretend that it has this sustainability thing sorted… the milestones ahead will be tougher to reach, and the business must be prepared to move its own ambitious goalposts even further out. Some of its biggest challenges lie in its extensive supply chain, on whom it’s so heavily reliant for both materials and service quality. Finding better ways to source and leverage data to manage these risks will be key in future years.

At the end of the day, the holy grail for the industry will be to reposition construction as a regenerative economic activity. This means not just delivering less harm, but positioning the built environment as a core function of its surrounding ecosystems, with buildings contributing energy and food, capturing water, sequestering carbon, cleaning the air, treating pollutants and reclaiming the nutrients from waste. Fast forward another 10 to 15 years and this should be the reality we are working within.

So it’s important to remember that, together with its customers, supply chain partners and communities, Willmott Dixon is not just building for today. It’s helping to build a better future for generations to come. A legacy over which both the Willmott and the Dixon families over the years should feel incredibly proud!

References

[1] https://www.ons.gov.uk/businessindustryandtrade/constructionindustry/datasets/constructionstatisticsannualtables

[2] https://www.planetaryhealthcheck.org/