The digitalisation of the construction and infrastructure sector and its path towards achieving net zero

Technology, Media & Telecoms Focus

The International Federation of Consulting Engineers (“FIDIC”) is widely considered one of the world’s leading construction industry bodies responsible for overseeing some of the most well-known industry suite of construction contracts.Contents

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Law Update: Issue 368 - Technology, Media & Telecoms Focus

The digitalisation of the construction and infrastructure sector and its path towards achieving net zero

Leith Al-Ali
Senior Counsel,
Construction & Infrastructure

The International Federation of Consulting Engineers (“FIDIC”) is widely considered one of the world’s leading construction industry bodies responsible for overseeing some of the most well-known and commonly used industry suite of construction contracts. It has however sometimes been seen as slow to adapt to and address the digitalisation and technological changes, opportunities and challenges facing the construction and infrastructure industry. In recent years the industry body has begun to recognise the growing importance of ensuring the sector is alive to and aligned with the rapid digital and technological advances being made. FIDIC has taken various steps to ensure members and industry stakeholders are better placed to understand and leverage the digitalisation of the sector in order to help address and alleviate industry challenges and concerns. One such area of concern has been ensuring the sector is able to contribute to and benefit from the targeted reduction in carbon emissions and the global drive towards achieving net zero. An increasingly important issue in the Middle East, a region where (on the back of the recent COP 28 conference as well as other climate changes initiatives) there has been a growing desire by governments and industry stakeholders to utilise technology to help reduce inefficiencies and optimise project outcomes in a more sustainable, carbon neutral manner. With the global construction sector considered to be the largest emitter of greenhouse gases and the United Nations estimating that it accounts for approximately 37% of global emissions, it is easy to see why this is such a key area of focus and concern. In this article we will briefly examine some of the measures being taken by FIDIC in order to support the digitalisation of the construction and infrastructure sector and outline some of the ways in which the digitalisation of the sector can help it mitigate project inefficiencies, reduce its carbon footprint and succeed on its path towards achieving net zero.FIDIC Digital Transformation Committee In April 2022, FIDIC established the FIDIC Digital Transformation Committee (“DTC”), a working committee appointed by the FIDIC board comprised of 13 members with sector specific experience and expertise, whose main functions include monitoring and identifying changes in digital technology or techniques that could help future proof FIDIC products and services (including notably the FIDIC rainbow suite of contracts), identifying issues or trends in the digital space that could potentially disrupt FIDIC, its members and the industry and also helping to develop FIDIC’s digital services for the sector. The establishment of the DTC is widely seen as an important step, underlining FIDIC’s commitment to helping industry professionals and stakeholders understand and navigate the growing plethora of information surrounding advancements in the digital and technology space and how best to reconcile and implement these within the industry, including within the context of procuring and executing construction and infrastructure projects in a more sustainable, environmentally friendly manner. State of the World Reports In 2022, FIDIC published its first State of the World report in its Digitalisation series entitled “Digital Disruption and the Evolution of the Infrastructure Sector”, in which it examined the unprecedented pace at which technology has been evolving. More recently in 2023, FIDIC published its second State of the World report entitled “Digital Technology on a Path to Net Zero- Getting cleaner with technology” (the “FIDIC SoW 2023 Report”). Both reports examine important issues and provide recommendations which industry stakeholders are expected to take note of given the growing part that digitalisation, technology and carbon reduction will continue to play in the industry for many years to come. Achieving Net Zero There are various ways in which advances in technology and digitalisation can help the industry decarbonise and succeed on its path towards achieving net zero. Here we explore some of these further, including some of the broader recommendations set out in the FIDIC SoW 2023 Report. Utilising digital and agile systems
To help achieve net zero ambitions, industry stakeholders need to adopt a more holistic and integrated approach to the procurement and execution of construction and infrastructure projects that properly embrace the utilisation of digital systems as an enabler in order to help facilitate change. This includes:

integrating sustainable practices into all aspects of the procurement process, from design through to construction and operation. This also includes procuring materials and adopting systems which help reduce carbon emissions while also maximising efficiency. This is particularly important at the design stage where technology’s revolutionary ability to instill change through sustainable practices can acutely impact the construction of a project and the longer-term operation of a development post-completion;

using data-driven decision making, optimising resource utilisation and integrating renewable energy sources (such as solar panels and geothermal systems) as well as other sustainable practices, into projects; and

using digital, smart and intelligent systems and technology (including the Internet of Things (“IoT”), IoT devices and artificial intelligence) in energy management and asset maintenance in order to help collect real time data with respect to energy consumption and asset performance thus helping identify patterns and trends in energy usage, occupancy and environmental conditions, which can in turn help identify inefficiencies, optimise asset performance and reduce waste.

Stakeholders need to be aware of the importance of deploying agile digital systems, implementing machine-based technologies that prioritise adaptability, flexibility and interoperability to help ensure future-proofing that facilitates sustainable, effective, long-term usage of systems that are also capable of adapting to project requirements and advances in technology, if and when required. This can also include integrating cloud systems that utilise shared developer tool kits which can provide project specific components and sharing of information and analytics to the project team throughout the course of a project.

Additionally the use of such systems can help foster a sense of collaboration between project stakeholders and facilitate communication, alignment, coordination and reduce scope for data errors. This approach can be particularly useful and important on large infrastructure projects where multiple stakeholders are involved (including government agencies, contractors, subcontractors, suppliers, manufacturers and consultants) and where greater interface and coordination is often required thus facilitating better understanding and mitigation of project risks. Maintaining the momentum for change
The construction and infrastructure industry must maintain the momentum for technological change instigated by the COVID-19 pandemic and the move towards a more enhanced, technological, digitally driven approach to procurement and construction, to help further the drive towards net zero. This not only means leveraging remote working practices but also recognising the importance of and allowing for broader stakeholder investment in digital infrastructure such as data management and communication systems that are better equipped to help document, respond to and navigate project issues. This can also enhance digital resilience and mitigate the impact of disruptive events, ensuring project continuity and execution in a timely, efficient and sustainable manner. Cyber security
An increasing number of ransomware and cyber-attacks on the construction and infrastructure sector have in recent years led to significant disruption and safety breaches (including in the United States and Europe). This has heightened understandable concerns as to the robustness of digital systems and their ability to protect critical infrastructure from external cyber security threats. As digital infrastructure systems become more developed, interconnected and integral to the execution and operation of large-scale infrastructure projects, cybersecurity concerns will need to be quickly and robustly addressed in order to provide the industry with the comfort it needs that comprehensive, robust systems and cybersecurity measures are in place (including for example, strong access controls, regular updating of software and employee training) to protect and minimise the risk posed to stakeholders and users from hackers and other external cyber threats that are adopting increasingly sophisticated methods to gain access to sensitive digital infrastructure systems and data. Embracing change
Of course achieving net zero by utilising digital and technological advances alone will not be possible unless, more fundamentally, there is a concerted effort to address some of the negative misconceptions around the increased use of technology and digitalisation of the industry. This includes the perceived negative impact such advances might have on the industry workforce. Some have espoused the view that it risks paving the way for significant redundancies and a whole-scale reduction and/or replacement of skilled workers in countries and industries where high unemployment is already a key underlying economic concern. The reality is that although certain roles may well become less utilised, the digitalisation of the industry should provide opportunities for workers to learn, develop and upskill into other areas. This will however require sustained investment and support from the industry, in education initiatives and the training of workers into other fields. In any event, unless the industry openly embraces the technological advances being made and the longer term social, economic and environmental benefits it can have, it potentially risks holding onto traditional practices that will only further alienate it from its objective of achieving net zero.Concluding Remarks As digitalisation and technology evolve at an unprecedented pace, it will continue to play an increasingly pivotal role in the evolution of the construction and infrastructure industry. Consequently, stakeholders must ensure they are well positioned to take advantage of and leverage these advances in order to help the industry succeed on its path towards achieving net zero. FIDIC, as a leading industry body, will no doubt continue to play an increasingly significant role in this space by helping to facilitate this transition. By embracing change and adopting a more holistic, collaborative, integrated and engaged approach towards digitalisation and technology that is instilled from an early stage in the construction procurement process, stakeholders and the industry at large will be better placed to overcome and respond to decarbonisation challenges, thereby helping create a cleaner, healthier planet, not just for our generation, but for generations to come.

For further information,
please contact Leith Al-Ali.

^{Published in}^{May 2024}