January 2025
As an energy- and resource-intensive industry, construction significantly impacts the environment, further contributing to the effects of climate change. Many construction companies are actively working to scale back their impact and become more eco-friendly while keeping costs in check and ensuring profitability.
Eco-friendly and cost-effective practices aren’t mutually exclusive—they’re the foundation of sustainable cost management. It’s all about balance that evolves throughout the project.
Companies are increasingly relying on technology to achieve this balance. Lifecycle cost management software plays a pivotal role by providing the tools that align cost efficiency with sustainability practices. Here’s how it can help:
More Efficiently Managed Resources
Material optimization. Efficient resource management is central to sustainable cost management. This starts with understanding the details: what materials are being used, how much, where, when and how. Careful tracking ensures resources are utilized efficiently, helping to minimize waste—or, even better, eliminate it altogether.
Cost management software demonstrates its value in providing real-time visibility into material usage. Dashboards, IoT sensors and historical data analytics help project teams recognize where materials are being over- or underutilized compared to their planned allocation. With this immediate insight, they can make informed decisions to adjust as circumstances change. The result is more effective material usage, preventing waste and keeping costs within the established budget.
Inventory Management. Closely tied to material optimization, inventory management spans the entire lifecycle of materials—from procurement to storage to disposal.
Since procurement is a major part of the project budget, avoiding overbuying is essential. Efficient inventory management helps reduce storage costs and prevents surplus materials from going to waste, controlling both expenses and environmental impact.
Cost management software streamlines this process. Dashboards use historical data to forecast material needs and provide real-time visibility into inventory levels, ensuring more precise procurement decisions. Once materials arrive, tracking usage and inventory levels enables timely adjustments, reducing waste and avoiding unnecessary stockpiling.
By centralizing data—such as purchase and delivery lead times, inventory levels and pricing—dashboards empower project teams to make informed decisions that optimize budgets and environmental sustainability. With real-time insights, they can actively conserve resources and cut costs without compromising project goals.
Sustainability Compliance and Reporting
Sustainability practices in construction come with the expectation of meeting established standards, whether mandated by regulations or driven by project-specific, eco-friendly goals.
Recognized certifications such as LEED (Leadership in Energy and Environmental Design) or BREEAM (Building Research Establishment Environmental Assessment Method) provide frameworks for these standards. On top of this, stakeholders often demand evidence of compliance and measurable progress toward sustainability targets, adding another layer of accountability
Dashboards and automated reports have become essential for meeting these expectations. Dashboards do more than track projects with real-time metrics—they flag variances that enable prompt corrective actions to keep projects on track. Automated reports go further by simplifying the process of compiling detailed documentation, providing evidence of compliance and demonstrating accountability, resource efficiency and cost performance.
These tools also support transparency, making it easier to communicate progress made on sustainability initiatives to stakeholders, regulatory agencies and the broader community. In the event of an audit, the data they generate ensures projects have the thorough documentation necessary to meet compliance reviews.
Streamlined Procurement for Sustainable Materials
Procurement is evolving beyond traditional cost-conscious material choices. Today, construction companies are increasingly prioritizing environmentally conscious options.
The stakes are high for megaprojects balancing these priorities. Without a robust procurement practice, their considerable material demands risk overordering and partnering with suppliers that fall short of sustainability goals. The result? Significant material waste—and with it, substantial financial losses.
Streamlining the procurement process minimizes these risks by reducing time and cost inefficiencies. Many companies are leveraging cost management solutions with integrated procurement functionality to standardize bidding. This approach simplifies the evaluation, prioritization and management of materials and suppliers that align with project and sustainability standards. Value engineering can also play a role, helping teams identify materials with higher energy efficiency or greater durability, and suppliers offering competitively priced, green materials.
Another key advantage of digital procurement: its adaptability to changes in environmental regulations. It streamlines updates to bid documentation and procurement practices, making adjustments more efficient. Given the years-long timelines typical of megaprojects, having a digital solution plays a vital role in maintaining compliance with evolving sustainability standards.
Cost Forecasting
Naturally, questions arise about how to navigate unexpected changes while safeguarding budgets and sustainability initiatives. Answers can be found with digital cost forecasting.
By leveraging past project data and combining it with current metrics, forecasting can predict probable expenses and risks and enables scenario modeling to assess the incremental impact of different variables. For example:
- Where did previous forecasts flag risks of overspending?
- What pricing patterns emerged?
- How effectively did prior forecasts mitigate material waste and improve resource efficiency?
- At what point might material price fluctuations require re-sourcing comparable, sustainability-friendly alternatives?
With these insights, digital forecasting becomes a reliable decision-making tool. Teams can use the data to identify and implement cost adjustments ahead of time, whether it’s accounting for price instability of emerging green materials or preparing for the costs of new environmental regulations. Proactive cost adjustments ensure that financial objectives and sustainability goals remain aligned, even amid evolving conditions.
Carbon Tracking
One of the most significant threats to our environment is carbon emissions. The construction phase alone produces carbon equal to 30 years of a project’s operation. Reducing emissions across the industry is imperative. However, tracking and measuring them remains a key challenge in meeting corporate and regulatory sustainability goals.
Having a platform that tracks both costs and carbon builds on the accountability of sustainability-minded cost management. It also introduces transparency to actual and forecasted progress on emissions-reduction efforts, helping teams answer critical questions like:
- What are carbon emission estimates across the project lifecycle?
- Where can emissions be reduced while preserving cost efficiency? Are there opportunities to use low- or no-carbon materials? What about onsite vehicles with cleaner fuel options?
- What are the cost implications of carbon reduction efforts, and how can they be integrated into the budget?
Integrating carbon tracking with cost management is a proactive, measurable approach to achieving industry emission-reduction goals while supporting cost efficiency and ensuring corporate profitability.
A Balanced Future
Eco-friendliness doesn’t have to come at the expense of cost efficiency. They can coexist when supported by a proactive mindset and cost management software that spans the entire project lifecycle. Construction companies can meet environmental regulations and strengthen future cost efficiency by integrating the software with sustainable cost management practices—from material optimization to carbon tracking.
Contruent works with construction companies to streamline their sustainable cost management efforts. Our lifecycle cost management software, Contruent Enterprise, seamlessly integrates with our Cost & Carbon estimating tool, automating the process for accurate cost and carbon impact tracking and proactive planning.