Environmental Considerations in the Swedish Building and Construction Industry: The Role of Costs, Institutional Setting, and Information

Abstract

Despite increasing evidence that being an environment-friendly company not only benefits the environment but also makes long-term economic sense, the transition to a more sustainable society is extremely slow. This is true of the building and construction industry as well. At a strategic level, environmental issues have received more attention with the establishment of roles such as environmental managers and implementation of advanced environmental management systems. However, adoption has been slow in the absence of a holistic approach to environmental challenges, partly reinforced by a perception that giving more than the legally required level of environmental consideration will only add to costs without corresponding financial benefits. This raises the following question that the study aims to answer: What is the most important factor influencing decision makers’ in adopting environmental considerations? To this end, it analysed questionnaire data collected from decision makers in the Swedish construction industry along with an in-depth case study of a specific building and construction company. The results show that decision makers perceive informational and institutional constraints on the adoption of environmental considerations. Lack of information is perceived as the biggest obstacle to environmental considerations. If information and knowledge about clients’ and end users’ financial benefits from adopting environmental considerations need to be exploited, they have to be supported by contractual forms that discard a short-term focus on the investment costs of a building in favour of a focus on long-term operational and maintenance costs and benefits.

Keywords: Building and Construction Industry, Decision Making, Environmental Considerations, Sustainability, Sweden

JEL Classification: M10, M14, L21, Q50