Lean integrated carbon financing model for construction industry

Abstract

The construction industry accounts for over one-third of global greenhouse gas emissions, urging the need for sustainable construction methods. However, almost all sustainable construction methods struggle to balance financial returns with environmental benefits. Carbon financing offers a promising solution by providing financial incentives for reducing carbon emissions, making it an environmentally and economically friendly option. Despite the benefits, practical applications of carbon financing in construction are challenged by many inefficiencies, redundancies and non-value adding activities. Lean principles directly address these challenges by emphasising value maximisation for stakeholders and encouraging a culture of continuous improvement. Hence, this study aims to develop a lean-integrated carbon financing model for the construction industry. A mixed-method approach was employed, combining a questionnaire to quantify the significance of financial impact for sustainable construction, with two rounds of expert interviews to explore the sector-specific carbon financing factors and lean integration. Quantitative data were collected from 388 respondents selected through snowball sampling and analysed using random forest regression. The qualitative data were collected from 18 experts selected through purposive sampling and code-based content analysis was employed to analyse the data. The study identified that financial challenges can influence and be influenced by sustainable construction challenges. Furthermore, carbon financing was defined based on the five notions and 4 primary carbon financing methods were identifed and described. The findings also identified 22 benefits and 19 challenges specifically associated with the implementation of carbon financing in the construction sector. The study has developed a comprehensive definition of carbon financing and identified that the best carbon financing method for construction industry would be combining carbon financing methods. A lean-integrated carbon financing model was developed to identify the most suitable carbon financing method for construction projects after validating it through focus group interviews. The research concludes that integrating lean principles with carbon financing can significantly reduce carbon financing challenges and improve adoption in construction. The study contributes to the academic discourse by deriving a definition for carbon financing and identifying sector-specific carbon financing factors, including benefits, challenges, and methods. Application of random forest models for sustainable construction research and potential use of lean principles for carbon financing are also key contributions of the study.