The business of accelerating sustainable urban development in Canada

Printable version

About the project

Given the rapid pace of population growth, urbanization and hence construction and development, businesses within the built environment industry play a critical role in ensuring a more sustainable future. Transformative and innovative changes in how neighbourhoods, districts and even cities are designed, planned and built to meet mounting social and environmental concerns is critical, and yet our understanding of the role of the business sector in sustainable urban development (SUD) remains elusive. To address this issue, we have engaged in a comprehensive review of the empirical literature on business and SUD, presenting a synthesis of our findings, an evidence-based theoretical model and implications for policy, research and practice.

Key findings

This model provides a framework that situates built environment businesses as both affected by top-down, macro-level factors such as governmental legislation, incentives, power and control, as well as influencing more bottom-up, meso-level dimensions such as cross-sector partnerships, experimentation and community engagement. It also highlights the importance of establishing the business case, mitigating risk and prioritizing sustainability knowledge and learning at the company level, as well as the leadership visioning and championing roles individuals within the built environment sector can play. Moreover, we discuss the paradox of scale and time in SUDs, where urgent change is required yet difficult to implement in practice. Specifically, our multi-level, multi-stage analysis found: 

• Macro level (national, regional and municipal governments): A stabilization and harmonization of legislation, regulation and policies across and within governmental departments over time is the greatest lever in accelerating private sector involvement in SUDs. Coupled with financial (and non-financial) incentives, and standardized sustainable building certification processes, these top-down mechanisms can work to mitigate the perceived business case risks of engaging in SUDs.
• Meso level (networks, communities and companies): Despite their complexity, cross-sector partnerships and other community engagement processes are also effective means of alleviating the business case risks associated with sustainability experimentation at the neighbourhood or city scale over time. Within the construction and development industry, however, a persistent knowledge gap about sustainable building design, financing and construction principles remains. In combination, these factors contribute to powerful inertial forces in this sector that favour simpler, less costly and faster developments. Increased training and education, as well as greater clarity and specificity regarding sustainable building requirements and their social and environmental impacts, are therefore required.
• Individual level (leadership): Innovative developers and other built environment sector companies nonetheless play a critical role in championing visionary projects through the concept/bid, design/plan and construction phases. These forward-looking developers seek out opportunities to learn and incorporate lessons from more advanced projects to craft sustainability visions with local partners. They are also more adept at creating new collaborative platforms in concert with macro-level stakeholders to advance sustainability objectives. In conjunction with learning and development, innovative and visionary leaders must also tackle perceptions regarding the business case and risk associated with SUDs to propel bottom-up sustainable change in this sector moving forward.

Policy implications

Legislation, regulation and policies set by national, regional and/or municipal levels of government directly affect the ways in which the private sector is involved in SUDs. For example:

• Having more clear, consistent, standardized, rigorous and harmonized governmental policies in place for SUDs, along with performance labels in line with national carbon emission reduction goals, has the potential to encourage the construction and development sector to adopt more sustainable procurement and building practices.
• A wide range of financial (e.g., grants, subsidies, taxation allowances) and non-financial (e.g., simplified permitting processes) incentives can be used to entice increased private sector participation in SUDs by bolstering the business case for sustainable development and mitigating the risks associated with more sustainable construction.
• Municipal governments can support and ensure the success of cross-sector partnerships in developing sustainable urban developments by including broad stakeholder groups—including from the built environment sector—in long-term sustainability transition plans for cities or municipalities from the outset. 
• Increasing training and education in relevant environmental building techniques and providing greater guidance regarding the sustainability impacts of construction and development are required to address lack of expertise and knowledge sharing practices within and across the construction and development industry.

Further information

Read the full report

Contact the researchers

Dr. Daina Mazutis, Associate Professor of Strategy and Endowed Professor of Ethics, Responsibility and Sustainability, Telfer School of Management, University of Ottawa; daina.mazutis@telfer.uottawa.ca

With research assistance from:

Lauren Sweet, Graduate Research Assistant, Institute of the Environment, University of Ottawa; lswee084@uottawa.ca

Guy Yuri Shteinman, Graduate Research Assistant, Institute of the Environment, University of Ottawa; gshte090@uottawa.ca

Date modified:

2022-02-08