(Pictured left to right) Ian Stacey and Mark Leeson are directors and Archie Payne is a data engineer at consultancy McBains
The ninth anniversary of the Grenfell Tower fire was marked in June. Up to 20 companies are still at risk of criminal charges in connection with the disaster. Yet the culture in the construction industry, famously described by Richard Millett KC during the Grenfell Inquiry as a “web of blame”, persists in some quarters. Poor traceability and record-keeping continue to undermine accountability.
“Each delivery, certification, approval and installation could be recorded and secured on the blockchain”
Meaningful steps were taken to address this through the golden thread requirements, introduced in England in October 2023 to ensure that safety-critical building information is stored digitally, kept up to date and available throughout a higher-risk building’s life cycle.
However, construction remains one of the most complex operational environments, characterised by numerous stakeholders, fragmented communication channels and the often inappropriate transfer of risk.
Many regard this as inevitable, but there is a way to generate reliable records of a material’s full lifecycle. It involves adopting smart contracts – a form of digital agreement enabled by blockchain network architecture.
The concept of blockchain often arouses scepticism. However, it offers an opportunity to address the web of blame directly and increase trust in agreed processes being followed.
Blockchain consists of a series of data containers (‘blocks’) that are ‘chained’ to one another in a way that makes it easy to identify errors and call them out. The technology can provide a verifiable, tamper-resistant record of stakeholder interactions. While blockchain cannot prevent an individual from acting fraudulently, it makes retrospective blame-shifting, undocumented changes and falsified events almost impossible. This level of transparency and traceability is something that traditional construction processes cannot achieve.
How it could work
Smart contracts are the digital agreements made on a blockchain to ensure contractual and regulatory obligations are met. They can address many of the systemic challenges facing the construction industry today, from ensuring traceability of safety-critical materials to automating complex Scope 3 emissions calculations. This would be done by enforcing structured, consistent data capture across the supply chain. Each delivery, certification, approval and installation could be logged automatically and secured on the blockchain. The result would be an extensive, easily searchable dataset that could reduce the time needed to trace an issue from days to seconds.
Walmart provides a well-known example outside construction. In response to food-safety and traceability concerns, the retailer worked with suppliers to use blockchain to trace fresh produce to its source. This dramatically reduced the time required to identify contamination sources.
A similar model could be applied to construction materials such as cladding that undergo a complex lifecycle from design and specification through manufacture, testing, certification, delivery and installation. With the full chain of ownership recorded immutably, any inconsistency could be identified more quickly. Patterns of failure could be detected across manufacturers, certifiers, logistics providers and installers.
This level of traceability is precisely what is needed to prevent the systemic failures that contributed to tragedies such as Grenfell Tower.
It is important that the industry proactively explores how smart contracts could be implemented and managed. This means undertaking pilots and research, and working to formulate, test and build a smart contract over the lifecycle of a project. If a robust and credible smart contract is developed for use in construction, the industry could be transformed into a data-driven ecosystem where responsibility is clear and project control is absolute.
