Central London’s tallest mass-timber office building, The Black and White Building, is open. Here’s why this design-led workspace specialist is committing to building in timber.

Can you tell us a bit about TOG and The Black and White Building?

I set up TOG (The Office Group) in 2003 with my co-founder Olly Olsen. Our aim, back then and still, is to improve the way people work by providing design-led, high-quality flexible workspaces. We now have 72 buildings in top locations across the UK and Germany, totalling around 3.1m sq ft.

The Black & White Building is our latest development, which, from the ground up, is one of the tallest mass-timber office buildings ever built in central London, comprising just under 40,000 sq ft.

Why is The Black & White Building so important for TOG and sustainable architecture generally?

We’ve always had a strong awareness and commitment to sustainability. Our second building in King’s Cross in 2004 had a green roof, solar panels, greywater recycling and sensor lights. So we committed early and since we’ve focused in sensitively retrofitting and refurbishing, a far more sustainable approach to development than demolition and new build.

For The Black & White Building however, we’ve broken with tradition and chosen to build from scratch. And if we’re going to build new, we had to push boundaries and aim for the most sustainable construction method possible.

In terms of sustainable architecture in the UK, this landmark six-storey mass-timber building represents a proof of concept and demonstrates that timber is the preferable option. It delivers an industry benchmark for sustainable commercial construction.

Our hope is that it will prove you can build better and that it will inspire and encourage the wider development community to adopt carbon-minimal construction methods.

Why did you choose to build from scratch?

The site was previously home to a 10,000 sq ft building that we painted black and white, hence its name. This provided workspace for several small creative businesses in the area, but the fabric of the building was deteriorating and not fit for purpose. At the same time, we had a waiting list for our offices from the local market, so it made sense to provide something better and bigger to meet that local demand.

We had inherited a planning consent for a conventional scheme that just did not seem appropriate for the area or the audience. We know Shoreditch, this street and the community, having worked opposite this site for years at our head office. So we believe we have a strong sense of what will work for people who want to be in Shoreditch.

Who were your project partners?

Created using renewable materials and highly innovative construction methods, the building was constructed in partnership with sustainable design experts Waugh Thistleton Architects. We met Andrew Waugh when I was on a panel at a conference with him, discussing sustainability. We connected and his passion for building in timber was infectious. Andrew has also lived and worked in Hackney for 30 years, so we felt this added another layer of authenticity to our approach.

What role does structural timber play in the building’s design and construction?

There are timber buildings in London but most have a traditional steel frame and concrete core. Here, everything above ground is timber.

I became convinced of the benefits of using timber, both environmentally and for those who would use the workspace. Once we saw it was possible and understood the advantages over traditional construction, The Black & White Building was an ideal opportunity to champion timber construction throughout.

We turned to cross-laminated timber (CLT) and laminated veneer lumber (LVL) – high-performance wooden materials that are rapidly renewable, highly durable, easily recyclable and less waste-generating than more common building materials such as iron, steel and cement.

What environmental credentials does structural timber bring?

The Black & White Building creates 37% less embodied carbon than a comparable concrete structure, and serves as a long-term carbon store for 1,014.7 tonnes of CO2 equivalent (55% of the building’s total) in the timber structure.

A total of 1,774 trees have been used to make the core structure – a combination of beech (227 trees) and pine and spruce (1,547), harvested from certified, sustainable forests in Austria and Germany. For a sustainable forest to regenerate the quantity of wood used in the construction of The Black & White Building would take 137 minutes – in other words, you can grow enough to construct a building in less time than it takes to bake a loaf of bread!

Does using structural timber offer any other benefits?

Yes absolutely. It means we can build cleanly and quickly, with the timber components engineered to slot together. The Black & White Building took 14 weeks to assemble the wood section compared with 37 weeks for traditional methods. What’s more, the timber can be taken apart and reused, closing the circular loop.

CLT is also significantly lighter and easier to transport than conventional building materials such as concrete and steel, which means that fewer deliveries are required to bring the necessary quantities to the construction site. This not only represents a carbon-reduction in terms of logistics, it also makes building in dense urban areas a more efficient, less disruptive process.

What role does timber have in the design of offices in the future?

It’s visually beautiful, yes, but beautiful also in what it contributes to the future of construction, showing the industry that building in a more sustainable way can and should be done. It will help businesses support their ESG and sustainability agenda too.

It has never been more important to develop techniques and approaches that deliver buildings for a better world. Innovative construction processes and sustainable materials, like those employed at The Black & White Building will form a central part of the sector’s journey to net zero over the coming years.

The insurance claims advocates’ view

Roger Flaxman is the Chairman of Flaxman Partners, insurance claims advocates, dealing with complex claims and claims that get into dispute.

Here is his thinking as to why now is the time for timber.

I started in the insurance industry, in fact, insuring timber buildings in the 1970’s. Most of this was in Scandinavia and northern Europe, some of it is in America and that was my basic training. Things have moved on in timber building since then. During the 1970’s there was a major change in the law, in this country, which gave rise to a class of insurance called ‘professional indemnity’. I was in at the ground floor of that and was the architect of some of the compulsory insurance schemes which were put together for the Law Society, accountants, architects, chartered surveyors and many others. I have had a career in the insurance industry, London market and overseas, where I have seen humongous numbers of construction related insurances. I’ve seen it from different perspectives, not just from the perspective of the developer, but also from the perspective all the professions. The construction industry is, by definition, a group of 20 or 30 societies, associations, professional bodies – organisations all of whom quite rightly are proud of what they do within their circuit. They are like lots of guilds. They have knowledge, they have got skills, they have professionalism. The problem is that even with all the technology and intercommunication they have, it is very difficult for those different birds, of different feathers, physically to get together and collaborate. It can be done, but it is difficult. All these organisations have different interests.

I have worked for all the professions and certainly all the trade associations in the construction industry. In all my career I have never seen them collaborate in a way that is focused enough to say to the insurance industry, together, ‘this is the way we are going do it’. The insurance industry has to insure these little parties independently, whereas it could sit back and say if you could come together and be a bit more collegiate, it will make it easier to insure them. It is chicken and egg, which party is going to move first! Recently I have been speaking to the Chartered Institute of Building and their view is very much that this is what ought to happen. Our ongoing discussions between them and the RIBA and probably the RICS are, if we can have meaningful discussions about what needs to change. Fundamentally it is two things. Regulations, not to be tighter and supervision has got to be much better, i.e., we have got to bring back the clerk of works and we have got to have a structure of building where it has got to be better from the regulations required, because if an insurer is going to say I will insure you, he has got to satisfy his shareholders that he is making a prudent, underwriting decision. At the moment they can’t make a prudent, underwriting decision to insure something they don’t understand and can’t control.


What changes need to be made to insure structural timber projects?

The insurance industry’s concern about timber is that it burns, but so will everything else at the right temperature, absolutely everything! The point is this that whilst it might burn more readily, if it burns to a cinder, then you have got a clear site and the point about ‘our loss ratio at the moment on steel and glass is 20% and it could be 100%….’ Well, just change your rating mechanism! Just acknowledge that it’s a different dynamic. With all the knowledge we have got, the science, the mathematics, the economists, the actuaries, there is nothing that we can’t, as an industry together, price. We’ve got to have the will to want to do it. If you say to an insurance company,  have you got the will to do? Their answer is going to be, even if I have, I can’t afford to within three years because we wouldn’t be able to satisfy our shareholders with the profit!

We can’t make a change and keep profitability at the same time. The tank is too big and that’s why I think what will happen is that something will come out of where we are going, which means that the traditional market will be able to sit back and wait and see how it goes and then they’ll come in and support it when they have had time to wash through their need to sustain their shareholder value.


What is a better model for insurance moving forwards?

One of the things we really need to try to avoid is lots of different insurances applying at the same time, with different wordings, with different cultures that differ. Ideally, we have got to get to an insurance model which is based upon the project, particularly big ones, because it is illogical to have one contract between the client, the developer, all the others and yet dozens of contracts of insurance amongst all the people that have undertaken that they will be insured. What I know, as an insurance practitioner, is that those insurances can be so different, as one between the other, that you could ask yourself what value have they got? Some of them may lapse, some of them may be in breach, they can have insurance, but it doesn’t mean the party holding it isn’t in breach and very often that is what happens – that causes another delay.

Ideally what you want to look at is a way of saying, if we are going to have sustainable building and sustainable insurance you have got to be able to match those two things up front. That means possibly changing the way that the insurance is attached to the building. Somebody is going to be listening and asking is he talking about project insurance? Not as we’ve known it, but, possibly yes, in a new format. That is what I think we have got to articulate. I worked with somebody back in the 1980s/90s who had this vision, but it was too early and he was flattened. It was just too difficult then because we don’t want to go there. It was an American organisation and they got it right, spot on, but there wasn’t the appetite to change from what was, at that time, a flourishing market.

In November 2022, the Time for Timber team headed to Manchester Piccadilly train station to raise awareness and promote the use of timber as a low-carbon building material by handing out trees to passers-by. The giveaway was an enormous success, capturing the interest of the general public who were quick to support the message and campaign.

Capitalising on COP27

The timing of the campaign could not have been more appropriate, coinciding a mere week before the COP27 UN Climate Change Conference in Sharm el-Sheikh, where countries from around the world came together once again to try and form a plan to tackle climate change.

The UK has already set itself some pretty ambitious targets of reaching net zero by 2050, and if this goal is to be realised, the carbon output of the construction industry must be addressed now. The increased use of structural timber represents the best opportunity for making that important transition to a much more carbon efficient and sustainable method of construction, and the giveaway focused attention on this fact.

Public reaction

The Time for Timber team noted that the general public were incredibly eager to discuss the campaign and hear how building with timber offers the best opportunity to reduce the carbon output of the UK construction industry. It was also refreshing to hear that so many people were already very aware of the climate change issue that the world faces and how important it is that we address the negative impacts immediately.  Manchester Piccadilly had a footfall in excess of 20million in 2021, so there were plenty of people who took notice of the tree giveaway.

The campaign was covered by many media outlets which helped to further spread the message that Time for Timber sends. Additionally, Time for Timber’s social media channels and website enjoyed heavy traffic on the days surrounding the campaign, further increasing the reach of the campaign and showing how it sparked interest.

Time for Timber’s cause

Time for Timber’s overarching foundation, is to educate and promote the use of timber as a construction material as it presents itself as a truly vital solution to the ongoing climate crises. If the UK is to build more homes, schools and offices in a way that supports the UK’s commitment to net zero by 2050, timber construction must be increased.

There is a real risk that if immediate change isn’t implemented, the net zero goal for 2050 will not be met, and the adverse effects of climate change will continue to worsen.

To find out more about Time for Timber, visit https://timefortimber.org/take-home-the-future-of-construction/

The construction industry has clearly recognised the part that timber will play in achieving net zero, but what of insurers and investors?

Market research shows there is a growing interest in seeing environmental, social, and governance (ESG) principles being applied by construction professionals to projects driven by their clients.  The use of timber in construction is a fundamental part of the solution.

“Increased use in Wood in Construction will be required to permanently remove carbon from the atmosphere, in order to offset remaining residual emissions in the UK and achieve Net Zero by 2050.”
Climate Change Committee, 6th Carbon Budget, December 2020

The Benefits

It is now clear that achieving Net Zero by 2050 is a core objective for the Government

As a major contributor to carbon emissions, the UK Construction
industry has a key role in achieving Net Zero 2050

The use of correctly designed and engineered timber solutions
is a key driver in the delivery of Net Zero 2050

A design-led approach is crucial to successful risk management
where timber solutions are used

The property investment market is starting to demand low to net zero
carbon timber buildings

The Hackett Review will have a profound and positive impact on the
competency of the delivery of buildings in the near future

Implementation of additional risk management via quality programmes
assures stakeholders involved in providing insurance cover for timber construction

You can find out more about the benefits of structural timber for the insurance, financial, and construction sectors here:

The Economic Benefit

In the wake of the Paris agreement, a rising number of large investors now seem highly alert to the investment risks of global warming. As of 2020, this group seems to recognise that drastically cutting greenhouse gas emissions represents good business sense. Delaying action on emissions will only mean more radical intervention is needed in the future at a greater financial cost, and with larger impacts on society. Plus, by taking action now, companies can plan to achieve long-term, sustainable economic growth from a low-carbon economy.

There is little debate that climate change will dominate our lives and economies in years to come. Recent announcements from the likes of the World Economic Forum, the Bank of England, and leading blue chips like Microsoft, which demonstrate that climate risk has moved centre stage into the world’s most influential boardrooms only further the point.

To this end, the world’s largest companies now forecast nearly $1 trillion at risk from climate impacts. Conversely, the same companies have identified $2 trillion in opportunities from investments into sustainable business areas, such as low carbon technologies. Therefore, for the business community, climate change has become a thing of now and not a thing of the future. Across modern boardrooms, daily discussions focus on how companies can meet climate challenges, as well as make the best use of any potential opportunities.

However, making the most of these opportunities requires foresight and investment. To this end, financial institutions, banks, investors, and insurers must understand the risks they face to move to the next stage and build for the future. There is a wide range of timber engineering solutions commonly used in the UK. As the UK’s leading organisation representing the structural timber sector and associated supply chain companies, the STA works to influence legislation and regulation, supporting the collective objectives of the structural timber sector. Connecting construction professionals, we support and collaborate with members to showcase the many benefits of structural timber.

What do Insurers & Lenders need to know?

As the use of engineered timber products increases, there is an ongoing debate across many sectors, from designers, contractors, building owners, and users, right through to the insurance sector. As insurers are being asked more often to look at timber-based schemes, there is a requirement to evaluate the insurance premium requirements against the differing risks to those of concrete and steel frame structures.

There are many risk factors that insurers must consider when underwriting a structural timber construction both at the build stage, through completion and into occupancy. Many of these risks may be common to all types of construction, while others may stem from a lack of experience or thorough understanding of the technical details as this is seen as a relatively new method of building in the UK.

This new approach to building, using materials such as Cross Laminated Timber (CLT), also does not fit into the long-established construction classes and therefore there is a comparative lack of data to help insurers when underwriting these types of buildings. A wealth of performance data and guidance in the use of structural timber can be found through many industry bodies, including The Structural Timber Association, Wood Campus, and Wood for Good.




To promote the use of timber as a low carbon construction material Time for Timber handed out trees in Manchester Piccadilly station in November. England alone needs around 340,000 new homes annually, and if the UK is to meet its ambitions for achieving net zero by 2050, we must take action now.

To find out more about the tree giveaway and the Time for Timber campaign, visit here.

The architect’s view

Tim den Dekker is an architect and a director at Lignum Risk Partners, a consultancy that provides business and risk management consultancy services to the broad UK construction market with a specific focus in the sustainable building sector.

Here is his thinking as to why now is the time for timber.

I am an architect and I have been working as an architect for about 12 years. I also previously trained as an actuary. I have experience in management consultancy and risk management for major global financial companies. My expertise as an architect is in healthcare buildings, educational buildings and public buildings.


How can we reduce carbon in the construction process?

Reducing your carbon can be done in a number of ways, constructing lightly, reducing the amount of materials in your buildings, but also choosing the right materials. Timber is naturally one of those choices because timber sequesters carbon – so carbon locked up – and it’s a renewable resource and, if done properly, it allows you to reduce your carbon footprint in the construction industry.


What are your concerns in reducing carbon in construction?

One of the concerns that I have is that there appears not to be a level playing field between timber, steel and concrete, where the insurance industry has given the green light to steel and concrete, but has given the red light to timber!


What are the issues with insuring timber construction projects?

I see that that there are problems and not just with the insurance industry. There are problems with the construction industry which have been exposed by Grenfell and there are problems with the UK building regulations which, for example, are not aligned with the interest of insurers. The UK building regulations set the standards for protecting life safety or are calibrated to achieving life safety standards so that people can get out of a building alive and safely in case of a fire, for example. Insurers want to protect their property, so if you build to the minimum regulatory standards, you don’t have an adequate amount of protection, so the conversations also need to be held with regulators as to clarifying what they mean by the regulation.


How do we move forwards?

We need to build to a better standard than just building regulations. We need the industry to come together to develop those standards and come to agreement on minimum standards, in this case, for timber constructions and those standards would not just be for design. They ought to be also for construction, monitoring the actual process of putting buildings together; the design is followed and that minimum standards are upheld and we clearly need standards for maintenance of buildings. Once the building is in use, one of the major hazards is moisture ingress and the companies that manage buildings and their workforces need to have adequate training to identify potential problems and be authorised to resolve them quickly and those resolutions may often involve insurance companies, so that process also requires attention to make sure that happens swiftly.


How does the industry come together to resolve this?

Industry coming together requires everyone to appreciate there is a common goal and understand what the impediments to them achieving insurance at commercially attractive terms are. At the moment, there are a number of areas where there are a lack of standards, in design, in construction and in maintenance and use. I don’t think there is a clear appreciation across all players in the industry that all the areas that need to be considered. I think there is a lack of appreciation of where the risk lies. There appears to be tremendous emphasis on fire and fire risk. Fire risk catches the headlines, but the rest that don’t catch the headlines, such as moisture ingress and damage from moisture. We don’t see that, but I understand that tallies up and causes the majority of losses of insurance companies, so we need to understand the risks across the spectrum.


How does the construction industry improve its relationship with insurers?

There is very little difference between the approaches of fire engineers in the UK to timber and fire. I understand they generally agree 90% of their message is in alignment, but I understand it is where there are differences, those get picked on and I think the industry needs to present itself as a unified face to the outside world, whether it be to the insurers or to the regulators and to clearly state the message about the safety of timber construction and demonstrate that and quantify that.


How hopeful are you that we will see the increased use of structural timber in construction?

I am very hopeful that we will see more use of timber in construction simply because there are so many people looking at it now. We are seeing the timber associations, the various timber trade bodies, putting more attention into the weak points and identifying where the blockers are. We are seeing the fire engineering profession converging and understanding that a clear and consistent message needs to be made and we are seeing the need for government to cooperate more, to provide a regulatory environment that encourages sustainable building products; and of course, we have alternative risk transfer mechanisms, alternative means for accessing capital to protect companies financially through alternative risk transfer solutions. I understand that those have historically been used in similar situations where industries are stressed by the lack of insurance. So, I’m quite confident that a solution exists.


Thank you for visiting us to find out more about our Time for Timber campaign.

Enjoy planting your tree!

Why are we giving away trees for planting?
Through the “Time for Timber” campaign, we are taking action now. We’re giving away trees to raise awareness through the media and the public, that by planting and growing more trees, we can capture and store more carbon.

Our aim is to educate and promote the use of timber as a vital, natural solution to building more houses, schools and offices in a way that supports the UK’s net zero commitments.
Responsibly harvested timber, sourced from managed forests, offers a renewable building material that is kinder to the natural environment.

Now is the time to increase the use of timber as a construction material across the industry to safeguard the environment, today and tomorrow.

How is timber used in buildings?
Timber can be used as structural elements in the construction of homes, offices, schools and hospitals.

Did you know that in Scotland, timber frame is the preferred construction method for 83% of new homes? In England we are encouraging housebuilders, developers and homeowners to consider using more structural timber.

Timber framed homes look just like any other – you may even live in one! They can be built faster and offer exceptional energy efficiency.

Why is timber important?
Chances are that you’ll know the UK Government has set an ambitious target to achieve Net Zero carbon emissions by 2050.

One way to do this is for the construction industry to embrace the use of lower carbon building materials such as timber.

The Government supported this approach in its 2021 Build Back Greener strategy, which outlines policies and proposals for decarbonising all sectors of the UK economy to work toward the 2050 goal.

Right now though, there is a real risk that the UK won’t achieve this target unless we ALL take action.

Why is timber the answer?
Trees capture, or sequester, carbon as they grow. Once felled, they store carbon within them. This is called embodied carbon. In fact, roughly one tonne of carbon is stored for every cubic metre of timber used. This makes timber a great option for reducing the carbon emissions of a building. Timber is a sustainable material that is replenishable and can be recycled.

Thanks for getting involved!

For more information on how to care for your Nordmann Fir tree, visit: https://timefortimber.org/care-for-your-tree 

Check out some of the interviews we’ve done with leading industry experts here, to understand more about the world of timber construction.

The developer’s view

Mario Ledermann is an internationally experienced technical leader at Lendlease, a global organisation that advocates the increased use of timber in construction.

Here is his thinking as to why now is the time for timber.

Why are you so passionate about the use of timber?

I think it really help us in dealing with a number of challenges we have as a society. Clearly the net zero agenda is something that is affecting us all. It is not just certain companies in certain industries it is everyone, all the way to individuals. I believe timber can really help us in driving a better world, in the context of reducing emissions and climate change, but also it has a number of benefits that could help us in dealing with some of the main challenges the construction industry faces, such as productivity. Being one of them least productive industries in 20 years, we haven’t improved productivity much and we need to grow the number of buildings we build since the population is growing. Timber enables offsite manufacturing, advanced manufacturing automation, which in turn will help us in becoming more productive. In the same context, dealing with quality and safety is something that timber would enable as well. So, for me, it is a combination of a number of things; climate change, but also dealing with some of the main challenges the construction industry faces.

What is Lendlease’s experience with the use of timber?

Lendlease is an international real estate and property group. We combine the disciplines of investment, development and construction and we operate in four different regions and 17 different gateway cities. Our experience with engineered timber started in 2010 when we looked at developing what, at the time, was the tallest residential building built out of engineered timber in the world – Forté apartments in Melbourne, Australia. Since then, we have built more than 20 buildings around the world using engineered timber: buildings like this one, the IQL Pavilion in the middle of London.

Why is Lendlease such as a positive advocate for the use of timber?

Sustainability is at the heart of Lendlease’s purpose and has been since day one. The creation of social environmental value is very important to us. More recently, in 2020, alongside our commitments to be a 1.5 degree aligned company, we set very ambitious targets from the perspective of the reduction of embodied carbon and carbon emissions in general. We are set to be net zero by 2025 on the scope one and two. That means the fuel we burn and the power we use will be at absolute zero by 2040. That is scope one, two and three, with no offsets. We believe these targets, alongside the nature of our global business put us in a leading position to decarbonise the construction sector. However, we know we cannot do this alone and we don’t have all the answers yet. We need to collaborate. We need to collaborate in decarbonising carbon intensive materials like concrete and steel, but we also need to work in enabling and accelerating the use of timber.

What is the typical usage of structural timber in one of your schemes?

We aim to use materials where they add the most value. In the context of the use of timber, since we work in multi-storey construction, the type of wood products we use is mainly engineered timber. Materials like cross laminated timber or glulam and a mix or a combination of them is mainly what we’ve been using around the world. As an example, the tallest building we have built to date is a building in Brisbane, 25 King Street, which is a commercial building where the use of timber was mainly in the form of cross laminated timber floors and glulam columns and beams. We also use different combinations in other parts of the world, like in the US, we have built a number of hospitality buildings where the main use of the timber being cross laminated timber in floors and walls.

Is the use of timber client driven?

Our clients and investors are increasingly interested in how we are dealing with whole life carbon and embodied carbon, so we need to consider the use of materials when developing the building. So, for example, we’ve introduced the use of low carbon steel, as well as materials with an increased recyclable content like aluminium, but we are also enabling the use of low carbon technologies that exist today like timber; that is what we do in terms of materials. Buildings like this one have a reduced amount of embodied carbon of more than 40% and that is something that clearly attracts investors and clients.

Where do you see timber fitting in with the government’s Build Back Better and Build Back Greener priorities?

When you look at the Build Back Better priorities and the talk of levelling up the whole of the UK, it supports the net zero transition, but also supports the vision of a Global Britain. Timber in construction provides us with an opportunity to substitute carbon intensive materials like concrete and steel for a lower carbon solution – today. It also enables innovation in construction and property to the use of kit of parts, or product-based approach, to design and construction into advanced manufacturing and automation.

How do you see the future for structural timber in the UK?

I believe the future is bright for timber. I think the reduction of emissions globally will still be the main driver for timber being enabled into construction. In time all the other benefits associated with productivity, quality and safety will become visible as well. So, I think there is a bright future. However, I think it is very important that we have an industry that collaborates and deals with these challenges around unfamiliarity with the technology, but also the development of the right guidance to ensure that the needs of, not just society, but key value-chain stakeholders, like developers, insurers and investors, are met.

The independent risk consultant’s view

Oliver Schofield is a Director at Lignum Risk Partners, a consultancy that provides business and risk management consultancy services to the broad UK construction market with a specific focus in the sustainable building sector.

Here is his thinking as to why now is the time for timber.

What is your background?

I have been in the alternative risk transfer and alternative financing industry since the mid-1980s. I specialise in putting together new capital solutions for hard to insure, or uninsurable risk exposures. I’m also interested in the whole timber space because we all have a responsibility, as businesses and individuals, to continue to reduce our carbon footprint and to drive towards net zero wherever we can.

What is the issue with the use of timber in construction on the UK?

The problem that we have in the UK is that there is insufficient knowledge when it comes to be able to price and underwrite the risk of timber in construction in the most appropriate manner.

Does the lack of data on timber performance restrict underwriting on timber construction projects?

No, it doesn’t. From the point of data and information there is a wealth of data all over the world where organisations have successfully used timber in construction for many, many decades. That data exists within architectural firms, within engineering firms, within overseas insurance and reinsurance firms; it exists in risk consultancy firms and in construction consultancy firms, so the data is there. The problem is that the data doesn’t relate to activity in the UK and trying to ensure that that data is transferred into a UK market environment, where underwriting can fully understand it and be able to therefore analyse it and price risk accordingly, has proved to be a major stumbling block.

Why is there a disparity in how the UK insures timber as opposed to other nations?

Part of it is due to the geographic differences that we see around the world. The risk exposures of timber building in warmer countries is going to be very different from the risk of exposure for timber building in different climates. Obviously in this country we have much more rain than in other locations and that can therefore cause problems with ingress of water. If you look at places like Australia, which typically doesn’t have as much rain as we would in the northern hemisphere, that risk is less pronounced. However, I think the other issue is that the typical model of underwriting is that data, when it is analysed, underwriters will try and analyse that from a position of, if that were to be in this country and therefore that data that we are gathering from other countries is less relevant to the activities that clients wish to undertake in the UK.


What needs to be done to increase the knowledge of timber performance?

There has been some detailed research undertaken by the large professional reinsurance market and they now have quite a useful databank of knowledge and information that they would like to be able to use to be able to provide solutions to the issue of using timber in construction in the UK. I think the second part of that is that we need to get the industry to come together to be able to share knowledge, share information, share data, share experiences so that from a pure UK perspective we can then really build that shared databank that everybody can access for the benefit of all and for the benefit of being able to push the use of timber in construction to a much higher level in this country.


Who will drive the need for the industry to come together?

I think the drive for getting the industry to work together lies at the endpoint and the endpoint is the increased use of timber in construction and therefore being able to achieve carbon net zero goals at different organisations have laid down for themselves. As we are all swimming in the same direction towards the ultimate goal, that should drive a desire for collaboration across the various strands of the overall industry. We should see the collaboration from the insurance markets, the financial markets, the reinsurance markets, which would also see collaboration from the developers, from the contractors, from the architects, the engineers, everybody involved in that space and certainly what we’ve been trying to do at Lignum Risk Partners for the last year or so is to start that conversation; to start that coming together, where people can share ideas in a very open way, but obviously having a certain amount of respect for confidentiality of their own businesses. Finding a common problem such as the unavailability of insurance for the use of timber in construction, we believe is going to help garner that effort, garner those organisations to come together to try and find a solution and therefore be willing to share their knowledge for the common good.


Can you give an overview of the Alternative Risk Transfer market?

Historically, the alternative financing market has been very supportive of industries that are facing problems when it comes to be able to find capacity at economically attractive prices and from a coverage perspective, broad enough cover for the exposures that they face. Examples that I’ve personally been involved in over many years have been putting together solutions for organisations that suddenly found themselves with very large asbestos exposures on their balance sheets. Now the traditional insurance market had drawn a line under renewing insurance policies with asbestos coverage, understandably so, but that doesn’t mean that that organisation suddenly no longer had that exposure. They needed to find a solution for that. There have also been some very noticeable examples where industry groups have come together to form a new capital solution. We’ve seen that in the North American railroads sector, we’ve seen that in the European pharmaceutical sector, we’ve seen it in the worldwide energy sector, so there are many examples where this has been successful and what we’re looking at is how can we build a new capital solution for the construction sector, specifically where they are using timber in their construction?


What is the difference between Alternative Risk Transfer and the traditional insurance market?

Typically, the alternative risk transfer and the alternative financing market are looking to support organisations, or industry groups, where there is an issue from the point of view of being able to provide capital, provide capacity, in the traditional methodology. We all know that there are many exposures that businesses face that cannot be classified as pure insurance risks and that is because the insurance market doesn’t see them as being risks that they can quantify, risks they can identify, risks they can then analyse and build a solution to. When we move into the professional reinsurance market and the financial markets, they are very keen to develop relationships with organisations who have identified and quantified those risks and are looking at a way of being able to finance those risks over a period of time. Now looking at what we were working on in the timber space, we are going to be partnering with private equity firms, capital markets, reinsurance markets, who can look at the industry and the good performance in the industry and see that actually what they are doing is for the benefit of the construction industry as a whole, but also the benefit for the climate as well and therefore they are prepared and interested to be able to use their capital to support that initiative, because they can have that relationship with the individual buyers to really get into the guts of what that organisation is doing and therefore have a much better view from what the potential for loss and potential for risk is.


What is the key to making this work for the timber market?

The exposures that businesses and industries face around the world are very challenging. The key to be able to find that new capital solution is being able to, first, fully understand what the drivers are for what that industry is looking to achieve in the short, medium and long term. Secondly, being able to understand what the risk exposures associated with those drivers are. Thirdly, being able to engage with the alternative financial market to encourage them to be able to use their capital to deploy for the creation of a new solution. These things take time. If they were readily available on the shelf, they wouldn’t be alternative, so we need time, we need consensus, we need that community of interest from various sources coming together to build that solution.


How far has your approach progressed?

We have been engaged by a group of large developers in UK to put together a feasibility study that will assess and analyse, first, the exposure those organisations face. Secondly, how they are going to drive towards carbon net zero by the increased use of timber in construction in the UK and thirdly to see whether there is a solution that can be delivered to them by accessing the alternative risk financing markets. We started that project and we are midway through it. We are engaging with those individual developers to understand fully what their demands, their needs, their blockers, their challenges are, so that we can build a solution that is appropriate for them around that.


How confident are you that we will see the increased use of mass timber in the UK?

If we start at the end of the process, which is finding a solution to enable those organisations to be able to increase the use of timber in their construction, then I’m very optimistic. We have had conversations over the last year or so with various capital providers who have all given us a very positive response to what we are trying to do, so I remain very optimistic about it. Putting aside all those outside influences such as the availability of capital, which we absolutely do believe is there. Ultimately, we all must work together to be able to find that solution to enable organisations to increase the use of timber. It is not a question of can we do this? It is the fact that we must do this.

Philip Callow is the founder of Mass Timber Risk Consulting Ltd (MTRC), a company to looking to accelerate the use of mass timber in the built environment.

Here is his thinking as to why now is the time for timber.


You founded your company MTRC ‘as a direct response to the frustrations our clients were experiencing around the insurability and lack of knowledge regards to the use of mass timber in our built environment.’ Can you outline the frustrations as a construction insurance broker and underwriter?

The main one is, as a as a broker, you turn to insurers to find the answers. Those answers can be what do you need to know, what you want to know, what should you know and what what availability of cover is out there? I think that one of the problems that I saw was that no one had an answer to that and, for the most part, if there was an answer, it was always going to be negative. So, because of those two years of being an underwriter, specifically looking about the insurability of mass timber buildings, I realised that there was a better way. That way was just stripping everything back down to the bare minimum and saying OK – who has a role to play? What is that role? What information can they bring to the table and putting that together in a way that leads to an equitable outcome for all parties.


Who are you trying to work with to achieve this?

Predominantly my work is with the developers and to a lesser extent with the insurers and brokers. Insurance brokers and underwriters need to know the details of the project, so that they can price it so that the broker can argue on the insurance on their client’s behalf, for the best possible deal, but ultimately to come to a fair, equitable landing on what that policy should be. You can’t do that unless you have the information. What we have noticed, certainly as an underwriter researching this, was that the information you need to price that risk is not forthcoming if you go about things in a traditional way. The normal way that you would build a concrete and steel building doesn’t work for mass timber. The assurances, the certainties, or perhaps the questions that need answering for an underwriter to price the risk correctly and to give a level of cover that is relevant to that project – that information needs to happen much sooner. There is a theme that will be coming out about early engagement and I say it is about early engagement and the quality of that engagement. That part is information and part of it is how you present it. Put simply, that refers to breaking down of how we do things. It is how we used to do things when I first started my career. We had a hard market and it would take many months, including international travel in some instances, to speak to underwriters around the globe and get them on board with a major infrastructure project. Like, for example, Crossrail. They are big, the values are huge, the engineering is a challenge, but there’s no difference for mass timber building, the engineering is a challenge. The safety of that project is a challenge which is why you need to break it back down, get the information presented at the right time to the underwriters to get an equitable outcome.


Which stakeholder community, in your opinion, is the biggest barrier to the adoption of mass timber and how do you manage this?

Without a shadow of doubt, it is the government – we are trying to manage that. There is some excellent lobbying work I started with The Alliance for Sustainable Building Products (ASBP) and is now continuing with Built by Nature. I know that an excellent group of stakeholders across insurance, across architecture, across engineerin, fire risk engineering is working towards lobbying the government to press for support. I think it would be unfair to say that the government is not willing, I think they are willing. We saw that from the outcome of COP26 and we’ve seen that from the strategy going forward. But I think they could do a lot more. I think that that is the biggest barrier.


How do the insurance brokers that you work with view the use of mass timber?  

I think they all want it to come, like most responsible members of society. I think the better ones look at it as a challenge, just like I mentioned how Crossrail would have been a major challenge from an insurance broking perspective. Any broker that enjoys what they do loves the challenge of taking something, which on the face of it looks difficult – close to impossible – and using the information available and helping the clients and the stakeholders in that project delivery team present that information in the right way. It is something you must create. That information that they haven’t been asked before and they need to provide it. I think they really do view that as a great challenge. However, I think they are rightly, incredibly frustrated. The response to UK insurers is as negative as it is. We work in a global insurance market here in London and, unfortunately and fortunately, what happens around the world is felt in London and therefore the UK insurance market. I know brokers that are being approached by clients who are multinational who are finding no problems, or limited problems, in securing extra insurance in North America, or Europe with ‘insurer X’, but when the broker approaches ‘insurer X’ in London for a UK project it’s an immediate ‘No’. I think everyone can see a frustration with that, but if you’re in the market, if you are practising broker, it is incredibly frustrating because there is no message to your client that will help saying that ‘insurer X’ won’t do it, but your client is saying ‘well that’s rubbish they’re doing it for me in North America’. That is madness and I think there is something that the insurance community, particularly the carriers really need to look at, because it is unfair that the elements, the physics, the chemistry around the topic of mass timber is the same in North America and Europe, as it is in the UK. That is something that I think is up there with government strategy around this is the second largest barrier to this.


What do insurers need to know to help them feel secure in insuring structural timber construction projects?

Data is key here and it almost sounds obvious, but insurance is based on knowing how something performs. With mass timber we simply don’t have the volume, whether it be in North America or Europe, or anywhere else, that gives insurers the comfort to not have to delve much deeper into the risk dynamics and the parameters of a particular project. That makes it very hard, because fundamentally that lack of data means a lack of projects which means it’s not paying your bills, it’s not meeting your targets, it’s not going to change your business in any given year. So, then you must put a lot more effort into looking at that risk and underwriting that risk, when you’re struggling to make a profit doing the traditional type builds and across both property and construction. So, it is a very challenging landscape for an insurer just doing the day job. So, inputting something that has no data that is obviously a volatile material, in so far as we know timber burns, producing a great strain on underwriters to be able to look at that. In their defence, they do need that data and it isn’t there. Testing is one area that people like to look at. There is a lot of work going on around that, the Structural Timber Association are going to be the conduit for the results and open source format, but one can test for a particular outcome and I think that that is where there is a little bit of a chicken and egg – we need more of these things being built, we need to prove that certain typology, or methodology, or system when employed, is safe. But that takes time. Perhaps we don’t have that time now, not if we’re going to meet our net zero aims.


What should the construction industry be doing in relation to these insurers?

Everywhere you go, when you start talking to the people who design and build these projects, you can tell there is brilliance and excellence. No one sets off in the morning to go. “I’m going to mess up today, I’m not going to do my job to the best of its ability.” When you start scratching beneath the surface, the wealth of knowledge and expertise from people who are prepared to learn, who want to learn, which I would like to think is the vast majority, the engineering and architectural community; what they’re learning and what they know is fantastic. What they are not doing is sharing that knowledge. Not from a “I don’t want to share” perspective, but with insurers and with their brokers. Every time I’ve asked the question as to how do you do this, they’ve got the answer and every time I’ve said, “why aren’t you telling?” – “Well, no one’s asked!” I accept that it is up to an insurer or broker to ask, but perhaps that’s where you need to guide them, you know more than anyone. Your experience on how to rectify issues, your experience on how to control moisture, your experience on how to rectify damage, this is all golden information that needs to be shared with insurers. Every time we have asked, when it’s gone wrong, give us examples of how it has been fixed, the walls come up. I totally get confidentiality, but we have got to be all in this together. Every constituent part needs to play their bit to move this forward. I think the construction industry needs to get better at telling us how good they are. We are very quick to judge and say how bad they are, but there are all sorts of things that they are doing that can demonstrate their quality. I think that it is important, but patience is required, which has not been something that they have needed in the past when it comes to purchasing insurance. That goes back to the idea of early engagement. Just selling their story and being prepared to be open and being able to say, “we don’t know that and the fact that we know we don’t know means we’re going to find out.” That’s super reassuring from an underwriter’s perspective because that gives you comfort that you are working with people who are going to solve a problem and solve in a logical and right way.


You make it sound so easy…

It is very easy. I think that is why this is really got under my skin and several other people’s skins, is because it is easy, but we’ve all got to do something a little bit different and that is the difficult part. It is like getting up early to go to the gym, when you know you are overweight – you know what to do, you are just maybe not going to go and do it! Until you get used to going and doing it, which is hard at the beginning, then it becomes second nature and then it becomes easier. Then you can maintain that food throughout the life of whatever you’re doing. That is why I think several of us, in this area, are so frustrated because we can see that just little tweaks to how you go about doing things and everyone will go on that same journey with you. There will be hiccups, there will be losses, we know that. The insurance market has no problem with paying losses, but they have massive problems with paying losses when you have not done your due diligence, when an underwriter has not done what he could have been reasonably expected to have done to be prudent. That is where things need to happen differently and that is where developers, architects, engineers need to really start opening up and say that we will take you on that journey, because we will learn as well.


Does the UK’s attitude to mass timber differ from that of the rest of the world? If so, how and why?

Yes, I think it does. I think that Grenfell really changed the UK’s perception. It is such a shame because what was fraudulent workmanship that led to what should have been a robust engineered solution, if it had been erected correctly, to prevent fire spread. I think that sadly and ironically, given it was man-made materials that led to the fire spreading, it massively pushed back and for the right reasons, that we must ensure these buildings are safe. Any building is safe, but surely if we can ensure quality of workmanship, we can avoid these issues. If we can ensure testing and performance is adequately measured and that when it comes to mass timber, we can look to other other geographies for that. It is a real shame that we are in this situation, particularly given our need to reduce our CO2 emissions, I think that is the biggest issue we have here. We need to look at the supply chain as well. We don’t have a robust timber supply chain in the UK to match our mass timber ambitions. We look to Europe and Scandinavia for that. They have plenty and we have supply chain issues in general now, but I am sure that we all know they will pass. That doesn’t necessarily help, give that we haven’t got that home grown nature. I should caveat that in the US, they have an unbelievably well-funded timber lobby group, that they are used to building out of, what we would call, frame in the insurance world, which is really four-by-two stick built. They are also used to them burning down, a lot, certainly during construction, which doesn’t help, by the way, that there are significant losses every six to 12 months in the US market, but they have volume and data. There is enough premium. The market knows that these things happen, so again, we have the Grenfell issue, which is entirely right to due process and understanding that would prevent it from happening. We have a supply issue. Whereas, conversely, go to Scotland and Wales there’s a lot of timber being used, a lot more than I think a lot of people realise. Then we have the wider money that somewhere like the US or Scandinavia will use, whether it be government incentives, or whether it be just the commercial sector.


In your time in the industry has the market improved in the adoption of mass timber?

Yes, in the UK absolutely. When I started the underwriting journey, a couple of years ago, on mass timber research we found that from a risk perspective there were some excellent work already done. The prime one is the 16-steps to fire safety and that’s a direct result of events and learnings. It is a great example of how we learn from our mistakes. That’s meant that, from a construction perspective, it was a long journey for us to launch the UK’s first mass timber construction insurance facility. Sadly, that no longer exists because there was no volume, we had no-one asking us for quotes, apart from a handful, so how much interest is out there? One of the issues was that long standing relationships and markets relationships are unequal. Brokers would go and do certain things, but they would get insurance on construction. I would say to anyone now, you can get a construction insurance policy. Not ‘no problem’, you need to do things in a slightly different way and you need to be more open with information, but it is absolutely available and I think two to three years ago it really wasn’t. The remaining issue is with property insurance and I think we have not seen a big change. That, I think, is the most frustrating because we need to temper that frustration and a lot of developers and owners will say well ‘OK, but I can get an excellent construction policy now but in three to four year’s time what will my property insurance policy be now?’ Quite frankly they will not get an answer and any answer will be negative. Now, we need to take a step back there, if you’re a developer and say, well I can’t get a price for my car insurance or my household insurance for three years and about why are you any different?  No underwriter will give you that price because they’re not allowed to because the market changes for good and for bad in those intervening years and therefore the price will change. So, no-one is going to commit to that, so we must start looking at what is the commercial driver? We all have a part to play here and maybe the developers, the owners, have a part to play…what’s your worst case scenario? Can we afford that? Can a potential buyer of this property afford that? If the answer is yes, well let’s crack on because then it comes back to data and then it comes back to experience and then it comes back to, we’ve answered those questions, we’ve got more of these buildings and the price will come down. That is inevitable. We are further forward, but I think certainly, from an insurance on the property space, we need to do a lot more work. We need insurers to be a lot braver with qualified data – they can do that and we need developers and owners to be braver; to perhaps not expect insurers to just take their balance sheet issues, to look at more inventive, more effective and inventive ways of managing those balance sheet issues, so that they’re not just all risk transferred to insurers who will not take on what you yourself would not take on. Strip those away and then you will find there is an extra relationship that you can build… but I don’t think we are there yet. I have a feeling that the tea leaves are indicating that we’re at the cusp of that and I think more than ever the conversation is now being had. We have some thought leadership events coming up being hosted in the Lloyds building which is great! Not just a room. They are providing more than that, they’re now really looking at this to be something that they need to get more involved in, as a thought leader. It doesn’t mean that they will push insurers to do something. That is not how they operate. That is not how the market operates, but it is the analogy of leading a horse to water. They are just building the trough and that is what we all need to do. Much more of that is happening now.


How confident are you that we will see the increased use of mass timber in the UK?

I am confident. I think the insurance market will always adapt and change. If you are of the belief that itis the insurance market that is the problem, then be confident that will change. My view is that it is government and the developers, the owners that need to take more responsibility. We’ve mentioned that the government’s policy is maybe not fast, but it is certainly changing towards the use of mass timber and we have mentioned Grenfell and the effect of that. With CO2 emissions, net zero, COP26 having been in this country, I think we’re going in the right direction. Finally, the developers – they are seeing that they have got more of a role to play here. Not just in saying, “you’ve got four weeks to get me an insurance policy please”. That doesn’t work anymore and taking people on that journey. They are now understanding that. They are also putting their money where their mouth is with regards to exploring alternative risk transfer mechanisms. That is really encouraging because the people who wanted to buy the insurance policies are exploring ways of being brave enough to help with that insurance themselves, which really exposes their balance sheets. There are some great little bodies of work going on, there is some wonderful coordination being done by a handful of organisations with regards to thought leadership in this space and obviously the Built by Nature accelerator fund which is relatively new and is doing great work in advancing the use of timber in the built environment. I am hopeful just like with all those little factors and little aspects, all doing their part that everyone else is starting to understand that they have a part to play in this as well, whether it be developers, structural engineers, fire risk engineers, architects, contractors, specialist and non-specialist contractors and then ultimately the insurers and the insurance brokers and advancing all of our knowledge. I am very confident that we will see widespread adoption of this, certainly in the next decade. I will put my hand up and say I think by 2030 that we will have very few of the problems that we have today. We have all learnt about CO2 and the effects on the environment, whether you are a believer in that or not, let’s just think about using sustainable products in our built environment. It makes more sense to use a tree that we can grow than to use resources out of the ground that we can’t replace. That seems good business sense to me. Even if you’re the most ardent climate change sceptic, it is good business to use something and sell it for a profit that you can grow back. That will happen. If we come back to data being a major issue, by 2030 will have more data, simple. By that stage, with ESG, when it comes to the corporate sense, from both insurers and investors and a need to be much more engaged and to do actionable, auditable things around ESG and EU taxonomy, which we are fully a part of within the UK, there is a lot coming, which means that everyone should be jumping on this bandwagon and everyone should be doing their part to learn, to understand what we’re talking about here; to understand the risk, understand how to mitigate it and be able to provide an equitable solution… but everyone has a part to play and that’s that goes back full circle to why I am doing this.