Environmental problem

The environmental challenges of the construction industry are significant and multifaceted.

One of the biggest concerns is the industry’s vast demand for raw materials, whose extraction, transportation and processing put enormous pressure on natural resources and ecosystems.

Construction minerals make up nearly half of the global material use, with a major proportion being deployed for concrete production, which constitutes more than 50% of the material volume used in construction. Concrete production is highly energy-intensive and involves chemical reactions that release large amounts of CO₂, making it responsible for approximately 8% of global carbon emissions.

The building sector accounts for over one-third of the world’s energy demand, with a significant portion of this energy being wasted due to inefficiencies.

Beyond material use, the operational phase of buildings significantly impacts global energy consumption and carbon emissions. The building sector accounts for over one-third of the world’s energy demand, with a significant portion of this energy being wasted due to inefficiencies. In Europe, nearly 75% of existing buildings are energy inefficient, leading to excessive energy demand for heating and cooling. Similar inefficiencies exist worldwide, particularly in fast-growing urban areas where energy standards may be lax or unenforced.

Furthermore, demolition and construction waste contribute heavily to environmental degradation. Large volumes of construction waste ends up in landfills, increasing pollution and resource depletion, thus being able to effectively repair and maintain buildings and infrastructure could generate significant landfill savings. This is an area we explored in our May 2024 Theme of the Month.

Addressing all these issues requires industry-wide changes, from promoting low-carbon materials to improving building efficiency. Construction chemicals are one of the solutions that can significantly reduce the environmental impact of construction.

Environmental solutions

Construction chemicals actively mitigate the environmental footprint of the construction sector, despite sometimes viewed as environmentally contentious. Although not every construction chemical has clear positive environmental credentials, the main goal is to improve specific properties of construction materials and buildings, driving resource efficiency and enhancing durability. Typically, the construction chemicals space comprises five product categories:

• Concrete Admixtures are synthetic or mineral-based additives mixed into cement or concrete to improve performance. For instance, plasticizers, the most common category, reduce the water needed to achieve a workable mixture, which enables the reduction in cement usage or the incorporation of recycled aggregates without sacrificing mechanical strength (Figure 1).
• Waterproofing Solutions are vital for shielding structures from water infiltration. From a material perspective, it must be noted that bitumen—while effective and widely used—poses toxicity and pollution concerns. As an alternative, liquid-applied or polymeric membrane products offer a superior environmental profile and additional benefits, such as reflecting solar radiation to improve cooling efficiency. Moreover, they represent the preferred options for green roofs or photovoltaic panels installations.
• Adhesives and Sealants in construction go well beyond gluing materials together. They are essential to insulating buildings against air and heat losses, thereby enhancing energy efficiency. For example, adhesives facilitate the installation of insulation panels, while sealants further minimise heat loss by ensuring airtightness.
• Concrete Repair Mortars and Grouts support both minor and structural maintenance. A large share of the construction market in developed regions is focused on renovation. Repair mortars, grouts, and chemical anchors can dramatically extend the usable life of existing concrete structures. When used in combination with fibre-reinforced polymers or corrosion-resistant coatings, these materials safeguard infrastructure against further deterioration. This reduces the need for demolishing old structures and building anew, cutting back on resource extraction, transport, and waste.
• Flooring Resins are highly resistant to mechanical and chemical stresses, often outperforming cementitious structures or alternative flooring options, and are increasingly popular in industrial and commercial settings. For example, in food processing or pharmaceutical plants, they enable easier cleaning and minimize bacterial growth. By reducing total material usage over the building’s lifecycle and helping maintain high sanitary standards, resinous flooring supports resource efficiency.

Construction chemicals actively mitigate the environmental footprint of the construction sector, despite sometimes viewed as environmentally contentious.

Investment Opportunities

For investors, the construction chemicals sector is compelling: it offers relatively stable, long-term growth at a 5-6% compound annual growth rate (CAGR) that outpaces the broader construction market (+3-4% CAGR). This growth is attributed to the exposure to renovation and energy efficiency projects – supported by decarbonisation policies – and to high performance applications, expanding faster than the broader market due to increasing building standards. Market dynamics are specific to each product category. 

Publicly traded firms in the construction chemicals space are frequently large conglomerates with robust R&D capabilities, established brand portfolios, and global distribution networks. Examples include Sika, the global market leader for construction chemicals, and Saint-Gobain, which recently became the global #2 construction chemical company, whose division accounts for approx. 15% of group turnover, but for a much more sizeable proportion of the group margins and value. The compelling investment opportunity of large, listed construction chemicals companies is driven by: 

• High barriers to entry: specialised products often require lengthy testing and accreditation processes, and trust-based relationships with end users can be hard for newcomers to replicate.
• Consistent R&D and innovation: firms that maintain healthy research budgets often lead in launching next-generation, lower-carbon, or more durable products. This sustained innovation can help them capture market share in segments like high-performance admixtures or next-gen waterproofing membranes
• Geographical diversification: construction cycles are uneven globally, so companies with balanced exposure in North America, Europe, and fast-growing regions such as Asia or Latin America can hedge macroeconomic risks. 

For investors, the construction chemicals sector is compelling: it offers relatively stable, long term growth that outpaces the broader construction market.

While major global players dominate segments like admixtures, the broader construction chemicals market remains fragmented with interesting local niches. Mid-sized specialised companies or regional champions often bring unique technologies or strong local relationships with distributors and contractors. This fragmentation creates a positive business case for buy-and-build strategies.  Moreover, other private market investment angles include opportunities across the value chain, such as: 

• Technical contractors and applicators: installing resin flooring or advanced waterproofing products often requires specialised labour. Some of these contractors remain small or family-owned, despite strong relationships with large clients. A buy-and-build approach can strengthen market positioning while providing cross-selling opportunities with chemical product suppliers. 
• Local champions in adhesives and sealants, and concrete repair. These two segments represent the ones with the highest fragmentation, thus national markets often have both local champions and smaller innovative companies developing interesting products and being recognized in their niche. 

As demand for greener, longer-lasting structures grows, construction chemicals represent a critical link in bridging performance and sustainability.

In conclusion, as demand for greener, longer-lasting structures grows, construction chemicals represent a critical link in bridging performance and sustainability. They reduce the need for resource-intensive materials, extend the life of existing structures, and support higher energy efficiency standards. For investors, these attributes translate into tangible opportunities. Public markets can target well-established firms with innovation pipelines and a global presence, while Private Equity players can roll up fragmented niche suppliers. Regardless of the specific approach, few areas in construction offer a clearer synergy between environmental benefit and profitable growth. Construction chemicals, therefore, merit close consideration when building a forward-looking, sustainability-aligned portfolio.

Important information

This material is of a promotional nature and is provided for information purposes only. Please note that this material may contain technical language. For this reason, they may not be suitable for readers without professional investment experience. This document is issued by Ambienta SGR S.p.A. It is not intended for solicitation or for an offer to buy or sell any financial instrument, distribution, publication, or use in any jurisdiction where such solicitation, offer, distribution, publication or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document.

This material is of a promotional nature and is provided for information purposes only. Please note that this material may contain technical language. For this reason, they may not be suitable for readers without professional investment experience. This document is issued by Ambienta SGR S.p.A. It is not intended for solicitation or for an offer to buy or sell any financial instrument, distribution, publication, or use in any jurisdiction where such solicitation, offer, distribution, publication or use would be unlawful, nor is it aimed at any person or entity to whom it would be unlawful to address such a document.

Nothing in this document constitutes legal, accounting or tax advice. The information and analysis contained herein are based on sources considered reliable. Ambienta SGR S.p.A uses its best effort to ensure the timeliness, accuracy, and comprehensiveness of the information contained in this marketing communication. Nevertheless, all information and opinions as well as calculations indicated herein may change without notice.

Ambienta SGR S.p.A. has not considered the suitability of this investment against your individual needs and risk tolerance. To ensure you understand whether our product is suitable, please read the Prospectus and relevant offering documents. Any decision to invest must be based solely on the information contained in the Prospectus and the offering documentation. We strongly recommend that you seek independent professional advice prior to investing.