Our business operations put us firmly at the centre of society. From that position, we are dealing with a world that is constantly changing. We cannot ignore the impact of demographic, economic, socio-cultural, ecological, technological and political developments on our business operations. This is why it is so important that we keep a close eye on these developments and respond to them effectively. This is the only way we can have a positive impact on the world around us.
The past year was characterised by a great deal of unrest in the world, and this unrest appears to be continuing in 2025. In the Netherlands, we are dealing with a political climate of increasing polarisation, with the highly successful polder model increasingly fading into the background and populism taking up a more prominent place in the system. On the other hand, according to experts, most economic forecasts are far from negative. The construction industry is is facing a major challenge, in terms of both its complexity and its scale.
Unlocking the housing market
The housing market is struggling with a structural shortage of homes, while demand continues to rise. In September 2024, the Netherlands reached the milestone of 18 million inhabitants. According to forecasts by Statistics Netherlands (CBS), the population will increase to 19 million people in 2037, with a possible upper limit of 22.3 million in 2070.
In addition to population growth, the shrinking size of families and the ageing population also play a role in housing demand. More and more households consist of one or two people, which not only increases the total demand for housing, but also the need for different types of housing. To accommodate population growth and the changing composition of households, we as a country need to build 100,000 homes per year in the period to 2030. However, due to a lack of firm planning capacity, lengthy and complex permit procedures, increasing regulation and the limited availability of labour, the pressure on the housing market will remain as high as it has ever been.
An excessive focus on inner-city construction has led to an overly one-sided housing supply, while increased complexity has slowed down construction speeds. Many of these inner-city projects are large-scale in nature. Due to the withdrawal of institutional investors and the filing of appeal and objection procedures, a number of planned housing projects have either been delayed or even cancelled due to a lack of sufficient pre-sales.
The call to build two-thirds of the housing stock at affordable prices is of course understandable and music to many ears. But the question remains: who is going to pay for it? So it appears that yet another obstacle has been placed in the way of building production that will make it even harder rather than stimulate it.
In addition, the sector is dealing with rising construction costs, which is putting additional pressure on the affordability of housing. To keep housing affordable for consumers, we need uniform national regulations to enable the further industrialisation of housing production.
There are many initiatives and plans in the pipeline, but only a small percentage of these have been laid down in an irrevocable zoning plan. This means that in the short term we will continue to lack firm planning capacity, while objection procedures often delay any progress we might make. There are positive signs, such as the accelerated handling of objection procedures by the Council of State for the purpose of granting permits. There is also a growing awareness that we need to resolve problems related to utility connections and do it quickly. But we are still facing a number of challenges, such as a lack of administrative capacity at local authorities, the absence of an up-to-date policy vision for the housing market and, above all, the various extra-legal rules that often hinder rather than help in terms of affordability and scalability in the construction sector. We need measures aimed at building in all price ranges and a sufficient balance between apartments and houses to promote circulation in the housing market and to make the housing supply future-proof. We also need uniform national rules and requirements for residential construction. Despite these challenges, Heijmans has confidence in the housing market, as the demand for housing will remain high and continue to increase in the years ahead.
Operation repair and renewal
The Netherlands is facing an enormous infrastructural challenge, thanks to its many outdated post-war roads, bridges and locks that are in urgent need of renovation or replacement. In the infrastructure sector, tenders will have to be put out in batches to reduce tendering costs and the required capacity, and to increase the chance of success. This method of tendering will lower implementation costs due to repetitive activities, while also reducing failure costs. In addition, we need to act quickly and implement measures to combat extreme weather conditions, such as surpluses of water versus long periods of drought, because delaying action will threaten the safety and liveability of our country. These measures will be expensive, while the budgets unveiled in The Hague seem inadequate. This task is being made even more challenging by a limited labour force, a limited supply of building materials and the urgent need to work in a climate-neutral way. As a sustainable leader, Heijmans wants to contribute to resolving these issues by focusing on innovative and cost-efficient building methods, reducing CO2e and nitrogen emissions and promoting circular construction.
Dealing with water
Water plays an increasingly important role in our lives. Climate change is not only responsible for rising sea levels and higher water levels in rivers, but also for long periods of drought, drinking water scarcity and deteriorating water quality. Water quality is also under pressure from economic activities. The Netherlands has a rich tradition of water management, but the current challenges demand innovation and cooperation. The only way we will be able to effectively tackle our new water management challenges is by adopting a joint, integrated approach to the task we face.
From this point onwards, the natural water and soil system has to form the basic principle for the organisation of our country, with the restoration of the disrupted water balance as a priority. This balance influences water safety, the natural environment, food production and health. National guidelines increasingly determine where construction is allowed, while conflicting interests lead to heated discussions and slow decision-making.
The European Water Framework Directive and the Dutch Environment Act impose strict requirements, which complicates the licensing of construction projects. The availability of clean and safe drinking water also seems to be something many of us take for granted.
The idea that water will flow from the tap at any moment we need it is deeply interwoven in our daily habits. And yet we need to become aware of just how vulnerable our water supply is. Climate change, population growth and increasing pressure on our natural resources means we have to rethink how we use water. This reality is forcing us to think about how we use drinking water for applications that do not always make sense. Flushing toilets and watering gardens with clean drinking water puts pressure on our water supply and is no longer tenable. These insights demand a new vision on water use. How can we adapt our environment and lifestyle to use water more intelligently, sustainably and consciously? This is a question that demands not just innovation, but also cooperation and behavioural change. To make the Netherlands more resistant to extreme weather conditions, we need a combination of preventive measures and water-robust construction. For Heijmans, water offers a significant opportunity to add value in our field and to help create a healthy living environment. Our approach is based on four pillars: improving water quality, promoting water balance, optimising water use and guaranteeing water safety.
Reducing CO2e footprint
The Netherlands has committed to the goals agreed upon in the Paris Climate Agreement. This states that we must combat global warming by reducing the amount of greenhouse gas emissions, including CO2. The Netherlands aims to emit 95% fewer greenhouse gases in 2050 than it did in 1990. The year 2030 has been designated as an important measuring point; by then, the country is supposed to have reduced emissions by 55%.
According to the Dutch Environmental Assessment Agency (Planbureau voor de Leefomgeving), the chances of the Netherlands achieving this interim target are increasingly slim. In the annual Climate and Energy Outlook (KEV) of October 2024, this organisation came to the conclusion that the chance the country will meet this target had dropped to less than 5%. In response to these findings, the Council of State said that the cabinet must take more effective measures as quickly as possible to meet the targets.
Heijmans recognises that there is still the political will to achieve these sustainability goals, but the decisiveness is lacking. The Climate Agreement set the goal of making 1.5 million homes sustainable by 2030, while seven million homes and one million other buildings must be natural gas-free by 2050. The current pace is insufficient to achieve these goals. Politics and business must work together and adjust budgets and legislation to accelerate the energy transition. Meanwhile, the construction sector must continue to invest in cleaner, faster and smarter production methods. Heijmans endorses this ambition and is fully committed to it.
Circular economy
In the circular economy, products and materials are reused, which means raw materials retain their value. The focus on circular construction has also led to growing interest in the entire life cycle of a building: from design to the reuse of residual materials during demolition. This transition requires a great deal of effort, such as the evolution from material flows to material cycles. The use of biobased materials and the reuse of the raw materials used in construction will help reduce the use of primary raw materials, which will in turn reduce greenhouse gas emissions in the construction industry. Heijmans contributes to this effort by creating circular designs and material passports, which provide insight into the materials used, facilitate the reuse of these materials and therefore reduce the use of primary raw materials.
Nitrogen
The persistent nitrogen problem has been a major stumbling block for the construction of new roads and residential areas for many years. At the moment, due to the rulings of the Council of State of 18 December 2024, new construction projects may require a so-called nature licence. However, the construction sector accounts for a very small share of total nitrogen deposition (less than 0.6%, according to figures from construction industry association Bouwend Nederland). Heijmans has had Aerius calculations made for almost all the projects it is developing itself and has taken measures where necessary. As a result of these measures, nitrogen deposition during the construction phase remains within the legal limits. A more far-reaching approach to the sources of the largest emitters is necessary for a long-term solution.
We need to improve biodiversity
Biodiversity – the diversity of all life on earth – is under severe pressure worldwide. In the Netherlands, we have lost no less than 85% of this biodiversity over the past hundred years. At the end of 2022, almost two hundred of the countries at the UN summit in Montreal set goals to halt this decline and ultimately restore biodiversity. The goals for 2030 include protecting at least 30% of land and water surfaces and a significant reduction in the amount of pesticides used.
The Ministry of Infrastructure and the Environment has been considering the Dutch implementation of the international agreements for some time. The Montreal goals have now been translated into a National Biodiversity Dashboard. This shows the extent to which the Netherlands is on track to achieve the 2030 goals. At year-end 2024, the Netherlands was still underperforming on all fourteen goals.
In 2024, the government removed the obligation to include nesting facilities in the Buildings and Living Environment Decree (Besluit Bouwwerken Leefomgeving - BBL). This led to numerous reactions from construction companies, including Heijmans, nature conservation organisations and other parties involved. In response to this, the Dutch House of Representatives passed a motion calling on the minister to retain the obligation for nesting facilities in new buildings. This is an important step in the protection of species such as the house sparrow, the common swift and bats, which Heijmans supports.
Heijmans also takes its responsibility in the area of biodiversity. We are very much aware of the impact our sector has on the natural environment and that is why we are actively contributing to the creation of a nature-inclusive built environment and the restoration of biodiversity.
Scarcity on the electricity grid
The sharp increase in demand for electricity is leading to increasing scarcity and congestion of the electricity grid. This is obviously not good for the energy transition. There is a danger that the transition to emission-free means of transport will fail if the charging infrastructure is not expanded significantly. And new construction projects run the risk of not being connected to utilities or of delays in getting a connection. To guarantee sufficient energy supply in the future, we need major adjustments to and the expansions of the main infrastructure and local networks.
Meanwhile, more and more of our clients have been requesting the use of emission-free equipment in construction. For example, one very important player, the Dutch Ministry of Public Works and Water Management, has stated its ambition to be completely climate-neutral and to work in a circular fashion by 2030 at the latest. However, the transition to zero-emission construction still faces considerable challenges. These include obtaining and effectively deploying emission-free equipment, as well as setting up a practical and workable charging protocol. In addition, clients are not automatically willing to stipulate the use of emission-free equipment in their tendering policies, and by doing so help construction companies to recoup their extra investments in clean equipment. Consistent policy would make this an irreversible shift towards ever cleaner production.
Labour market remains tight
The tight labour market is affecting an increasing number of companies and sectors. The availability of practically trained trade professionals and experienced personnel, such as project managers, supervisors and work planners, is lagging demand and is the major transition challenge faced by the construction industry. Unfortunately, the forecasts for the near and more distant future are not encouraging either, given the decline in enrolments for technical and construction-related studies. This is why it is important to make very conscious choices at the front end of tender selections. In addition, various construction companies have relied on migrant workers in recent years, while the use of this professional group is now an increasingly frequent topic of political and social debate.
Just like Heijmans, our suppliers and subcontractors in the chain are also being increasingly hampered by the shortage of professionals. This is why it is necessary for everyone involved to deploy their available professionals as efficiently and smartly as possible. Quite apart from the fact that we believe the deployment of migrant labour is unavoidable given the large-scale task faced by the construction industry. We will also have to focus more on automation, standardisation and digitalisation. There are opportunities the areas of modular construction techniques, the development of new digital solutions and tools, attracting newcomers and people changing careers, as well as training staff in-house.
In projects aimed at the construction, renovation and improved sustainability of larger buildings, we have noted that clients are applying partner selection earlier and earlier in the process to guarantee capacity and to involve know-how and expertise at an early stage. We applaud this one-on-one selection, as it allows us to be more selective and effective in terms of deploying our resources, while also enabling us to make an early assessment of the trade-off between risk acceptance and earning potential.
Changing legal and regulatory requirements
Legal and regulatory requirements are constantly changing and have a direct impact on companies, especially in the construction sector. Heijmans operates in this dynamic field and emphasises the need for consistent and long-term government policy to achieve efficiency in the sector and enable modular industrialisation, which would in turn enable us to optimise production, reduce failure costs and safeguard affordability.
The Corporate Sustainability Reporting Directive (CSRD) applies to listed companies, including Heijmans, from the 2024 financial year onwards. The CSRD requires detailed reporting on a company's impact on people and the environment. You will find more information on this in the sustainability report.
The Building Quality Assurance Act (Wkb), which has been phased in starting in January 2024, aims to improve construction quality and supervision. In addition, the National Health Policy Document 2020-2024 emphasises public health in spatial planning policy, an approach that is close to Heijmans' mission due to its focus on users and healthy living environments.
Digitalisation
Digitalisation is essential in the construction industry, with its rapid developments in products and services. Technologies such as augmented reality (AR), virtual reality (VR), artificial intelligence (AI), drones and digital project management tools are playing an increasingly important role at Heijmans. We make full use of the power of smart (digital) technology. These innovations not only help us to respond more effectively to the needs of our clients, but also to deploy our employees more efficiently thanks to automation and data-driven working. This enables us to work smarter, which is vital in the current labour market and will become even more important in the future. Digitalisation improves safety and makes processes more efficient, but it also increases our dependence on technology, making cybersecurity crucial.