Three Seas Economic Journal

76

Vol. 2 No. 4, 2021
DOI: https://doi.org/10.30525/2661-5150/2021-4-13

ECOLOGICAL AND ECONOMIC ASPECTS  
OF THE TRANSFORMATION OF CONSTRUCTION ENTERPRISES 

ON THE BASIS OF BIOSPHERE COMPATIBILITY
Hanna Shpakova1, Andrii Shpakov2 

Abstract. The purpose of the article is the question of creating an indicative base to determine the level of biosphere 
compatibility of construction market participants. Biosphere compatibility is considered as a characteristic of the 
processes of production, management and organization from the point of view of preservation of natural resources 
and ensuring sustainable development in the construction industry. The relevance of creating adaptive mechanisms 
of construction enterprises for the implementation of transformational changes at the micro, meso- and macrolevels 
has been determined. Methodology. Typical sustainability indicators were grouped and analyzed using a three-year 
(2018, 2019, 2020) dataset of 15 construction companies, although these indicators are universal regardless of 
the industry in which they apply. On the basis of these indicators, the meaningful parameters of the state of the  
construction enterprise system that can be obtained as a result of transformations based on biosphere compatibility 
have been established. The result is a model for obtaining indicators, which helps to predict and evaluate the 
effectiveness of sustainable transformation of the enterprise. Factors influencing the formation of the concept of 
urban environment production, resource use policy, energy efficiency of production and operation of the final 
construction products during the life cycle, the main factors influencing the formation of the environmental and 
economic mechanism of development of construction enterprises on the principles of biosphere compatibility are  
considered. Practical implications. Formation of the concept, the strategy of development of the construction 
industry, fully taking into account global, national, regional conditions and restraining (limiting) regressive 
influences, especially important in circumstances where the current circumstances of the industry sometimes 
contradict the principles of sustainable development. The reasons determining the transition to biosphere-
compatible construction are based on generally accepted concepts of conscious consumption of resources and 
modified models of urban society economy that take into account the social component. Comprehensive assessment 
of design solutions for the construction of biosphere-mixing facilities, based on a system of not only economic 
factors, but also environmental and social, which corresponds to the principles of sustainable development.  
Value/originality. Targeted biosphere-compatible transformation of construction market participants, based on the 
biosphere-compatibility assessment system in this article, should become a leading tool for the development of 
modern cities, as it takes into account not only technological, but also social, economic and environmental aspects.

Key words: sustainable development, biosphere-compatible change management, greening the economy, 
biosphere compatibility of production, assessment of biosphere compatibility.

JEL Classification: Q01, Р18, О14, О22, L15, Q55

Corresponding author:
1 Kуiv National University of Construction and Architecture, Ukraine
E-mail: shpakova.gv@knuba.edu.ua 
ORCID: https://orcid.org/0000-0003-2124-0815
2 Kуiv National University of Construction and Architecture, Ukraine
E-mail: shpakov.аv@knuba.edu.ua
ORCID: https://orcid.org/0000-0002-7498-4271

1. Introduction
The priority development of Ukrainian cities, their

dominance in the social and domestic infrastructure of 
the population, is the cause of the deformation of the 
moral and ethical components of human consciousness 
as an element of the biosphere, which is a unique 
self-regulating system. The deterioration of urban 

ecology, population density and, as a consequence, 
the decreasing demands on the living conditions of 
urban society cause a number of problems that lead 
to a demographic crisis, extinction and biological 
and genetic degradation of the people. According to  
Stephen R . Mann's chaos theory, small actions will 
be sufficient for the extinction of humanity, as the  

This is an Open Access article, distributed under the terms 
of the Creative Commons Attribution CC BY 4.0



Three Seas Economic Journal

77

Vol. 2 No. 4, 2021
"butterfly effect" leads to a loss of balance on the scale 
of global processes. Usually these imbalance processes 
return to equilibrium because the stabilizing forces of 
nature are great, but it is unknown whether humans will 
exist at the moment of stabilization. After all, the range of 
human existence is very narrow. The balance between the 
spheres of the human and the natural must be maintained 
not so much from the position of the impossibility of 
existence from each other – human egocentric thinking, 
but from the position of V. Vernadsky 's noosphere 
reality – the possibility of existence and development of 
nature without humanity. Therefore, the dominance of 
anthropogenic factors in any sphere of human activity 
can no longer be considered an absolute axiom.

Given the ecological and biological threats 
of today 's world, humanity 's future depends on 
obligatory collective responsibility for the actions and 
consequences of our technological civilization, affecting 
nature as a necessary condition, in terms of transforming 
or substantially changing development goals from 
economic to combined, socio-ecological ones. In this 
context, the greening of the economy through changes in 
the construction industry and the optimization of social 
and environmental factors is a relevant opportunity to 
achieve synergy.

2. Transition to biosphere-compatible change
management

Any modern major city is a system of complex, 
inextricably linked natural and anthropogenic 
components, where the advantages of one lead to 
the dominant impact on the architecture of the city 
(Tsygychko, 2012). The anthropogenic component 
has the most irreversible effects. But even in this 
case, there is always the opposite effect of natural 
components. For example, air pollution in large 
cities, in turn, negatively affects the condition of the 
materials of building envelopes, and the construction 
of multistory buildings with a small building area 
affects the natural level and direction of groundwater, 
which leads to wetting of foundations, corrosion of 
structures, subsidence or removal of buildings and 
loss of bearing capacity of individual structures and 
buildings as a whole (Tsygychko, 2009). Greening the 
economy also has a marketing side, it causes people to 
have "greener" needs (Ottman, Reilly, 2006). Therefore, 
the introduction of biosphere-compatible construction 
as a modern concept of urban planning that meets the 
goals of sustainable development, aimed at meeting  
a set of socio-environmental, economic and economic 
needs of the population, is quite relevant. Small changes 
in the initial conditions of decision-making lead to a huge 
impact on aspects of strategic development (Mann, 
1992). What is biosphere-compatible construction? 
In the author's interpretation, it is a special type of 
complex social, environmental and economic (complex 

and open) system, which is centrally subordinated 
to the regulatory and permissive framework of acts in 
design, construction and operation, has a clearly defined 
regional aspect, socio-economic anomalies and depends 
on natural resources (Shpakova, 2020). Modern design 
and construction of any local objects or large urban 
complexes, as well as the reconstruction of buildings 
and territories, can no longer be carried out without 
taking into account environmental standards. 

Studies by many international environmental 
organizations have shown that the desire to improve 
environmental efficiency can lead to negative social  
and/or economic consequences. Therefore, it is almost 
never possible to make progress in the three dimensions 
in the same period of time. Hence the conclusion that 
not every new production technology, beneficial in  
terms of productivity and capital, is suitable for 
the environment. The key to resolving a certain 
contradiction between economic growth and ecology, 
as foreign experience shows, is mutual understanding 
and coordination between government and business.

Therefore, the ecological and economic assessment 
of production should be based simultaneously on the 
principles of sustainable development, i.e. on structural-
criteria indicators. On the basis of E. Warhurst's research 
for the Warwick Business School (Warhurst, 2002), 
the indicators (hereinafter indices) of sustainable 
development can be represented as conditionally 
divided into environmental, social and economic 
components, which are also the limiting parameters 
of the "ecology " – "economy " – "society " system. This 
ranking of parameters is justified from the point of view 
of universalization of the assessment of biocompatibility 
of production through the use of data from the statistical 
and accounting database, formed in enterprises in 
accordance with the requirements of business.

The grouping of sustainable development indices by 
type can be represented as follows:
– a group of universal indices that describe all
three components: Descriptive (I), Production (II),
Economic (VIII);
– a group of transitional indices describing two compo-
nents – environmental and economic: Production (V),
Accounting (Reporting) (VII), Quality (IX);
– a group of unique indices that describe only
one environmental component: Effective (III),
Regulatory (IV), Regulatory (VI), Environmental (X)
(Shpakova, 2019; Warhurst, 2002).

The principles of biosphere-compatible construction, 
based on the principles of sustainable development, have 
polymorphic belonging to the group, provoked by the 
overlapping areas of the system "ecology " – "economy " – 
"society " (Figure 1). "Aggregating" the indicators of the 
three components in the measurement of sustainable 
development may require analysis to determine the 
importance (significance) in the hierarchy of biosphere 
building compatibility assessment.



Three Seas Economic Journal

78

Vol. 2 No. 4, 2021
It is necessary to normalize the data, focusing on the 

principles of biosphere compatibility of any production. 
Therefore, it is advisable to compare the components of 
sustainable development by type and the components 
of biosphere compatibility.

The principles of biocompatible production, 
implemented on the basis of the concept of sustainable 
development, are comprehensive in nature. Their 
analysis and evaluation should be based on a system-
integrated approach, that is, the definition of multifactor 
indicators (indicators) reflecting the relationship of 
economic, social and environmental components in 
terms of the usefulness of biocompatible construction 
technologies at the state level. This requires regrouping 
and specifying sustainable development indicators 
in accordance with the principles of biosphere 
compatibility.

3. Assessment of design solutions
in the socio-ecological-economic system

The main difficulty at the microeconomic level, where 
eco-economic problems are localized and spatially 
contingent, is the need to make a difficult choice between 
"economic upliftment" and biosphere-compatible 
technological progress. This means that production 
must be evaluated according to an environmental 
standard in terms of emissions and/or use of primary 
natural resources. Thus, the choice made by enterprises 
in connection with the greening of production and 
products will depend not only on a number of purely 
economic factors (economic calculation), but also 
on mandatory legal regulation and environmental 
expertise, and especially in the case of industrial 
innovation – on the knowledge and environmental 
awareness of consumers and the economic benefits  
they receive, also accounted for by a significant number 
of factors, indicators, etc. It should also be borne in 
mind that it is impossible to take into account the 

effects of all factors, as this could lead to a loss of 
control over the system. Therefore, an important 
task is to determine a limited set of major factors  
that allows a focused assessment of the criterion of  
"biocompatibility" of production under study in this case.

As a result, the groups of indicators for assessing 
biosphere-compatible production by direction are as 
follows:
1. socio-ecological direction – index of compliance with 
current conditions (standards) of labor protection at
the enterprise (1.1), coefficient of pollutant emissions
(greenhouse gases, waste water, solid toxic waste, etc.)
according to the results of environmental expertise
(1.2), occupational illness rate (1.3);
2. eco-economic direction, the growth rate of production 
costs (2.1), the closed cycle resource ratio or processing 
ratio (2.2), the product energy consumption rate (2.3),
the product specific resource consumption rate (2.4),
the index of compliance with certification requirements
(2.5), index of compliance with environmental
requirements of local, regional, national regulations
(2.6), payment for the use of natural resources (2.7),
fixed asset renewal rate (2.8), production growth
rate (2.9), natural resource turnover rate (2.10), use of
primary resources, associated resources in production
(packaging), rejected products (2.11), costs to
overcome environmental pollution consequences in
case of emergency (2.12);
3. socio-economic direction – labor productivity (3.1),
productivity factor (3.2), labor costs (3.3),
environmental efficiency coefficient (3.4), job creation
coefficient (3.5), production social prestige coefficient
(relative to living wage) (3.6), production social
prestige coefficient (3.7), cost coefficient for training
and retraining personnel for greening production (3.8).

The general system of biosphere compatibility 
indicators is presented in Figure 2.

These indicators have a different mathematical 
nature: one part of them – absolute values, and the 
other – the coefficients, partially integrated, which are 
relative characteristics of production. In addition, there 
are a number of indicators that are actually protective, 
automatically eliminating the need for further data 
analysis to determine the biosphere compatibility 
indicator due to non-compliance with regulatory and 
additional (voluntary) restrictive requirements. These 
nuances must be taken into account in the mathematical 
evaluation apparatus of the complex index.

The effectiveness of design decisions depends on 
targeting one, two, or all three areas of biosphere 
compatibility. The visualization of this model is 
presented in Figure 3.

The quantitative assessment (positive or negative) of 
the environmental component of the decision on such 
a model is plotted, for example, on the X-axis. In turn, the 
assessment of the economic and social components – 
on the axes Y and Z, respectively.

Figure 1. Schematic diagram of polymorphism of parameters  
of the system "geology" – "economy" – "society"



Three Seas Economic Journal

79

Vol. 2 No. 4, 2021
The elements of assessment of the effectiveness of 

project solutions in the socio-ecological-economic 
system are presented in Figure 4. From Figure 4(a) 
shows that point A, i.e., the quantitative assessment of 
the project solution is in the area of the desired positive 
decision, which is the most attractive in the development 
of the project. The corresponding evaluations, labeled 
points B, C, and D, are less acceptable because they  
have two negative or minimal quantitative evaluations 
of the three areas, and are in the areas of critical but 
acceptable solutions. Figure 4(c) denotes the area of 
unsatisfactory solutions, where none of the project 
requirements are positively evaluated.

In Ukraine, the main indicator of environmental 
assessment is environmental expertise, which is 
carried out by state environmental protection 
authorities. "Environmental expertise in Ukraine is 
a type of scientific and practical activity of specially 
authorized state bodies, environmental expert 
formations and associations based on interdisciplinary 
environmental research, analysis and assessment of 
pre-project, design and other materials or objects, 
the implementation and operation of which may 
negatively affect or will affect the environment and 
human health" (Smovzhenko, 2015). Modern world 
standards for the standardization of environmental 
parameters of the architectural and construction 
industry relate mainly to the environmental, energy 
and economic efficiency of so-called "Green Buildings". 
On their basis, in parallel with European national 
norms (directives) relating to the standardization 
of environmental quality, corporate and voluntary 
environmental quality rating certificates of production 
have been developed and exist. The most famous of 
these are the English BREEAM and the American 
LEED. The mechanisms of these systems are based on 

the monitoring of environmental indicators, namely 
monitoring the state of the biosphere, assessment and 
prediction of its condition, identification of factors 
and sources of influence, determination of the degree 
of anthropogenic impact on the environment.

But the data obtained as a result of environmental 
observations should be evaluated at the macro level of 
sustainable development of urban society as a whole, 
taking into account the greening component of the urban 
environment, the industrial anthropogenic component. 
In turn, the assessment of the industrial anthropogenic 
component should take into account the symbiosis 
of regulatory design factors, construction conditions 
and economic reserves of the period of operation of 
buildings and structures in terms of social responsibility 
and future commercial potential of the object for 
customers, developers, owners (Smovzhenko, 2015).

Under these conditions, the implementation of 
the concept of biocompatible construction for urban 
society is divided into the following stages.

Figure 2. The system of indices and indicators that characterize 
the assessment of biocompatibility of production

Figure 3. The space of modeling the effectiveness of design solutions  
in the social and eco-economic system



Three Seas Economic Journal

80

Vol. 2 No. 4, 2021

The first stage is the creation of a targeted strategy 
for the biocompatible construction of a modern city,  
taking into account the infrastructure and the city-
forming factor (industrial, resort, tourist, etc.).

The second stage is the creation of a symbiotic 
system of mutual development of the city and man 
"sine qua non", critically taking into account the mutual  
influence of natural and anthropogenic components.

The third stage is the creation of a unified system of 
diagnostics, assessment and monitoring of the system 
of biosphere-based existence, which aims to study the 
anthropogenic criteria (city population) and the natural 
potential of territories.

The fourth stage is the establishment of regulatory 
boundaries for the implementation of biocompatible 
construction, relating to requirements for the design, 
construction, operation, reconstruction and/or disposal 
of facilities throughout the life cycle, in accordance with 
national, international environmental standards and 
socio-humanitarian paradigms.

The fifth stage is the creation of a national system of 
ecological certification of construction products, aimed 
at a comprehensive assessment of the environmental, 
social and economic parameters of projects, existing 
buildings and structures (Shpakova, 2020).

This formalized approach seeks to follow a clear 
logic of consistent implementation of biocompatible 
construction at the request of urban society, 
a clear architectonics of the interrelations in the system 
"ecology " – "economy " – "society " is created, and the 
step-by-step implementation of the strategy allows to 
solve local problems. These local problems include 
the legislative framework at the macrolevel, taking 
into account the specifics of the construction site in 
the design at the microlevel, followed by integration 
into a single industry-wide program of state reform.  
The structural and logical scheme of the strategy does 
not provide for the removal of any of the stages, as this 
would lead to an imbalance of the system and the loss 

of time for the development of the industry in terms of 
sustainable development.

Each of the proposed steps should have its own 
practical results. The first stage should clearly form the 
orientation of the city within the industrial complex 
of the state as a budget-forming unit, which will avoid 
contradictions between the social and environmental 
constraints and design standards of facilities and urban 
infrastructure, i.e. will take into account the priority 
for the city design solutions for the construction and 
modernization of areas, which will correspond to the 
practical results of the second stage of the strategy.  
The result of the third stage is the development of 
a national system for monitoring the biosphere-oriented 
existence of society, its adaptation to international 
standards of environmental quality and integrated 
use within a unified coordinate system for real-time 
assessment of the state of the industry. This approach 
will allow a rapid response to changes in the system 
that lead to progressive or regressive developmental 
effects. At the fifth stage, based on the monitoring of 
biocompatibility within the construction industry, 
a rating scale of national manufacturers should be 
formed, supported by the state apparatus with image 
and fiscal incentives (national quality certificates, tax 
benefits and environmental fines, etc.). The basis for 
the application of state regulation mechanisms should 
be the legislative framework – the practical result of the 
fourth stage.

3. Conclusions
To determine development priorities, evaluation

criteria and recommendations for the implementation 
of mechanisms to regulate the relationship between 
man and nature at the macro level, carrying mainly 
socio-ecological burden, and business and government 
at the meso- and macrolevel, where the nature of 
relations is more clearly seen in the eco-economic 
plane, it is necessary to define with the tools used 

                             (a)                                                             (b)                                                                (c)
Figure 4. Elements of the assessment of the effectiveness of project decisions in the social  
and eco-economic system: (a) projection on the social-ecological plane of decision-making 
with a positive economic assessment; (b) projection on the eco-economic plane of decision-
making with a positive social assessment; (c) projection on the social-ecological plane  
of decision-making with a negative economic assessment



Three Seas Economic Journal

81

Vol. 2 No. 4, 2021
to determine a comprehensive index of biosphere 
compatibility. On the basis of studies of indicators 
of sustainable development, statistical data of the 
construction industry, developments of domestic and 
world scientists proposed a method for calculating 
indicators of assessment of biosphere compatibility of  
production, which is based on an analytical set of 
diffuse indicators that take into account entropic data of 
construction companies and evaluate the development 
of the system (project) in accordance with the declared 
regional, national or international environmental 
standards for the integral indicator of biosphere 
compatibility.

The general formula for the indicator of 
biocompatibility of production can be represented as: 

Z
K

I
Z mbs

bs

bs

i i
i

n

=
{ }
{ }

⋅
=
∑ ( )
1

, (1)

where Zi – indicator of biosphere compatibility of the 
i-th component of the overall assessment;
m m K m Ii i i={ }( ); ( )  – weights of the relevant factors
affecting biosphere compatibility depending on the
branch, determined by various methods (preference
method, ranking method, pairwise comparison
method, etc.);
Kbs{ }  the system of coefficients of social and ecological, 

eco-economic and socio-economic components of
assessment of biosphere production compatibility;
Ibs{ }  a system of indicators of the socio-ecological and

ecological-economic components of the assessment of
the biosphere's compatibility with production.

It should be noted that the system of indicators 
defined in the binary system (1 or 0) is a fuse to exclude 
from the calculation of incorrect data or those that do 
not meet the specified standards.

Global attention to the ecological existence of urban 
society only began in the twentieth century. In 1993,  
the 18th World Congress of Architects in Chicago 
adopted the Declaration of Interdependence for 
a Sustainable Future, which recognized environmental 
sustainability and consideration of environmental 
requirements as a priority in design and construction, 
and in 2002 the European Organization of the 
Construction Industry decided to introduce a set of 
environmental protection measures in the construction 
process. However, the Ukrainian state and the 
construction industry in particular must promptly 
engage in the concept of implementing biosphere-
compatible construction in the context of our 
country 's policy to achieve sustainable development 
goals. In this connection, the development of 
a system of standards for the balanced development of 
biosphere-compatible construction requires profound 
changes in the economic, social, environmental, and 
ethical spheres, as well as their harmonization with the 
laws of biosphere development and the principles of 
humanism.

It should be noted, however, that biosphere-
compatible construction should not be adapted to 
maximize the economic downturn based on the linear 
model of production inherited from the country 's 
post-industrial revolutions. The linear model assumes 
that the cost of raw materials (resources) increases 
in direct ratio to the volume of production, which 
contradicts the task of conserving them. The circular 
economy model is optimal under conditions of 
sustainable development. Therefore, a simultaneous 
transformation of relations in the national economy as 
a whole is necessary.

References:
Mann, S. R . (1992). Chaos Theory and Strategic Thought. Parameters, vol. XXII, pp. 54–68.
Tsygychko, S. P. (2012). Ekologhija v arkhitekturi i mistobuduvanni [Ecology in architecture and urban planning]. 
Kharkiv: KNAMG. (in Ukrainian)
Tsygychko, S. P. (2009). Arkhitekturna ekologhija jak zasib zabezpechennja stalogho rozvytku suchasnykh mist 
[Architectural ecology as a means of ensuring sustainable development of modern cities]. Kommunalnoe hozyaystvo 
gorodov [Municipal economy of cities], vol. 90, pp. 21–25. 
Shpakova, H. V. (2019). Ekologho-ekonomichnyj mekhanizm rozvytku biosferosumisnogho budivnyctva v 
Ukrajini: teorija, metodologhija, praktyka [Ecological and economic mechanism of biosphere-compatible 
construction development in Ukraine: theory, methodology, practice]. Kyiv: ArtEk Publishing House.  
(in Ukrainian)
Shpakova, H. V. (2020). Teoretyko-metodologhichni zasady formuvannja ekologho-ekonomichnogho mekhanizmu 
rozvytku biosferosumisnogho budivnyctva v Ukrajini [Theoretical and methodological principles of ecological and 
economic mechanism formation for biosphere-compatible construction development in Ukraine] (Doctor of 
sciences thesis), Kyiv: Kyiv National University of Construction and Architecture.
Warhurst, A. (2002). Sustainability indicators & sustainability performance management. Mining and Energy 
Research Network, vol. 43. 
Smovzhenko, T. S., & Skrynnyk, Z. E. (2015). Ukrajinsjka ljudyna v jevropejsjkomu sviti: vymiry identychnosti 
[Ukrainian man in the European world: dimensions of identity]. Kyiv: UBS NBU. (in Ukrainian)
Ottman, J. A., & Reilly, W. R . (2006). Green Marketing : Opportunity for Innovation. Booksurge Ltd. P. 288.