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Carbon Accounting Process: How it relates to Net Zero and Sustainability in Construction

Updated: Jul 26, 2022

Carbon Accounting is fundamental to net-zero carbon and sustainability in construction – because only by measuring and monitoring carbon emissions can an organisation, or a built asset, demonstrate progress towards a Net Zero goal over time.

Carbon Accounting refers to the methodologies used to quantify the amount of GHG emissions produced directly and indirectly from an organisation’s activities. Many businesses use the GHG ‘Corporate Standard’ which classifies emissions into scopes for measurement and reporting:

  • Scope 1 - Direct emissions from facilities or equipment your business owns or controls

  • Scope 2 - Indirect emissions from the energy you buy from suppliers e.g., purchased electricity.

  • Scope 3 - Indirect emissions from the value chain. Scope 3 for manufacturers can cover the use of sold products, Scope 3 for a property management company might include landlord goods and services and occupant purchased energy, and Scope 3 for construction firms would include downstream use of a facility and upstream emissions from materials and suppliers.

Most companies focus on Scope 1 and 2 emissions because they are within their direct control.

However, more firms now see the need to account for GHG emissions to increase efficiency, reduce cost and manage risk along their value chain.

The various frameworks available provide guidance on the processes companies must undertake to complete the Carbon Accounting process, generally, the approach involves the following key steps:

  • Step 1 - Determine the boundary – this will be set out within the chosen framework so choose one that you are comfortable with and fits your business processes well.

  • Step 2 - Set up data collection and management processes. If the organisation does not currently collect any information on GHG emissions, new processes will need to be established.

  • Step 3 - Produce and submit a report - the reporting follows a specific format dictated by the chosen framework. Typically explaining the reduction in carbon measured in terms of carbon intensity with an accompanying narrative around the activities that have been undertaken in order to achieve the carbon reduction.

  • Step 4 - third party verification – this is essential to combat greenwashing and create a level playing field for those willing to set targets and disclose performance.

Benefits of Carbon Accounting

Direct benefits of adopting Carbon Accounting to measure and report environmental performance include: reduced energy and resource costs, avoidance of penalties associated with inaccurate reporting, improved understanding of exposure to the risk of climate change, increased shareholder confidence and strengthening market position. SMEs can secure their position in the value chain by demonstrating their commitment to carbon reduction.

The drivers are many and varied from legislation and regulation demanding greater scrutiny of ‘green’ claims to stakeholder and shareholder pressure giving confidence in the longevity of returns on investment.

How Carbon Accounting processes relate to Net Zero and sustainability in construction

Carbon Accounting is fundamental to Net Zero, Sustainability and the Circular Economy. The need to mitigate carbon in manufacturing, construction and operation drives a circular economy focused on reducing, reusing and recycling materials as well as reducing the emissions associated with operational energy use.

A ‘Fabric First’ approach refers to designing out surplus materials, and carbon-intensive processes by using more natural solutions. Designing buildings to reduce their dependence on artificial lighting, heating and ventilation. Collaboration with the design, construction and operational teams to deliver the best outcome across the entire asset lifecycle is a long-held aspiration of the construction industry and there are many examples of how this approach has delivered mutual benefits.

In the built environment sector, organisations’ biggest climate impacts emerge through the construction and use of the buildings sold, leased and operated. It is estimated that 45% of total UK carbon emissions arise from construction, operation and maintenance of the built environment and 10% of the UK’s carbon dioxide emissions are directly related to construction.

Start carbon accounting

This is a great decision for any business, no matter the size. Making the effort to start carbon accounting can result in a cleaner environment and better profits. Carbon accounting is, amongst others, a strategy which paves the way for excellent climate risk management.

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