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Carbon Accounting Process: Key Challenges & Risks in Construction


Carbon Accounting refers to the methodologies used to quantify the amount of GHG emissions produced directly and indirectly from an organisation’s activities. The Carbon Accounting process is daunting for many firms, with questions around whether there is a need to undertake the process at all and if so, where to start. It’s as complex as financial accounting, but in contrast, carbon accounting is a new space.


We have considered some of the benefits associated with the Carbon Accounting process and made the connection between Carbon Accounting and Net Zero/Sustainable Construction. The likelihood is that regulation and legislation will continue to push the agenda forward.


The UK Government introduced new rules requiring all companies bidding for government contracts worth more than £5 million per year to commit to achieving Net Zero emissions by

2050. The likelihood is that regulation and legislation will continue to push the agenda forward.


The focus on reporting emissions will play a significant role in reducing carbon emissions within the Government supply chain and lend itself to the transition to a low carbon economy. Carbon Accounting forms the basis of any and all reporting efforts whether that be at the Asset level, Project Level, Organisation Level, City or Country.


What are the Key Challenges and/or Risks?


  • Lack of mandatory emission reduction targets for the construction process, material extraction and operational carbon.

  • The lack of certification of materials to enable construction firms to make positive choices.

  • Lack of transparency and accessibility of data related to operational energy and embodied carbon of materials.

  • Lack of mandatory operational energy targets

  • Slow response of the construction industry to digitisation

  • Regulation related to mandatory carbon reporting is tightening.

  • Organisations that fall outwith the SECR framework are expected to measure and report on environmental performance or risk losing out to competitors.

  • Environmental risks are material to the operations and supply chains of the majority of businesses.


Start preparing for the future


Carbon accounting is still an evolving process. However, businesses are already implementing standardised approaches to carbon accounting. Regulations such as Streamlined Energy and Carbon Reporting (SECR) are beginning to deliver some consistency in businesses’ carbon reporting. With the UK Government already committed to making a meaningful change to combat climate change, businesses need to prepare for the upcoming regulatory changes around sustainability reporting. Regulators, consumers, and investors expect businesses to act responsibly to make a real impact against climate change.


Carbon accounting is not a one-size-fits-all approach. We can help your business develop and implement a strategic sustainability roadmap to gain a competitive advantage and make a positive impact. If you are ready to start carbon accounting, get in touch with our team.

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