A report released yesterday by the BBC highlighted that the construction companies in the UK are not disclosing the full extent of their carbon impacts. The UK Chief Executive for Skanska, Gregor Craig, explained that companies calculate their own emissions and those figures often don’t include the environmental costs of their supply chain.
Following the report released by the Committee on Climate Change, on 2nd May, calling for the UK to be a net-zero economy by 2050, Skanska have become one of the first infrastructure builders to set themselves an ambitious, yet achievable target of net–zero carbon emissions in the UK by 2045. The company disclosed that they have directly emitted approximately 35,000 tonnes of CO2 every year since 2010 but the figure is more than 10 times higher if suppliers’ emissions are also accounted for. The report confirmed that construction companies are largely disclosing their direct emissions from offices, plants and transport fleets but almost no information from supply chains.
Mr Craig highlighted that one of the biggest carbon emitters is concrete, due to the cement within it. Speaking to the BBC, he said that historically, investors have put returns ahead of carbon targets but that they’re now realising that the greener approach can cut costs significantly so carbon reduction is now seen as ‘good for business’.
Since 2013, quoted UK companies have been mandated to disclose their direct emissions in their Strategic/ Directors Reports, and as this framework, and the carbon reduction commitment scheme (CRC) have moved aside to make way for the new Streamlined Energy and Carbon Reporting Framework (SECR), which became effective from 1st April 2019, large UK companies, both quoted and unquoted, have to disclose their direct scope 1 and 2 emissions in their Annual Reports.
The main change for the SECR framework is that, although the large unquoted companies need to disclose only scope 1 and 2 emissions and energy use from operations within the UK, the quoted companies, now also have to include their global energy use and emissions, which will aim to capture more of the ‘hidden figures’ spoken of earlier in this article. The new framework still requires companies to only need to disclose scope 1 and 2 (direct emissions) as a mandatory requirement but does encourage voluntary disclosure of scope 3 (indirect/ suppliers emissions) to improve transparency and honesty from companies.
As mentioned in the paragraphs above, investors, shareholders and stakeholders are becoming increasingly interested in the environmental performance of companies and they want to see the whole picture, including supply chain emissions before making crucial investment decisions. Whether directly, or indirectly, if industry doesn’t work towards the net- zero economy, all businesses large and small will realise some impacts of climate change. Investors want to see that companies are aware of the risks posed, actively measuring and reporting their direct and third party emissions, and striving towards reducing these to mitigate the risks. For the companies who are needing to identify ways to reduce their energy use and emissions, using an independent consultant is often more beneficial that completing the work in house. Consultants have experience in analysing energy use and emissions data, helping to report in the most transparent way, and highlighting key recommendations for making reductions, whilst also ensuring the recommendations are cost effective for the company so that cost savings are realised.
Our consultants, at Elmhurst Energy Consultancy like to use two phrases –
“What isn’t measured can’t be managed” – if you’re not aware of your energy use and emissions, how can you look for ways to reduce them?
“The cheapest energy will always be the energy you don’t use” – many companies look to change energy provider to save costs on their energy bills rather than looking to reduce the energy they’re using in the first place, which will create guaranteed, and longer term savings.
To find out more about how our team can assist in your compliance with SECR or completing bespoke energy audits to reduce your energy use and emissions, please visit our website www.elmhurstenergyconsultancy.co.uk or call the team on 01455 883 259.