The benefits of building carbon neutrality

Carbon neutrality is an imperative global goal to halt global warming. But it can also have a significant benefit on a company’s performance.

The risks of climate change now need little introduction. We are already starting to live with the impacts of a changing climate on communities, businesses and infrastructure. Within the construction industry, it is well established that higher and more prolonged periods of heat have significant impact on worker productivity and increase the risk of thermal overheating in new build homes, not to mention the risks posed to sites by more frequent flooding.

The most recent Intergovernmental Panel on Climate Change (IPCC) report in October last year delivered the unnerving news that we have less than a 12-year window to act on climate and limit global warming to 1.5 degrees Celsius. It made plain that limiting warming to 2°C will not be enough to prevent the most serious impacts. In order to achieve this goal, we need to reach global net zero carbon emissions by 2050.

And now there is a more public face to the voice for change. Protests by Extinction Rebellion and school children around the globe have been recently dominating headlines, meaning climate change has suddenly pushed its way to the forefront of public consciousness with pressure for action on carbon neutrality rising with it.

The UK built environment contributes 40% of the UKs total carbon footprint of which the large majority occurs in downstream building, but new construction contributes 48 million  tonnes of CO₂ annually¹. With this in mind, the construction industry is not only vulnerable to growing demands and expectations to help deliver more sustainable and more climate resilient infrastructure, but to contribute to reducing emissions across their own operations..

There is also opportunity for the construction sector. As we look to decarbonise the economy, building low carbon, energy efficient infrastructure will be essential. The construction industry will be a key player in this and the opportunities for innovation and ultimately more sustainable buildings and spaces will continue to grow. Also significant is the opportunity when taking steps to reduce operational emissions. By reducing energy usage from hydrocarbon-based fuels during construction, in addition to lowering emission levels, operation costs can be reduced and project margins improved.

Going carbon neutral is, a journey, but there are steps to take to make it manageable, unlocking business benefits along the way.

Why tackle climate?

The calls for carbon neutrality might appear highly ambitious and even a little doom-mongering at times, but they also present significant opportunities for business – from meeting increasing consumer preference for low carbon products; costs saved through energy reduction programs; greater innovation to achieve competitive advantage; enhancement of brand reputation; better preparedness for future legislation and the building of more financially and climate-resilient supply chains.

Many stakeholders now want to see that companies have properly accounted for climate change. Consumers are increasingly opting for more environmentally friendly brands, with employees wanting to work for more responsible companies³ and the investor community making plain their commitment to withdrawing shareholder backing if climate is not adequately addressed.⁴ Tackling climate should now be seen as an opportunity to keep stakeholders happy, secure business and safeguard long-term investment. There is also the opportunity for contract-winning credentials. For example, government and large civil construction projects now require that contractors have PAS 2080 certification – the Carbon Management in Infrastructure standard.

With any sustainability or climate action plan, it is usually advised to carefully assess the risks and opportunities specific to your business. The major physical risks of climate change are no doubt well-understood in the construction industry with its large and complex supply chains, reliance on natural resources and vulnerability to extreme weather and changing climate.

How do you achieve carbon neutrality?

Setting science-based targets is key. Globally, 24 companies from construction-related sectors have already committed to do so. While ambitious, these targets provide a roadmap to reducing emissions in line with the trajectories needed to adequately limit warming.

So how do you get there? This can be challenging for the construction industry where the majority of emissions are in the supply chain. However, many will find that around 80% of the total supply-chain spend will be with fewer than 100 suppliers and it is by prioritising and engaging the largest of these suppliers that you can have the biggest impact. Implementing procurement criteria and collaborating with your suppliers can often improve their credentials, helping them to grow and enabling you to gain preferential procurement deals whilst reporting reduced emissions

Energy efficiency processes will play a big part and the good news is, these come with the potential for substantial financial savings. With the rise in Climate Change Levy rates from April onwards, this could also avoid growing taxation costs. Incentivised on-site and office energy reduction measures will help companies to achieve continued improvement in energy efficiency. The benefits of this will be compliance with current legislation like the Energy Savings Opportunities Scheme (ESOS) as well as encouraging engagement with your internal stakeholders who will ultimately be key to helping you reach your targets.

Renewable energy often plays an important role in a carbon neutral commitment. This also comes with more good news in that renewable energy has been reducing in cost and competing with fossil fuels. Research shows that 75% of FTSE 100 companies now use renewable energy. Generating renewable energy or purchasing renewable energy via assured renewable energy certificates, allows companies to confidently report that the energy used is zero carbon. On-site there are now an increasing number of hybrid plants available (some which have moveable solar panels to generate energy) and the increased fuel efficiency saves money with the added bonus that they create far less noise – often a point of contention with site neighbours.

Tackling remaining emissions across your value chain can be supported through offsetting with verified projects. The additional opportunity here is that you select projects which mean most to you and your stakeholders. Verified high quality credits come from a variety of social impact projects, usually in developing countries, which have a real and important effect on peoples’ lives and the environment. Such projects can focus on deforestation, health, renewable infrastructure and biodiversity. Projects like this are aligned to the United Nations’ Sustainable Development Goals and, therefore, enable an organisation to demonstrate their commitment to these global objectives which can be included in their sustainability reports.

EcoAct, a leading carbon reduction consultancy, talk further about opportunities for the building industry to go carbon neutral in a case study on Monday!

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