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Understanding scope 1, scope 2 and scope 3 carbon emissions in a construction context

Brutalist concrete architecture - low carbon materials (the net zero innovation partner to the construction sector)

The Climate Change Act 2008 commits the UK government by law to reduce emissions by at least 100% of 1990 levels by 2050. 

For the UK to reach its legally agreed net-zero-by-2050 goal, companies from all sectors of the economy must work together to reduce their carbon emissions. 

To cut emissions across an organisation, companies must know where they come from, report them and set targets to reduce their carbon footprint. 

The Greenhouse Gas Protocol - an organisation that provides a standard framework and tools for measuring emissions - divides greenhouse gas emissions into three Scopes.  

According to the GHG Protocol, Scope 1 and 2 are mandatory to measure and report, whereas reporting Scope 3 emissions GHG protocol has previously been voluntary.

The Scopes: 

Scope 1 emissions: 

A mandatory Scope - emissions directly caused by a company operating things it controls and owns. These emissions arise from the direct use of fossil fuels and industrial activity. For example, gas or fuel use in running machinery, driving vehicles or heating buildings. 

In short: Direct emissions are sources that are owned or controlled by the reporting organisation.

Scope 2 emissions: 

A mandatory Scope - emissions indirectly caused by the consumption of purchased electricity, heat or steam. Installing solar panels or sourcing renewable energy would cut a company's Scope 2 emissions. 

In short: Indirect emissions are sources owned or controlled by a third party but whose emissions are nevertheless influenced by the reporting company.

Scope 3 emissions: 

These are also indirect emissions and relate to all other greenhouse gas emissions that companies have no direct ownership or control over - but are indirectly responsible for throughout their value chain. 

They include the use of sold products, business travel, extraction and production of purchased materials and fuels. 

This Scope also requires measuring embodied carbon -  the CO2 emissions associated with materials and construction processes. This includes any CO2 created during the manufacturing of building materials, the transportation of these materials to the job site and the construction practices used (Carbon Cure, 2020). 

Measuring Scope 3's emissions are optional with the GHG Protocol; however, they can make up a significant proportion of the CO2e emissions of a construction company.

Scope 3 emissions are currently included in various policy frameworks, such as the UKGBCs’ Whole Life Carbon Roadmap, the UK Net Zero Strategy and the Climate Change Committees’ Sixth Carbon Budget. 

How do Scope 1 2 3 emissions apply to construction?

"The life of a building includes many components, phases, renovations and eventual decommissioning. All of these use energy and create carbon emissions." Hines, 2022

The construction sector consumes abundant resources during construction, operation and demolition - generating high GHG emissions. 

For a typical construction project, Scope 1 2 3 emissions could include the following:

Scope 1: The emissions caused by burning diesel fuel in trucks.

Scope 2: Purchased electricity, steam, heating or cooling.

Scope 3: Employee travel, transportation of goods, machinery manufacturing and the manufacturing of materials like steel and concrete.

Why Scope 1 2 3 matter for construction: 

The built environment accounts for 39% of the global gross annual carbon emissions (World Economic Forum, 2022). 

For the construction sector to achieve net zero carbon, companies must measure and report on Scope 1, 2 & 3 emissions to comprehensively understand their impact on climate change.

With the UK committing to reach net zero carbon emission by 2050 and growing scrutiny from insurers, lenders and investors and changing consumer demands, there’s ongoing external pressure for the building industry to measure and report their Scopes. 

The sector has a significant role to play in the coming years if it is to see a drastic reduction in its emission footprint - which is important for adjusting to future regulation and consumer demand. 

By calculating Scope 3 emissions, construction companies can support their ESG policies, boost efficiency and productivity across their value chains and set themselves apart as a sustainability leader in the sector. 

It is also a crucial part of considering the sustainability of an organisation. The CDP, which runs the primary global disclosure system for investors, companies, cities, states and regions, found that emissions from supply chains in its reporting companies were 11.4 x greater than a corporation's own operational emissions.

Scope 3 emissions and whole life assessments are increasingly a focus for tendering decisions and regulators.

What are the benefits of measuring Scope 1, 2 and  3 emissions?

Measuring emission Scopes can improve businesses' transparency and stakeholder engagement, identify climate risk over operations and value chains and act on resource-saving climate opportunities. 

For example, identifying emissions hotspots in supply chains, construction companies can better understand their reputational, resource and energy risks. 

Moreover, they can identify which suppliers are leaders and which are laggards in terms of their sustainability performance. 

By doing this, companies can have a complete and accurate picture of their emissions footprint and use the information to prioritise emission reduction activities. Understanding total impact also readies a company for future reporting to investors and regulators.

This is especially important for regulation. For those acting in the EU, new rules now require large companies and listed companies to publish regular reports on their environmental risk and impacts.

Frameworks for Scope 1, 2 and 3 emissions reporting, accounting and disclosures: 

The Greenhouse Gas Protocol supplies the most widely used accounting standards with a range of tools to aid the construction sector in measuring scope 1, 2 and 3 emissions.

Click here for the resource: 

The Carbon Trust helped to develop the scope 3 guidance for the GHG protocol. It is a group of experts helping companies understand their carbon footprints including for organisations, value chains and products.

Access their support here: 

The CDP runs the primary global disclosure system for investors, companies, cities, states and regions. 

Learn more about their disclosure tools and standards: 

The Task Force on Climate-Related Financial Disclosures (TCFD) released climate-related financial disclosure recommendations in 2017 designed to help companies provide better information to support informed capital allocation. 

Click here for more on TCFD: 

Takeaways on scope 1 2 3 emissions: 

  1. Regulators and customers are increasingly pressuring the construction sector to measure, report, and regulate their carbon footprint with new regulation from the EU on corporate sustainability reporting in January 2023.
  2. Scope 1 and 2 emissions are mandatory to report, but Scope 3 emissions are optional. Still, measuring all three scopes can help construction companies understand their impact on climate change and identify opportunities for improvement.
  3. Measuring all three scopes can improve transparency, stakeholder engagement, and readiness for future reporting to investors and regulators. Understanding total impact is crucial for prioritising emission reduction activities and maintaining a competitive edge in the industry.

Material choices are likely part of your scope 3 emission footprint. 

Our low carbon concrete aggregate OSTO is tackling the emissions of concrete which currently makes up 8% of global carbon emissions. 

Learn more about OSTO.