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30 September 2021

Scope 3: The Main Challenge In Carbon Footprint

As the need to reduce our greenhouse gas emissions becomes increasingly urgent, understanding the sources of these emissions is crucial. By understanding the carbon footprint of an asset or a construction project, we can identify the proper investment opportunities to reduce emissions. But these emissions are not always easy to track, and in complex projects such as the construction of a building, the number of elements to take into account can be overwhelming.

In the construction of buildings, or infrastructures, some of the emissions happen within the control of the construction company and are therefore easily trackable. This is the case for Scope 1 emissions, representing direct emissions from the company's fixed and mobile installations. For example, in a construction project, this could be the electricity generators on a work site. Scope 2 emissions, resulting from purchased electricity, cooling, and heating, are also relatively simple to track. Power meters and bills are common ways of tracking scope 2 emissions. The main challenge, however, is in tracking  Scope 3 emissions.

Scope 3 emissions are indirect emissions, upstream and downstream of the companies' activities that are not included in the scope 1 and 2 emissions of the company. In other words, it’s the emission resulting from the use of any means, services, materials, products, etc., provided by a third party to accomplish a given project. For example, scope 3 emissions in a construction project, could refer to waste processing, employee travel, transportation of goods, mining and production of materials, and manufacturing of machinery. Even though the construction company does not have direct control over these emissions, they still fall under the project's Scope 3 carbon footprint.

In contrast to Scope 1 and 2, Scope 3 emissions are both diverse and difficult to track. The main problem is that these emissions are generated by entities which the reporting company has less control over.

Approximately 75% 1 of the total emissions in the lifetime of a typical building happen during the construction phase. In a construction project, the Scope 3 emissions, notably the construction supplies, amortization of the machinery, freight of the personnel, and services, account for approximately 80% 2 of the total emissions. This explains why it is so important to understand and track the Scope 3 emissions.

Today, the standard method for calculating the scope 3 emissions is through the use of industry average emissions factors that provide unitary values (tCO2/unit) to estimate the carbon footprint of a supply or service. These emission factors greatly help in estimating the emissions, yet remain quite limited in accuracy. Usually, these emission factors are calculated with data from a restricted geographical area during a limited period of time. This means that the emission factor for a ton of concrete produced in France cannot be applied to the same amount of concrete imported from China. Similarly, the emission factor of a crane manufactured in 2020 does not apply to a crane produced in 2010. Although the emission factor databases are becoming increasingly diverse, they usually limit the accuracy of environmental studies and decision making. For example, the estimations and industry averages used in calculating emissions factors cannot be used to select responsible suppliers, as not all suppliers have the same emissions associated to their product.

Another difficulty in Scope 3 calculation is the limited knowledge that exists for the history of the materials used in the project. Environmental engineers and consultants processing the information on a construction project usually have little information on these factors. For example, in the construction of a bridge, different materials are purchased from multiple countries. While the data regarding the quantity and quality of the material is usually available, information regarding the method of transportation (e.g., boat versus train), method of production (e.g., energy consumed, origin of materials) etc., are not always evident and require more extensive research. Thus, assumptions are made in order to estimate the results. This in turn can cause a significant amount of uncertainty for these calculations.

This uncertainty, which affects over 80% of a company's emissions, calls for better tracking and environmental reporting solutions. Having a detailed understanding of the scope 3 emissions will allow companies to optimize their emissions by selecting responsible suppliers and contractors. This will incite competition among companies and help them gain client trust. Furthermore, it will provide them with a powerful decision-making tool to identify development and investment opportunities for reducing their carbon emissions. According to the GHG protocol for scope 3 carbon emissions, there are 15 categories that can be addressed. Longevity Partners can help our clients Identify Scope 3 emission sources and determine materiality of each source in line with the:

  • GHG Protocol Scope 3 Calculation Guidance
  • UKGBC Guide to Scope 3 Reporting in Commercial Real Estate
  • Target boundary set by UKGBC Advancing Net Zero initiatives

Longevity Partners will estimate emission contributions according to GHG Protocol accounting principles and define Scope 3 emissions boundaries based on the relevance of each emission source and their contribution to our client’s emission inventory. Finally, our team will establish a Scope 3 emissions baseline using the GHG Protocol Quantis Scope 3 Evaluator.

 

Bibliography

[1] CURBED, "How do buildings contribute to climate change?," [Online]. Available: https://archive.curbed.com/2019/9/19/20874234/buildings-carbon-emissions-climate-change.

[2] B. Bidabad, "CARBON FOOTPRINT OF VINCI’S LARGE PROJECTS," 2020. [Online]. Available: http://www.benyaminbidabad.com/wp-content/uploads/2021/07/Internship-Report-VINCI-Construction-Benyamin-BIDABAD_compressed.pdf.