If you run a construction business, you have probably heard more and more about carbon emissions, carbon footprints and Scope 1, 2 and 3 reporting.
And if your first thought was, “Do I really need another huge reporting exercise?”, you are not alone. The good news is that building a credible carbon footprint does not mean suddenly creating a corporate sustainability department, buying expensive software or spending months collecting data. For most smaller subcontractors, it is about understanding what you already use, keeping sensible records and gradually getting better at measuring it.
What do Scope 1, 2 and 3 actually mean?
First, the simple version
The three scopes are basically a way of sorting different types of greenhouse gas emissions.
Scope 1 is what you burn or release directly.
Think about fuel used in vehicles, plant, generators, boilers or other equipment that your business owns or controls. If your company has diesel vans, petrol cars, excavators or generators, the fuel they use will generally be part of your Scope 1 emissions.
Scope 2 is the energy you buy.
This mainly means purchased electricity, although the exact treatment can depend on the reporting approach being used. So if you have an office, workshop or depot and you pay the electricity bill, that electricity consumption is likely to form part of your Scope 2 footprint.
Scope 3 is everything else in your value chain.
This is the broad one, and it is where things can start to sound complicated. Scope 3 can include emissions connected to things you buy, services you use, waste, business travel, commuting, transportation and other activities linked to your business.
For a subcontractor, that could mean materials you purchase, waste sent for disposal, hired equipment or travel connected with your work. This does not mean you suddenly have to measure every tonne of carbon produced anywhere in your supply chain with perfect accuracy. It means identifying the activities that are relevant to your business and working out what you can reasonably measure.
The goal
Scope 1, 2 and 3 are simply different ways of understanding where your emissions come from, and knowing which activities sit where gives you a starting point for measuring them. The ultimate goal is to reduce or eliminate emissions wherever possible, with offsetting considered only for unavoidable residual emissions. This aligns with the Government’s approach to reach net zero by 2050.
What are clients actually expecting?
This is where smaller companies can sometimes get caught up in the wrong mindset. A main contractor may have a detailed carbon reporting system covering its entire operation and supply chain. That does not automatically mean a small subcontractor needs to replicate it. What clients usually need from subcontractors is useful, consistent information.
For example, they may ask how much fuel you have used on a project, how much electricity your business consumes, what materials you have purchased or whether you can provide information about your emissions. The exact requirements will vary from client to client and project to project. The sensible approach is to find out what information your customers actually need, rather than trying to measure absolutely everything from day one.
If you’re unsure where to start, need help making sense of what a main contractor is asking for, or simply don’t have the time to work it out yourself, our consultancy can help. Get in touch and we can talk through what you need and find a practical approach that works for your business.
