Lean

Scope 1 & 2 carbon emissions

Since establishing its baseline in 2010, Balfour Beatty has reduced its scope 1 and 2 emissions1 by 53,841tonnes of CO2 equivalent (CO2e) which equates to a 15% reduction.

The Group’s carbon intensity in CO2e/£m revenue has dropped from 41.5 tonnes of CO2e/£m to 30.1 tonnes of CO2e/£m since 2010 which equates to a 27% reduction.

Balfour Beatty has seen a decrease in its absolute Scope 1 and 2 emissions from 310,868 tonnes of CO2e to 304,142 tonnes over the last year and has also seen a decrease in its emissions intensity over the same period from 35.2 tonnes of CO2e/£m to 30.1 tonnes of CO2e/£m.

Figure 1: Scope 1 & 2 emissions in tonnes of CO2e/£m

Scope 1 and 2 Carbon Emmissions

Over the last year the energy management unit has made significant progress in reducing energy and fuel consumption and associated Scope 1 and 2 emissions.

Balfour Beatty’s 2020 goal is to achieve a 50% reduction per £ million revenue of its Scope 1 and 2 emissions (against a 2010 baseline).

Achievement of this target will mean reduced operating costs and therefore improved value to customers and shareholders. Additionally, a number of customers have expressed an intention to prequalify contractors on the basis of their carbon performance in the future.

Table 1: Scope 1 & 2 emissions in tonnes of CO2e

         

Absolute tonnes of CO2e

 

Base year 2010

2013

2014

2015

2016

Scope 1

283,821

249,021

221,679

238,685

222.485Δ

Scope 2

74,162

73,155

71,208

72,183

81,657Δ

Total gross emissions

357,983

322,176

292,887

 310,868 

 304,142 

Total carbon emissions per £m revenue

41.5

30.3

30.2

35.2  

      30.1

 

1Scope 1 emissions include those resulting from the combustion of fuel and operation of facilities, scope 2 emissions result from the purchase of electricity, heat, steam and cooling for own use. The full description of Balfour Beatty’s definitions can be found within its reporting guidance found at: www.balfourbeatty.com/GHSS 

Gas oil used for generators and plant constitutes 26% of Balfour Beatty's carbon emissions

In 2016 Balfour Beatty undertook energy audits across its projects to identify energy savings and has since been conducting a number of trials on new solutions and technologies.

The Group has taken a number of measures to reduce its emissions and has introduced a policy of connecting to the electricity grid on construction sites early on in order to avoid running generators, which have a greater carbon footprint and are expensive to operate. As a result some of its scope 1 emissions have moved to scope 2.

In the UK, additional scope 1 savings have been achieved setting up a formal process for sizing generators at project mobilisation stage through the Energy Management Unit. This ensures that power needs of all projects are reviewed in detail and that the most appropriate solution used such as opting for lean-pair generator set-ups or hybrid generators and batteries to provide power at low loads such as at night, automatically controlling the generator(s).

Further contributions have come from the use of more efficient equipment such as LED lighting rigs that draw less power and the use of eco-site cabins that make use of lighting proximity detectors, enhanced insulation and timers on heaters.

Balfour Beatty has been working closely with its supply chain to inform areas for improvement such as on telemetry to reduce the idling of equipment.

Diesel and petrol accounts for 44% of Balfour Beatty's emissions

In the UK its average emissions for all new passenger vehicles was 104g CO2/km. This is significantly below the previous EU 2015 target of 130g CO2/km and only slightly above the EU 2020 target of 95g CO2/km.

Further reductions have been achieved by the uptake in use of tele- and web-conferencing and a drive to reduce travel costs, significantly reducing its Scope 1 and 3 carbon emissions from associated travel.

Balfour Beatty Plant & Fleet Services was awarded ‘Cost Saving Initiative of the Year’ at the 2016 Fleet News Awards for its efforts to improve fuel efficiency and its advanced reporting and telematics system that are changing driver behaviours.

Electricity, gas and boiler fuel account for 29% of Balfour Beatty's emissions

The Group is continually looking at ways to reduce its carbon emissions from its offices, depots and factories. In 2016, the Group funded energy efficiency improvement measures for some of its key locations by undertaking energy audits and installing energy efficiency measures such LED lighting, BMS controls, boiler controls, voltage optimisation systems, and variable speed drives.

Balfour Beatty has been undertaking energy surveys on project sites to identify opportunities reduce power consumption.

Apart from improving the efficiency of its buildings, Balfour Beatty is also improving energy efficiency across its operations by raising awareness.

GHG reporting and assurance

Balfour Beatty’s greenhouse gas (GHG) emissions are reported in accordance with the UK Government’s GHG reporting requirements covering all six Kyoto gases.

The Group uses the operational control approach under the GHG Protocol Corporate Accounting and Reporting Standard as at 31 December 2016 to report emissions from its operations around the world.

However, Balfour Beatty has chosen not to report against the market-based approach. Even though Balfour Beatty does procure significant amounts of renewable electricity, the average DEFRA conversion factors have been used for carbon reporting purposes in order not to detract from reducing energy intensive operations.

The Group’s energy consumption in MWh is shown in table 2 to allow readers to make more informed comparisons of its energy use.

Table 2: MWh of energy used across Balfour Beatty’s operations.

     

MWh

Fuel

2014

2015

2016

Electricity

130,597

169,678

142,477

Heat & Steam

1,476

2,603

4,561

5% petrol blend

32,786

11,933

53,096

Natural gas

11,620

18,169

22,085

Industrial gases

7,014

2,828

6,193

5% biodiesel blend

376,807

476,488

477,401

Gas oil (Red diesel)

227,731

288,143

292,501

100% mineral diesel

85,944

20,025

16,636

100% mineral petrol

47,056

44,795

12,939

LPG

149

185

571

Biodiesel

30

0

410

E85 petrol

42

5,479

58

CNG

5

1

2

Boiler fuel

374

921

1,582

Total

921,631

1,041,248

1,030,512

 

Although Balfour Beatty’s Scope 1 and 2 CO2e emissions dropped by 2% (6,726 tonnes) over the period from 2015 to 2016, the number of MWh of energy dropped by approximately 1% (10,736 MWh for energy).

This difference can be explained by the fact that different fuels have different carbon conversion factors, with some fuels attracting greater carbon conversion factors than others. Furthermore, the MWh table does not include fugitive emissions.

Table 2 illustrates that there has been a greater switch towards biofuel blends for petrol and diesel accompanied by a reduction in both mineral petrol and diesel.

Balfour Beatty’s Scope 1 and 2 CO2e emissions include emissions from assets that are otherwise not referred to across the rest of the financial statements as defined in Balfour Beatty’s reporting guidance www.balfourbeatty.com/GHSS. Balfour Beatty developed reporting guidance specific to its business for the calculation of GHG emissions as well as other sustainability metrics.

The Group has determined and reported the emissions it is responsible for within this boundary and does not believe there are any material omissions. The Group uses the UK Government’s carbon conversion factors that were updated in 2016 to calculate its emissions into equivalent tonnes of carbon dioxide (CO2e) and the IEA’s September 2016 set of international conversion factors for electricity (Scope 2) except for the UK where the UK Government’s conversion factors were used as they are more up to date.

The Group has removed the Scope 1 and 2 data for Sakti, Dutco Balfour Beatty and BK Gulf from the original 2010 baseline and subsequent years.

KPMG were engaged to undertake an independent limited assurance engagement, reporting to Balfour Beatty plc, using the assurance standards ISAE 3000 and ISAE 3410 over the GHG data that have been highlighted in this report with the symbol Δ. Their full statement is available at: www.balfourbeatty.com/iia .

The level of assurance provided for a limited assurance engagement is substantially lower than a reasonable assurance engagement. In order to reach their opinion, KPMG performed a range of procedures over the GHG data including:

  • interviewing management responsible for the data
  • agreeing a selection of the data to the corresponding source documentation at business unit level
  • performing analytical procedures over the aggregated data at Balfour Beatty Group level.

A summary of the work they performed is included within their assurance opinion.

Non-financial performance information, GHG quantification in particular, is subject to more inherent limitations than financial information. It is important to read the GHG data in the context of the full limited assurance statement and the reporting criteria as set out in the Balfour Beatty reporting guidelines available at: www.balfourbeatty.com/GHSS

Gammon Construction, the Group’s joint venture in Hong Kong/Singapore, accounts for approximately 37% of the Group’s Scope 1 and 2 emissions. In 2014, it became the first construction company in Hong Kong to be awarded the CarbonCare® Label that covers all of its operations in Hong Kong (except joint venture projects). This is in addition to the ISO 14064-1 international standard for quantifying and reporting greenhouse gas (GHG) emissions it holds. Its Scope 1 and 2 GHG emissions are also independently verified by SGS.

Waste intensity

At present, there are limitations on the completeness of Balfour Beatty’s waste data, making like for like comparisons of its annual data difficult. Comparing waste data year on year will also vary depending on the type of projects the Group undertakes and what stage the projects are at. Balfour Beatty is working with its operating businesses to improve this.

In 2016, over 3,298,099 tonnes of waste that Balfour Beatty produced was recycled. This equates 95% of the total amount of waste that Balfour Beatty produced in 2016, but does not include materials that were reused directly without entering the waste stream.

As illustrated below, Balfour Beatty has steadily reduced the total amount of waste it produced/£m revenue over the last five years. This includes both materials sent to landfill and materials that are recycled.

Figure 2: Tonnage of waste produced/£m revenue

Waste Intensity 2016

Water intensity

Water intensity is an optional indicator in Balfour Beatty’s sustainability strategy. It is measured in cubic metres per £m revenue. Depending on the geography the Group operates in, water can be a sparse or abundant commodity. Almost all of its operating businesses in the UK and Hong Kong reported on water. None of its North American businesses elected to monitor water use as an optional indicator.

Since improving its approach to monitoring water the Group has seen a decrease in its water intensity in the areas of its business where water is monitored. 

Figure 3: Water intensity

 Water Intensity

The Group’s focus has largely been on supporting its clients, especially in the utilities business, to reduce water consumption through innovation. The Group has reduced water consumption in a number of its buildings by introducing water saving urinals, improved flush controls, and flow restrictors. However, its water consumption is heavily dependent on the projects it carries out. Damping down (especially in warmer climates) and wheel washing are key sources of water use. 

Supply chain management

Over 2016 Balfour Beatty continued to improve its approach to sustainable procurement. Its UK’s Sustainable Procurement strategy recognises the critical role of its supply chain in helping make Balfour Beatty a more sustainable business.

The Group published a new sustainable procurement policy and guidance for buyers and suppliers which clarified its expectations and helped Balfour Beatty address new and better understood risks and opportunities in areas such as circular economy, modern slavery and responsible sourcing. It received a WWF Timber score of 3 out 3 for our performance on sustainable timber in 2016.

Balfour Beatty is a funding Partner and Gold Member of the Supply Chain Sustainability School, which aims to improve sustainability performance throughout the construction and infrastructure supply chains. As a result, Balfour Beatty has held a number of engagement events and workshops with its supply chain improving their knowledge on sustainability. The number of its suppliers registered with the school is now over 2,000 and increase of over 27% from 2015.  Balfour Beatty has incorporated more than 30 e-learning modules and toolbox talks into its own Balfour Beatty academy and 360 platform, making them available to Balfour Beatty employees.

In 2014 Balfour Beatty was recognised by the former Prime Minister, David Cameron, when it became the first UK company to ever publicly commit to spend £1billion with SMEs. Since 2013 Balfour Beatty has spent over £4.6bn with SMEs confirming its status as the largest net spender with SMEs of all main contractors and one of the biggest contributors overall to the government’s 33% SME spend target. In 2016 Balfour Beatty’s approach was rewarded when it received the MSDUK Inclusive procurement award which recognised Balfour Beatty’s commitment to minority owned businesses such as women owned businesses with whom it spent £118m in 2016 up from £68m in 2015.

Balfour Beatty’s UK operations adhere to the Government’s Fair Payment Guidelines. In 2010 it was the first in its sector to sign up to the Prompt Payment Code and adhere to the 11 principles of the Construction Supply Chain Charter. It also continued the roll out our supply chain finance initiative, providing suppliers with faster access to their payments than their standard payment terms for work carried out and enabling the supply chain to keep their cash flows operating at a maximum. It continued to increase the use of payment cards to help suppliers receive payment more quickly.

In both the US and UK construction businesses its vendor qualification process has been expanded to identify vendors with sustainability programs in place and to allow project teams to provide feedback on vendor performance specifically around safety, sustainability, schedule and quality.   As contracts are renegotiated with Impendi in the USA, under BB Group’s procurement strategy, Balfour Beatty ensures vendors include sustainable measures as a key part of their revised service offerings.  That means providing data about carbon use or matching green product pricing with less sustainable options.  In the UK, Balfour Beatty has introduced Balfour Beatty Core to simplify the process for lower risk suppliers.

The Group’s US Investments business implemented a “green purchasing” program through HD Supply.  The program identified high use maintenance supplies across over 44,000 homes managed by BB Communities in the U.S., then carefully selected more sustainable products.  The energy and water saving products were procured at a significant discount—providing reduction of expenses, conservation of natural resources, and increased profitability across the portfolio. 

Gammon Ltd., Balfour Beatty’s joint venture construction arm in Hong Kong, has a comprehensive green procurement programme in place and has adopted PAS 2050 (Specification for the assessment of the life cycle greenhouse gas emissions of goods and services) for 25 of its ready mix concrete products and the Construction Industry Council’s carbon label for ten of its concrete mixes. Six of these were graded as “Outstanding” and four were graded “Highly Commended”. The independent verification under the scheme provides clients confidence in the accuracy of products’ carbon footprint when selecting lower carbon construction materials. Gammon Construction Ltd. is currently helping its cement supplier with their application and will apply for carbon labels for more of its concrete mixes in the future.

Gammon Construction Ltd. has worked with its fuel supplier since 2013 to launch the use of B5 biodiesel to reduce its carbon footprint and facilitate the use of recycled cooking oil. In 2016, it became the first and only construction company in Hong Kong to use Biofuel B5 in 100% of all of its plant and equipment on its own project sites. It also introduced a take back scheme for end-of-life road barriers for these to be recycled into new barriers and other products. Over 95% the timber falsework and formwork is from sustainable sources. As part of its ISO 50001 system, Gammon Construction has developed an energy efficiency purchasing specification to integrate energy efficiency into its purchasing decisions.

The company has also been working with its paint suppliers to become accredited to the Hong Kong Green Building Council’s (HKGBC) Green Product Accreditation and Standards (HK G-PASS) scheme. The HK G-PASS offers standardised criteria to assess the environmental performance of building products with the aim to reduce the use of harmful substances that could pose a threat to health or the environment.

Gammon Construction Ltd. won “Asia’s Best Supply Chain Reporting” award at the 2016 Asia Sustainability Reporting Awards in Singapore. The award, organised by CSR Works, recognises sustainability reporting leaders in Asia.