Lean

Scope 1 & 2 carbon emissions

Since establishing its baseline in 2010, Balfour Beatty has reduced its scope 1 and 2 emissions1 by 113,745 tonnes of CO2 equivalent (CO2e) which equates to a 31.8% reduction.

The Group’s carbon intensity in CO2e/£m revenue has dropped from 41.5 tonnes of CO2e/£m to 22.3 tonnes of CO2e/£m since 2010 which equates to a 46.3% reduction.

Balfour Beatty has seen a decrease in its absolute Scope 1 and 2 emissions from 299,498 tonnes of CO2e to 244,238 tonnes over the last year and has also seen a decrease in its emissions intensity over the same period from 29.5 tonnes of CO2e/£m to 22.3 tonnes of CO2e/£m.

Graph showing co2e turnover

As evidenced, the Group has made significant progress in reducing energy and fuel consumption and associated Scope 1 and 2 emissions, which is leading to reduced operating costs and therefore improved value to customers and shareholders.

In addition, a number of customers have expressed an intention to prequalify contractors on the basis of their carbon performance in the future which is driving performance in this area.

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). The Group’s performance to date illustrates it is on track to meet this target.

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

 

 

Absolute tonnes of CO2e

 

Base year 2010

2013

2014

2015

2016

2017

Scope 1

283,821

249,021

221,679

238,685

220,530

172,270

Scope 2

74,162

73,155

71,208

72,183

78,968

71,968

Total Scope 1 and 2 carbon emissions

357,983

322,176

292,887

310,868

299,498

244,238

Total Scope 1 and 2 carbon emissions per £m revenue

41.5

30.3

30.2

35.2

29.5

 22.3

Scope 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 in its reporting guidance at Balfour Beatty Reporting Guidance.

Δ Included within KPMG’s limited assurance scope.

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.

Gas oil used for generators and plant constitutes 23% of Balfour Beatty's carbon emissions

The Group has taken a number of measures to reduce its emissions including 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. Over the last year the Group has seen an absolute reduction in emissions from our gas oil consumption leading to reduction of CO2e emissions of 21,316 tonnes.

In the UK, additional scope 1 savings have been achieved by optimising the sizing of generators and the power profile of projects 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 the use of dehumidifiers in our drying cabins, more efficient lighting rigs, 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 45% of Balfour Beatty's emissions

Across the countries Balfour Beatty operates in it has continued to reduce the amount of fuel it uses by using more efficient vehicles. The emissions from vehicle fuels and claimed mileage have dropped from 137,849 tonnes of CO2e to 110,813 tonnes of CO2e with a 22% reduction in the amount diesel used, a 5% reduction in the amount of petrol used, and 7% reduction in the amount of mileage claimed.

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 99.5g CO2/km and only slightly above the EU 2020 target of 95g CO2/km. In part, this has been driven by the wider selection and uptake of hybrid vehicles which now constitute 15% of our car fleet.

Further reductions have been achieved by Balfour Beatty’s efforts to improve fuel efficiency and its advanced reporting and telematics system that are changing driver behaviours. The uptake of tele- and web-conferencing and drive to reduce travel costs, is significantly reducing its Scope 1 and 3 carbon emissions from associated travel.

Electricity, gas and boiler fuel account for 31% of Balfour Beatty's emissions

Overall the group has seen a reduction in electricity, natural bottled gas and boiler fuel related CO2e emissions from 2016 to 2017 of 12,795 tonnes.

This is largely due to continued efforts to reduce its carbon emissions from its offices, depots and factories. In 2017, 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. Other measures such as the rationalisation of our offices have also led to a reduction in the amount of energy used.

Further reductions have been achieved by reducing electricity consumption on project sites through energy audits which have led to the implementation of measures to 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 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 2017 to report emissions from its operations around the world.

However, Balfour Beatty has chosen to report only using the location-based approach and not the market-based approach. Even though Balfour Beatty does procure significant amounts of renewable electricity, the average DEFRA and IEA location-based 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

2017

Electricity

130,597

169,678

142,477

132,437

Heat & Steam

1,476

2,603

4,561

28,796

Natural gas

11,620

18,169

22,085

17,367

Industrial gases

7,014

2,828

6,193

3,866

5% biodiesel blend

376,807

476,488

477,401

367,036

5% petrol blend

32,786

11,933

53,096

70,949

Biodiesel

30

-

410

1,120

E85 petrol

42

5,479

58

99

Gas oil (Red diesel)

227,731

288,143

292,501

212,909

100% mineral diesel

85,944

20,025

16,636

15,381

100% mineral petrol

47,056

44,795

12,939

3,848

LPG

149

185

571

212

CNG

5

1

2

1

Boiler fuel

374

921

1,582

1,146

Total

921,631

1,041,248

1,030,512

855,167

Although Balfour Beatty’s Scope 1 and 2 CO2e emissions dropped by 18.5% (55,260 tonnes) over the period from 2016 to 2017, the number of MWh of energy dropped by 17.0% (175,345 MWh). 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.

The Energy Use table illustrates that there has been a greater switch towards 5% biofuel petrol blend and biodiesel different blend (other than 5%) accompanied by a reduction in both mineral petrol and mineral diesel. There has been a 23% reduction in 5% biodiesel blend use. 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 such as energy provided by landlords or clients that Balfour Beatty does not pay for.

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 2017 to calculate its emissions into equivalent tonnes of carbon dioxide (CO2e) and the IEA’s October 2017 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 only reported on Heery’s Scope 1 and 2 data until the point of sale in October 2017.

KPMG was 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.

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: Balfour Beatty Reporting Guidance.

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 2017, over 2,189,151 tonnes of waste that Balfour Beatty produced was recycled. This equates 92% of the total amount of waste that Balfour Beatty produced in 2017, 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.

Water intensity graph

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. 

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

Our Sustainable Procurement strategy recognises the critical role of our supply chain in helping make Balfour Beatty a more sustainable business. The Group continued to improve its approach to sustainable procurement in 2017 with its UK business becoming the first company in the world to be assessed against ISO 20400:2017, the international standard for sustainable procurement. This was followed by Gammon Construction, the Group’s joint venture in Hong Kong and Singapore, becoming first Asian company to be assessed against the standard for its Hong Kong operations.

For the UK, Balfour Beatty published its sustainable procurement policy and guidance for buyers and suppliers which clarifies its expectations and helps Balfour Beatty address and better understand risks and opportunities in areas such as circular economy, modern slavery and responsible sourcing. The Group received a WWF Timber score of 3 out 3 for its performance on sustainable timber procurement in 2016. This rescored every three years.

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 2,300, an increase of over 15% from 2016.  Balfour Beatty has also incorporated more than 60 e-learning modules and toolbox talks from the school into its own Balfour Beatty Academy and 360 platform making them available to Balfour Beatty employees.

Since 2013 Balfour Beatty has spent over £7.4bn 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. Balfour Beatty is committed to supporting minority owned businesses such as women owned businesses with whom it has spent  more than £248m since 2013.

Its UK operations adhere to the Government’s Fair Payment Guidelines. In 2010 Balfour Beatty 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. Balfour Beatty has also 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.