Where Do You "Account" for Your Net Zero Carbon Building?

Hero Bennett

Sustainability Leader

Max Fordham LLP

For many organisations pursuit of a net zero carbon building may be as a result of a corporate sustainability strategy and so it is important to understand where their buildings’ emissions sit within the measurement of their climate impact and their wider accounting of carbon emissions.

The Green House Gas Protocol

It is acknowledged that in order to demonstrate and work towards Net Zero, organisations need to be able to account accurately for all their carbon emissions, not just those from the construction and use of their buildings. The most widely-used carbon accounting tool is the Greenhouse Gas Protocol, which categorises Greenhouse Gas Emissions into three groups or ‘Scopes’ as illustrated below.

(c) World Resources Institute (WRI)

Scope 1 emissions (‘direct emissions’) are those released directly from buildings or assets owned and controlled by an organisation. This includes emissions from gas, oil, coal or other fuels burnt in boilers; emissions from company-owned vehicles; emissions from any incinerators owned and operated by the organisation and any air-conditioning refrigeration leaks.

Scope 2 (‘energy indirect’) emissions related to heat, steam and electricity purchased by an organisation for use in buildings or assets that it owns and controls.

Scope 3 (‘other indirect emissions') emissions result from an organisation’s activities through their “corporate value chain” but over which they have no ownership or control. However, these emissions can often make up the greatest share of their climate footprint, covering emissions associated with business travel, procurement, waste and water. Scope 3 emissions frequently go under-reported.

Where Do You Account for Your Building or Work Space?

The buildings that an organisation operates can contribute to a significant portion of their climate footprint. If these buildings or parts of the building are under the operational control of the organisation, the energy consumption and the equivalent greenhouse gas emissions typically fall under scope 1 and scope 2. However, in circumstances where an organisation leases space within a building but does not have control over its operation, the energy consumption and resulting emissions may be better accounted for under an organisation’s Scope 3 emissions.

Setting the Operational Boundary for Carbon Accounting

An organisation’s “operational boundary”, that is the declared boundary of their carbon audit, sets apart emissions that can be influenced by the reporting company, from ones that cannot. For most organisations, their carbon audit will encompass some, but not all the scope 3 emissions categories outlined in the Greenhouse Gas Protocol Corporate Value Chain Standard, as well as their scope 1 & 2 emissions. The decision of where to draw this “operational boundary” currently lies with the reporting company itself. The “operational boundary” needs to be clearly defined when reporting annual performance and should remain constant from year to year where appropriate to allow for meaningful comparison.

In the case of developers or builders of new buildings, the “embodied carbon” or the carbon emissions arising from the construction of new buildings should be placed within their organisations’ scope 3 emissions. For developers or builders, the operational carbon emissions of those who buy or lease the building would sit within their downstream scope 3 emissions. Including these scope 3 emissions within their accounting operational boundary would help developers and builders identify the wider climate impact of their business and ultimately to plan and set out improvements against this.

Scope 3 emissions can be the hardest emissions to measure or monitor and many organisations are daunted by the prospect of trying to account for them. However, many organisations already collect data ranging from travel expense claims, water bills and commuting surveys, to purchasing records or occupant energy consumption data. These can be monitored and converted into carbon emissions using published conversion factors.

The Benefits of Carbon Accounting

For any organisation, whether mandatory due to size or voluntary due to aspiration, carbon accounting can offer many rewarding opportunities:

  • Understanding their own Climate Impact
  • Catalysing energy efficiency and cost reduction opportunities
  • Reducing emissions from their operations, value chain, and beyond
  • Raising awareness of energy efficiency with clients and collaborators
  • Driving demand for low-carbon products or services
  • Developing a sustainable competitive advantage

In the built environment sector, organisations’ biggest climate impacts arise through the construction and use of the buildings developed, sold, leased and operated. A wider adoption of RICS Whole Life Carbon Assessment to measure upstream construction impacts and whole life carbon emissions of downstream operational carbon emissions would allow organisations involved in the built environment sector to account for these impacts. Understanding and reporting these climate impacts will allow organisations to plan how best to reduce their emissions and ultimately will help ensure that demand for buildings with low construction and operational carbon emissions continues to increase.

How to Start Accounting for Your Carbon Emissions

  1. Set your reporting period
    Initiatives like the SBTi generally use calendar years, but another period may make more sense for you, for example, a school year or a tax year.
  2. Find your gas & electricity bills
    In most cases, the majority of your scope 1 and 2 emissions will be covered by your gas and electricity bills. Getting ahold of bills straight from your supplier is the best way to get an accurate measure. Other potentially notable scope 1 emissions could come from sources such as refrigerant leakage, or emissions from any owned vehicles. You can use the annually updated UK government conversion factors to convert from various units to kgCO2e.
  3. Set your operational boundary (choose your scope 3 categories)
    It is unlikely that all of the 15 scope 3 emissions categories outlined in the GHG Corporate Value Chain standard will be relevant to your company. Before attempting to find data for every single category, first decide which categories are relevant.
  4. Use what data you already have
    Employee commute surveys, business expenses and waste consultant reports are all perfect data for measuring scope 3 emissions. As with the scope 1 and 2 emissions, the relevant conversion factors for all types of data can be found in the UK government conversion factor spreadsheet.
  5. Accept that no scope 3 emissions assessment will be perfect
    No matter how much effort goes into a scope 3 emissions assessment, it will be impossible to fully measure the indirect impacts of a company’s operations. Measuring what emissions, you can is ultimately to help you enable opportunities for reduction, don’t forget that is the objective!

This video is courtesy of the UK Green Buildings Council (UKGBC)