What is Net Zero?

The government has committed the UK to a ‘net zero’ emissions target by 2050, but what does this mean?

In simple terms, net zero refers a balance between the production and removal of greenhouse gases (GHGs) in the atmosphere. Think about it like a bath – turn on the taps and you add more water, pull out the plug and water flows out. – National Grid

While CO2 is naturally released, human activities, particularly the burning of fossil fuels, have increased atmospheric CO2 concentration.

It must be remembered that greenhouse gases encompass more than just carbon dioxide (CO2), it includes all carbon equivalents. For example, methane, which through human activities such as cattle farming and landfill waste dumps, has contributed extensively, or nitrous oxide, produced through human activities like fertiliser use, fossil-fuel combustion, and biomass burning.

In practice Net Zero means that in the years leading up to 2050, businesses and companies across every part of the economy need to take steps to get as close to zero emissions as possible. Therefore, Net Zero is not just an environmental goal, it's a transformative economic movement requiring re-evaluation of processes, a redesign of infrastructure, and a shift in investment behaviours across industries.

Why is Net Zero appearing more in Contacts?

The prevalence of Net Zero in contracts is on the rise. Notably, in 2021 alone, Net Zero contracts awarded by the public sector surpassed £559 million, highlighting a significant increase compared to the £90 million figure recorded in 2015 – Tussell

The increasing prevalence of Net Zero requirements in construction contracts is a response to a variety of factors driving the global construction industry toward sustainability. Clients, both public and private, are increasingly prioritising sustainable practices in construction projects, influencing the evolution of contract expectations.

Environmental regulations coupled with an increased corporate emphasis on social responsibility, have driven the integration of Net Zero commitments. The recognition of climate-related risks and the desire for long-term project resilience further contribute to the incorporation of Net Zero principles into contracts.

Carbon reduction planning

A Carbon Reduction Plan validates your business’s commitment to achieving Net Zero by 2050.

To initiate the planning process, it's crucial to assess your current position. Therefore, making a carbon inventory plan to understand your baselines is essential for achieving net zero.

You can read more about carbon inventory planning for establishing baselines in our blog here.

With a clearer picture established, you’ll be able to identify what is realistic, scrutinise planned goals and finalise commitments for net zero that are achievable.

Looking at the Science Based Targets Initiative (SBTI), Streamlined Energy and Carbon Reporting (SECR), and guidelines such as PPN 06/21 may also be beneficial to ensure you drive a science-based approach to carbon reduction, follow a standard framework and align with public procurement requirements.

Data reporting – activity or cost-based?

There are two main ways to track carbon, activity and cost based. Cost-based emission factors estimate an organisation's greenhouse gas (GHG) emissions based on the monetary value of the goods and services it purchases. These factors are calculated by multiplying the organisation's spending by the emissions intensity associated with the goods or services acquired.

Activity-based emission factors are a method used to measure the amount of greenhouse gas (GHG) emissions associated with a specific activity or process. This could include activities like driving a vehicle, using electricity in a facility, or other industrial processes.

These factors are calculated based on data specific to the particular activity. For example, when measuring emissions from a vehicle, the calculation would take into account factors such as the fuel efficiency of the vehicle.

The advantage activity-based emission factors are known for is their precision and accuracy. They provide a detailed and specific approach to measuring emissions, offering a more accurate representation of the environmental impact of a particular activity.

Where does data live in your organisation?

As the Greenhouse Gas Protocol itself puts it: “Developing a full emissions inventory – incorporating Scope 1, Scope 2 and Scope 3 emissions – enables companies to understand their full value chain emissions and focus their efforts on the greatest reduction opportunities”.

Emissions data can be found in various areas, and capturing this information involves a combination of data collection methods. Here are some common examples for the three scopes:

1. Direct Emissions (Scope 1):

Fuel Consumption: Monitor and record fuel consumption for company vehicles, machinery, and facilities. This information is typically available through fuel receipts or fleet management systems.

Employee commuting and business travel can fall under Scope 1 if the organisation owns or controls the vehicles used for commuting or business travel (e.g., company-owned cars).

2. Indirect Emissions (Scope 2):

Energy Consumption: Track energy usage from purchased electricity, heating, and cooling. Utility bills and energy meters provide valuable data for assessing energy-related emissions.

3. Supply Chain Emissions (Scope 3):

Supplier Collaboration: Engage with suppliers to obtain data on the carbon footprint of materials and services provided. Request information on the production processes, transportation, and other relevant factors.

Employee Commuting and Business Travel: If the organisation does not own or control the vehicles used for commuting or business travel, these emissions may fall under Scope 3. This is often the case when employees use personal vehicles or public transportation for work-related travel.

You will find that a lot of the data you are already collecting through financial systems, HR systems or notes and invoices. Once the data is collected it is just a matter of organising and running it through conversion factors.

How to calculate emissions with technology

All the different emissions data that needs to be collected may be overwhelming, but technology can make the process easier. At sustain IQ we provide customers with a central integrated reporting dashboard allowing you to pull data from multiple sites and locations across your business and transforms the data into information.

If you need technology to help with data capture, get in touch with us at [email protected]

Reporting back to the client

Reporting emissions data back to clients is a critical step in demonstrating transparency, accountability, and commitment to sustainability. When communicating back, ensuring that data is presented in a clear and concise format that is easy to understand. For example, using graphs, charts, and visualisations to convey complex information in a more accessible manner.

Providing context to the data by comparing to KPI’s for the project, previous periods and industry benchmarks will also help clients understand the significance of the data and the progress made over time.

Being able to communicate this back to clients is a strategic move and will increase the likelihood of winning future contacts.