Our industry is engaged in an important dialogue to improve sustainability through ESG transparency and industry collaboration. This article is a contribution to this larger conversation and does not necessarily reflect GRESB’s position. Please refer to official GRESB documents for assessment related guidance.
“The only thing that will redeem mankind is cooperation.” Bertrand Russell.
In the battle against the climate crisis, the term ‘net zero carbon’ (NZC) is ubiquitous. Following many years of increasing carbon policy, voluntary action and international cooperation – as well as public interest spurred on by high profile activism – everyone talking about NZC feels like a solution. Certainly, seeing NZC used as a common term and goal is a useful step forward, suggesting efforts to address the climate crisis are becoming more coordinated and transparent.
Put simply, NZC generally means manmade carbon emissions from a product (e.g. an asset), organisation or nation are zero or, if not, have been offset somehow (the ‘net’ in net zero carbon). However, as anyone who has investigated NZC for their organisation or customers will know, there is no universal detailed definition or joined-up system in place. As a result, many different organisations including industry and professional bodies, institutions and individual companies have spent the past few years carefully defining NZC themselves, often for their specific circumstances.
For the construction sector, this has meant a wide range of NZC initiatives have emerged, each with their own definition and approach to NZC. These separate initiates vary considerably, particularly in terms of:
- Scope (e.g. not all include embodied carbon, and few make it mandatory)
- The timeline to NZC (e.g. some take a straightforward line that the building/project is either NZC now or not, while others promote a pathway to NZC by a future date, usually 2050)
- The carbon measurement methodology that should be used (some provide very little information on this while others define a method themselves or refer to an external methodology or standard)
- Decarbonisation approaches (some generally accept carbon offsetting while others only accept it ‘as a last resort’. Likewise, some accept renewable energy bought from utility suppliers or generators while others only accept on-site renewable energy)
- Certification requirements and transparency (some have no requirements on this, while others require 3rd party certification, with varying levels of detail provided)
As individuals we tend to appreciate a marketplace of choice because personal situations and tastes vary. However, in the context of the climate crisis, success is dependent on everyone contributing fairly towards a common goal. So, a marketplace of apparently competing and contradictory NZC initiatives for organisations to choose between is likely to be confusing and counterproductive. Faced with so many options to research and weigh-up, many organisations will find it difficult to know which initiative to work with. Once committed, it is hard to know if other organisations using a different initiative are taking as much action as you are, leading to accusations of ‘greenwash’. The risk of investing in significant resources to fulfil the requirements of an initiative, only to find out later that it was the wrong choice, can lead to inaction. The cycle of newly promoted initiatives appearing and then seemingly disappearing or being eclipsed by the ‘next big thing’ does not support long term coordinated and deep action being taken.
The climate crisis is the ultimate global existential problem, leading to a wide spectrum of devastating environmental, social and economic impacts. To tackle it effectively, a coordinated top-down approach is needed. The Paris Agreement, although unenforceable, already forms the starting point for many countries. Each country pledges a national emission pathway, coordinated by ‘global stocktakes’ that compare all current pledges and progress made with the overall global carbon reductions required. (Current performance can be viewed here https://climateactiontracker.org/.)
Based on their national pledges, some countries allocate emissions targets to industrial sectors, known as a ‘carbon budget’. For a country to stay within its pledged pathway, the sectors that make up the economy need to know what their allocation of the carbon budget is and achieve it. It is not practical for all sectors to have the same reduction target because reduction opportunities for sectors vary and some sectors are dependent on other sectors (e.g. through scope 3 supply chain emissions). Likewise, it is physically impossible for some sectors to achieve zero emissions (meaning they must be discontinued or offset by another sector that removes carbon dioxide from the atmosphere). This variability and interdependency of sectors in the economy means, without government leading on top-down management of carbon emissions, it is very difficult to say if individual sector reductions are enough.
Taking the UK as an example, a ‘carbon budget’ approach has been in place for several years and is largely used to inform carbon reduction policy. However, the UK carbon budget allocation process does not formerly continue down from the sector level to subsector or to individual organisations. Target setting and performance monitoring at these levels is disconnected from the top-down approach. For the construction and real estate sector, voluntary organisation and asset level targets tend to be based on what is considered to be challenging and achievable, or an ambitious aim for zero emissions (even when unlikely to be achieved). Unfortunately, this means the problem described above arises – it is very difficult to know if an isolated target set for a specific organisation or asset, or their current performance, amounts to a fair share of the required national emissions reduction.
The status quo approach of organisations voluntary using one of a wide range of different NZC initiatives compounds the problem. Aside from not knowing how you fit into the bigger picture, it is unclear if other organisations, often competitors, are taking the same level of action or not. This may discourage deeper action, where additional cost is required that would affect competitiveness.
Moreover, with each sector creating separate uncoordinated initiatives, it is very difficult to assign cross-sector responsibility for emissions reduction. Construction and real estate emission sources, including operational electricity and embodied carbon, largely occur upstream in the supply chain. While our sector has clear responsibility for choosing lower impact products and services and reducing the quantity consumed, it has limited control and responsibility over the choices available and carbon intensity of these upstream sources (e.g. kg CO2 per kWh or per brick). Only a coordinated top-down approach can resolve this.
So, where do we go from here?
This is not intended to criticise meaningful action being taken by organisations or encourage the abandonment of NZC initiatives. Any approach that supports buildings and projects in understanding more about their carbon emissions and how to reduce them is going to make a positive difference. Organisations that use these initiatives are largely doing so voluntarily when many others aren’t, and they should be commended. For the time being, organisations are right to continue to select the NZC initiative that is most suitable for their activity and is most like to result in reduced emissions.
At the same time however, organisations should begin lobbying their sector representatives to call for a nationally coordinated, top-down and mandatory carbon budget allocation system, along with economic incentives and support for innovation to reduce emissions to zero.
However, in case policymakers fail to deliver such a system, organisations should simultaneously push for a voluntary consensus on NZC. Pressure should be applied to existing NZC initiatives in each sector to come together, embrace their common interest in tackling the climate crisis, pool resources and develop and promote a single NZC initiative. Once underway, the sector should approach interdependent sectors to coordinate, maximise information sharing and agree inter-sector boundaries of responsibility (i.e. who is responsible for what carbon emissions). Furthermore, with a single net zero carbon initiative in place, professional and trade bodies can begin to demand all their members take appropriate action by introducing it as part of their constitution – to ensure all play their part.
This article was written by BRE