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Sustainability www.thefis.org 11 scope two. These might include emissions from business travel (by means not owned by the organisation, e.g. train), waste disposal or purchased goods. Scope three has further been split into 15 categories which enable organisations to identify clearly which emissions should be concerned. The emissions in scope three are often considered to be themost challenging as they require engagement and information with the supply chain, whichmight not always have started themeasurement of their emissions. Organisations making commitments to net zero therefore need to specify which scope they are covering. Most organisations are focusing on scope one and two reporting only, as they aremore in control of these. It is more important tomap the journey to net zero than to try tomeasure everything in one go as this is not currently possible. Some companies choose to go to the next step of getting their figures audited. Schemes such as the Science BasedTarget Initiative (SBTi) provides a scheme against which organisations can verify that their figures are accurate and third party verified which provides more robustness to assurance that the figures declared are accurate. While, it is not mandated, it is advised for larger organisations whichmight be driven by their shareholders requests to start measuring and reducing. SMEs canmake commitments through the Climate Hub 4 , part of the Race to Zero, where they can also get additional guidance. It is important to note that net zero does not mean that an organisation has zero emission. It means that it has reduced its emissions and then offset the remaining ones. The focus on reduction is particularly important, of course. There are a number of offsetting schemes and it is important to pay careful attention to the real impact of the scheme to ensure it will indeed support an offsetting approach. For example, it could be good to choose a scheme that has an impact locally and which performances can be verified. The UKGBC Net Zero Carbon Building Framework 5 provides guidance on carbon offsetting requirements. More work needs to be done in this field and on 29March, the Integrity Council for the Voluntary Carbon Markets (ICVCM) published a framework to set more rigorous thresholds on disclosure and sustainable development 6 . The Better Building Partnership (BBP) published its climate commitment which has been signed by 37 real estate owners, which collectively own over 11,000 properties and therefore have a significant influence on the market. The commitment acknowledges that the real estate sector needs to change in order to deliver net zero buildings by 2050 by incorporating direct and indirect investments, operational and embodied carbon and Scope one, two and three emissions. Some of BBP’s members and Tier 1 Contractors have gone further and published their ambition for net zero (see Figure 2). Most Tier 1 contractors have committed to some carbon reduction targets and have made good progress in their journey to net zero. Discussions with a number of them have confirmed that scope one and two are easier to measure, but that the large majority of their emissions are from scope three. There is therefore a need to engage their supply chain more actively in this journey. In addition, the “Construction Playbook guidance on sourcing and contracting public work, projects and programmes 7 ” published by the Government in September 2022 has a strong focus on sustainability. It sets out that “In line with PPN 06/21, suppliers bidding for major government contracts must detail their commitment to achieving net zero through the publication of a Carbon Reduction Plan”. It is therefore important that industry becomes aware that setting up a net zero carbon plan (either a Carbon Reduction Plan as mentioned in the Construction Playbook, a science based target plan or simply an in- house plan) is important to win future work as suppliers are more and more likely to be asked to provide one to win work. Source 1. www.carbonbrief.org/in-depth-qa-the-uks- green-day-avalanche-of-climate-and-energ y- announcements 2. www.thefis.org/knowledge-hub/ sustainablility/sustainability-related-to-your- organisation 3. www.ghgprotocol.org/sites/default/files/ standards/Corporate-Value-Chain-Accoun ting- Reporing-Standard_041613_2.pdf 4. www.smeclimatehub.org 5. www.ukgbc.org/resources/net-zero-carbon- buildings-framework 6. www.icvcm.org/integrity-council-launches- global-benchmark-for-high-integrity-carbo n- credits 7. https://assets.publishing.service.gov.uk/ government/uploads/system/uploads/ attachment_data/file/1102386/14.116 _CO_ Construction_Playbook_Web.pdf Real estate owners and Tier 1 Contractors Ambition for net zero Grosvenor “Think Zero – is our pathway to a better future” set out their approach to achieving net zero by 2030 by tackling three areas: - Reducing the energy demand of their existing estate - Reducing the embodied carbon of their development (<500 kgCO2eq/m2 from 2025) and designing buildings that are operationally net zero - Reducing the carbon emission of their supply chain (aiming for 40%of their suppliers to have a science based target by 2030 and to procure energy from renewable sources) and to use electric vehicles by 2025 British Land Committed to achieving a net zero carbon portfolio by 2030. These commitments from large real estate owners will treacle down to their supply chain, which includeTier 1 contractors. Overbury and Morgan Lovell (both fit-out arms of Morgan Sindall) Have a target to be net zero by 2030 (in line with parent companyMorgan Sindall: target to reduce Scope one, two and operational Scope three emissions, so those that are directly and indirectly related to its operations by 30%by 2025 and by 60%by 2030 based on 2019 baseline). Willmott Dixon Targets: - All new build and refurbishment projects delivered from2030will be net zero carbon in operation - Their supply chain partners to be net zero carbon in operation by 2040 ISG Committed to be net zero carbon in operation by 2030 and to take a whole-life view of carbon in the projects they deliver. Figure 2. Real estate owners and Tier 1 Contractors ambition for net zero

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