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Navigating CO2 Reporting

Navigating CO2 Reporting

CO2 reporting won’t just be a legal obligation; it will be a competitive advantage.

The construction industry is one of the largest contributors to global carbon emissions. Buildings and construction account for nearly 40% of the nation’s total CO2 emissions. As the climate crisis intensifies, the pressure is on for every sector to take responsibility, and construction companies are no exception. Increasingly, there’s a need for businesses to report their CO2 emissions, but for many construction companies, this can be a challenging task.

The Growing Importance of CO2 Reporting

Compliance with Regulations

The UK government has set legally binding targets to achieve net-zero emissions by 2050. To meet these goals, it has introduced regulations that compel industries, including construction, to report their carbon footprint. Large construction companies are already required to report emissions under schemes like the Streamlined Energy and Carbon Reporting (SECR) and the Energy Savings Opportunity Scheme (ESOS). However, as climate policies tighten, these obligations are expected to expand to smaller firms, too.

Client and Market Demand

Both private and public sectors are increasingly focused on sustainability. Many clients, especially in the public sector, now require contractors to disclose their carbon data as part of their bids for projects. In the UK, frameworks like BREEAM and the new Building Regulations, Part L, require carbon footprint assessments during construction. Clients are prioritizing construction partners who are transparent about their environmental impact, giving an edge to companies that already have robust CO2 reporting mechanisms.

Reporting emissions can also act as a differentiator. Firms that demonstrate commitment to reducing their carbon footprint can position themselves as sustainable leaders, attracting eco-conscious clients and investors. Conversely, companies that fail to report could lose out on opportunities.

Environmental Responsibility and Reputation

Beyond regulations and market demands, there’s a broader moral responsibility for construction companies to reduce their environmental impact. The climate crisis is an existential threat, and as a major contributor to emissions, the construction industry has a duty to minimize its carbon footprint. Reporting CO2 emissions is a vital first step towards reducing them.

The Struggles of CO2 Reporting in the Construction Industry

While the need for CO2 reporting is clear, many construction companies—especially smaller ones—face significant challenges in getting started.

Complexity and Lack of Expertise

Measuring and reporting CO2 emissions is a technical and complex task. For construction companies, the emissions come from a wide range of sources, including machinery, vehicles, building materials, energy use on-site, and even employee commuting. Collecting and aggregating all this data can be overwhelming, particularly for firms without in-house environmental expertise.

Smaller companies, in particular, may lack the resources or the knowledge to create a reliable reporting framework. They often struggle to understand which data they need to collect and how to calculate their total emissions accurately.

Data Collection Issues

One of the biggest challenges construction companies face is gathering the necessary data to report emissions. Construction projects are often spread across multiple sites, and each site may have its own subcontractors, suppliers, and teams. This decentralization makes it difficult to gather consistent and comprehensive emissions data.

For instance, tracking the carbon footprint of materials requires input from suppliers and manufacturers. If a company does not have strong supply chain visibility, it may struggle to obtain accurate data on the embodied carbon in materials like concrete or steel. Similarly, tracking the emissions from subcontractors’ vehicles or machinery adds further complexity.

Costs and Time Constraints

For many companies, especially smaller firms, the costs associated with CO2 reporting can be prohibitive. Accurate reporting often requires investment in monitoring technology, carbon accounting software, or even the hiring of environmental consultants. For businesses operating on tight margins, these additional costs can seem like an unnecessary burden.

Moreover, time is another factor. Construction firms are typically focused on meeting tight project deadlines, and reporting CO2 emissions may be seen as an extra task that diverts resources away from core business activities. As a result, many companies delay reporting or fail to implement it altogether.

Evolving Standards and Regulations

The landscape of CO2 reporting is constantly evolving, with new standards, methods, and technologies emerging all the time. Keeping up with these changes can be a struggle for construction companies, particularly smaller businesses that do not have dedicated sustainability teams. Without clear, consistent guidance, companies may find themselves confused about what data to report, how to calculate it, and how often to update their reports.

Overcoming the Barriers

To overcome these challenges, construction companies can start by seeking out digital solutions that simplify the data collection and reporting process. For instance, cloud-based project management tools can help businesses track energy usage, fuel consumption, and materials data across multiple sites. Additionally, the government offers resources and incentives to help smaller companies meet their reporting obligations.

Collaboration within the supply chain is also crucial. By working closely with suppliers, contractors, and clients, construction companies can build more transparent reporting frameworks and share best practices for carbon reduction.

The right tool for CO2 reporting

As we move towards a low-carbon future, reporting on CO2 emissions won’t just be a legal obligation; it will be a competitive advantage. Recognising the need for a tool that provides such an advantage, we at Next One Technology have developed a new climate reporting module, which makes it easy for project managers to monitor and report their climate impact.

See Next’s CO2 module in action

Book a discovery call to explore your business needs, as well as book a date and time for a demo tailored to your specific needs.