The Race to Net Zero

‘Net Zero Carbon’ is the latest catchphrase across the corporate sector right now. You probably have heard many interpretations of this phrase, and all vary in definition:  climate positive, zero carbon, science-based targets. It’s easy to become overwhelmed by all the information out there so getting to grips on the topic and how it relates to FM is a real opportunity in this current climate.

However, before we get into the detail, where did this sudden demand come from?

Drivers 

The Net Zero concept is by no means a topic that emerged from a standing start. Managing carbon emissions has been a steadily growing trend for the past 10 years.  This slow growth, culminating in the current boom, can be viewed as predominantly a consequence of stakeholder pressures demanding action.   The drivers we see are growing:

1. Managing assets against physical climate risks – prolonged Californian wildfires raging, Australian heat waves, intense European floods / droughts in fast succession are causing disruption and damage.
2. Investors applying downward pressure on their investments to measure and manage their response to climate change risks and opportunities.
3. Large businesses are applying downward pressure on their suppliers to measure and manage their response to climate change risks and opportunities.
4. Government response – On the 27^th June 2019, the UK became the first major economy in the world to pass laws to end our contribution to climate change. The legislation committed the nations of the UK to reduce all greenhouse gas emissions to net zero by 2050.
5. Delivering solutions to align with climate change mitigation and energy efficiency is a significant business opportunity.
6. Company reputation. In a competitive job market, sustainable core values are quickly being taken on for businesses. Living up to these values is fundamental to attracting staff.

These drivers are pushing companies to set Net Zero carbon targets and use them as key marketing tools.

What is Zero Carbon

In essence, Net Zero means that a company is eradicating its emissions through actual reductions by investing in new efficiency technologies and engaging with staff to change their energy usage patterns. This results in a reduction of CO2 emissions, while any remaining emissions would be offset by investing in schemes to remove an equivalent amount of greenhouse gases in another part of the world that is outside of the company boundary. As a very simple example, planting trees removes CO2 from the atmosphere. Therefore, a company can offset its total emissions by funding aa project that plants new trees.

In practice however, it comes down to the corporate responsibility of the company as to how far a business goes to reduce its emissions before offsetting. The current buzz over Net Zero can easily result in many companies taking the ‘easy’ option and offsetting their way to achieve Net Zero status without investing in actual emissions reductions. Or in some instances ‘Net Positive’, which is when a company offsets more than it needs to become Net Zero.

So, what is the problem?  

The problem comes when too many companies opt for the easy way out and simply offset without ensuring real reductions. This is a huge problem because while offsetting is a noble initiative (in many cases), in other cases the verification that projects actually remove carbon from the atmosphere is a difficult one. Let’s take the tree planting example. Planting trees does not result in an instant removal of carbon from the atmosphere. It starts with planting the tree, managing the land, allowing the tree to mature and maintaining the tree which then gives the desired effect of removing carbon from the atmosphere. During the tree’s maturity lifetime there are a whole host of issues that can occur – it can become diseased, be eaten by an herbivore, or the land can be sold, and the tree can be burnt for fuel and therefore release the carbon it had stored. Therefore, whether maligned or not, companies must be reducing their overall emissions and using offsetting as a last resort to achieve Net Zero.

What does good Net Zero look like?  

Being part of the Sustainable Facilities Management Index, we have come across lots of examples of Net Zero targets.  If you are setting targets, the SFMI recommend the approach below to ensure that these good intentions don’t fall into the same pitfalls that some businesses have by hastily releasing targets without consideration of the background work that goes into it:

1. Capture your direct carbon emissions baseline. This includes your direct and indirect emissions from owned operations of the business – electricity, gas, fuels, heat and steam. This is your scope 1 & 2 carbon baseline.
2. Capture your scope 3 emissions. These are your indirect emissions that are created by your business, for example, procuring products and services has a carbon footprint, paying transport companies to deliver goods and services emits carbon, employees getting to work, and even working from home, all come with a carbon value. It is likely the measurement will need to be estimated, so it won’t be perfect, but it’s a start. However, you will need to build up a complete picture of emissions if you want to state that you are Net Zero, and for the FM provider key areas include goods and services purchased, along with emissions that exist with customer sites. Even capturing the emissions in the FM services will show forward thinking and leadership.
3. Now set your target ambition – consult with the company on timescales, aggressiveness, why you want to set a target, who is it aimed at, who is responsible, who is sponsoring the programme. This will align your business and enable you to build your roadmap. Remember that climate change is a ticking clock, so achieving it by 2050 is vital.
4. Build a roadmap – create segments of emissions that will be reduced during periods of time. Start with those under your control first, then expand out. Start with immediate actions over the next 5 years that are aligned to your business ambitions. Beyond that, things can start to become hazy, but you can identify segments that you will approach.
5. Build interim targets. Factor in electricity decarbonisation, vehicle decarbonisation, heating decarbonisation within buildings. For goods and services consider lower carbon replacement products and supplier zero carbon pathways. The interim targets show thought and planning.
6. Determine the role of offsetting, and if you choose to use them, research them thoroughly and choose quality credible offsets, not the cheapest on the market.
7. Commit to your target and be 100% transparent about it. If you have excluded emissions sources, then disclose this and explain why. Displaying annual progression is an important part of committing to the set targets.  The aim isn’t to just set a target, it’s to be proactive and display accountability throughout the company effort of achieving it.

Spotting a poor target: 

From the SFMI’s experience, some key target setting traits that showcase a lack of effort, especially from large companies with significant emissions, include the following:

1. Net Zero target incorporates scope 1 & 2 emissions only. No mention of scope 3 emissions.
2. There are no long-term targets for absolute reductions.
3. The only target is for 2022 Net Zero and will be completely based on carbon projects.
4. Disclosed information will lack detail about initiatives to reduce actual emissions, or information will consist only of token gestures such as the company will purchase electric vehicles by 2030. (It’s important to flag here that this date is when the UK Government makes it illegal to sell new combustion vehicles).  Or the company will purchase renewable energy from their energy provider.

Leadership in the FM sector is vital in the race for Net Zero. The SFMI believes that the FM has a key role to play in the journey to Net Zero. As a service provider that is operating buildings, engaging with staff, and procuring goods for its customers FM can add significant value to its function by being a solution provider on the road to Net Zero. By taking responsibility for emissions beyond its operational boundary and incorporating customer emissions, the FM will bring solutions to the table to reduce emissions for clients and tap into the values of the customers which will bring even more importance to the role of FM.

SFMI audits start in September – The FM sector under the spotlight 

We are looking forward to the Autumn when the SFMI will be assessing zero carbon targets from SFMI members. We are excited to see what targets the leading sustainable FM providers have set for themselves, the research they’ve conducted into their emissions and the roadmaps they have set. Our report in December will give great insight into the state of the FM industry in relation to zero carbon. Watch this space.

How does Net Zero impact the role of the FM? 

The role of the FM in achieving Net Zero can range across a number of tasks:

• Carrying out procedures to ensure alignment with Net Zero
• Embedding the behaviours needed to achieve Net Zero reductions within the operations of a business
• Ensuring building controls are efficient in reducing waste
• Adhering to supplier protocols that incorporate Net Zero targets

This embedded approach in the day-to-day role of the FM provider gives greater sustainable value and comes as part of an improved value offer of the FM provider. Then at the other end of the scale there are specific enhanced solutions and technologies that are offered, such as building modelling, renewable energy projects, zero carbon-based building refurb projects etc. However, it is important to get the basics right to start with, because embedding the concept of Net Zero is key to delivering it.

Basic ways that Net Zero can align with the role of FM

1. Risk – Understanding how climate issue relates to the facility, then identifying/managing the changing risks to the facility related to climate change.
2. Energy – Identifying energy sources, collecting pattern usages, running the building efficiently and identifying new technologies to improve usage. Understanding the behaviour of occupants can lead to zero cost initiatives that save energy and water which leads to carbon savings.
3. Water – identifying water related risk such as flooding, monitoring consumption from meters and billing, and identifying opportunities to reduceWaste and the circular economy – Building the procedures and ensuring that they are followed by the company on site relating to managing how the waste hierarchy applies in the facility. What products are procured with increased waste (and therefore emissions).
4. Transportation – Being a mobile response workforce, transportation is often the largest impact of the FM provider. Prior to vehicle replacement, the FM should understand driving efficiency methods, and the approach to work that is taken. The FM provider should consider the investment in decarbonising the fleet and by when.
5. The goods and services that are procured by the FM will impact the carbon emissions of the business. As a procurer of goods and services, understanding and aligning to protocols that will bring carbon savings will bring added value benefits.