environmental strategies for construction companies

Introduction

This page concerns environmental strategies for companies which are involved in the construction and renovation of buildings, from domestic housing to large commercial projects.

It therefore includes design-and-build companies, main contractors, sub-contractors and specialists.

Most buildings create enormous carbon footprints, so construction companies should be acutely aware of the situation and take appropriate action.

Whether or not taking action on the environment is worth doing right now will depend primarily upon the moral stance of your staff and management and, perhaps most importantly, the impact on demand for your services.

The usual starting point is for us to create a tailor-made Environmental Strategy Report for your company, to serve as a framework within which you can outline your ambitions, quantify your emissions and assess progress on your various positive actions.

The second part of the process is the attainment of carbon certification, the primary mechanism through which you can broadcast your environmental achievements.

Carbon certification is usually achieved through the purchase of carbon credits (most commonly from tree-planting projects), with the required quantity being determined by the annual calculation of your emissions and the level of certification that you select.

Positive messaging and action around environmental issues is becoming increasingly influential during the contract commissioning process and can be hugely motivational to potential building purchasers.

One particularly interesting aspect which is almost unique to the construction industry is the practise of providing of certification for individual projects., which is understandable give their potential for enormous carbon footprints.

Amortisation of carbon debts

With a building having such a high carbon cost and long life-span, it makes sense to amortise the carbon footprint over many years of use.

The easiest way to make this happen is to include the full value of the carbon offset for a building into its sale price. This enables the you to pass full payment to us immediately, so that we can get on with the business of planting tropical trees fully underway from the outset. The building owner then effectively pays off this debt in instalments, over the course of their mortgage.

To give you some idea of the scale of this issue, a medium-sized detached house would typically represent around 250,000 kgCO2e. The total cost of offsetting this carbon is around USD 17,500, amortised over 25 years leads to an annual payment of USD 700. Depending on the local property prices, that typically represents a 1% to 4% increase in mortgage payments.

Whether or not it is feasible or desirable for you to add carbon surcharges to the cost of a building is not the key issue here. The important thing is that you demonstrate your awareness, bring it to the attention of your customers and provide them with the choice.

For construction companies there are three levels of certification.

Carbon aware certification

The entry level of certification for a construction company is carbon aware.

In this scenario, you do not take responsibility for the carbon footprint generated by your company infrastructure or for the constructions that you produce.

Instead, you simply offer your customers the option to offset the carbon footprint when they buy a construction from you.

It is important to make the point that your carbon aware certification is not affected by the proportion of customers who choose to pay for the carbon offsets. So long as you have introduced them to the concept, that is as far as your obligation goes.

If a customer chooses not to take up the offsetting option, the carbon debt remains unpaid. Becoming carbon aware is therefore not an ideal solution from an environmental perspective, but it is a decent step in the right direction.

A major attractions of this level of certification are that it let’s your customers know that you are taking action on carbon, it typical involves very little direct cost to your company and the offsets can represent a significant source of additional income, as they carry a modest retail margin.

Whether or not it is appropriate or practical for you to offer carbon offsets in this way will depend very much on your brand image, the type of customer that you service and how you fit into the building contract chain.

When it comes to guide prices for the first year, the Environmental Action Report typically works out around GBP 1000 / USD 3600 per million turnover. You may also like us to assist with implementing your Surcharge Process for around GBP 1000 / USD 1200. These costs tend to be around 70% lower in subsequent years.

Carbon neutral certification

The primary aim of Carbon Neutral certification is to offset the emissions that are created by your core operation and infrastructure.

For a construction company that usually means assessing the footprint created by your administration staff, offices, transport and associated extras.

Carbon neutral status does not include taking responsibility for the carbon footprint associated with the buildings that you construct (including raw materials, direct staff, equipment and energy input).

Depending on your brand, products and customer expectations, you may also choose to offer your customers the chance to offset the carbon footprint of the leisure products that they buy from you. This can be done in on the voluntary basis described in the Carbon Aware section above or on the more onerous way described in the Carbon Free section below. But this is not an obligation under Carbon Neutral certification.

When it comes to guide prices for the first year, the Environmental Action Report typically works out around GBP 1000 / USD 3600 per million turnover. If you choose to go Carbon Neutral, that usually falls in the range GBP 275-800 / USD 330-960 per employee, depending on your level of emissions. These costs tend to be around 70% lower in subsequent years.

Carbon free certification

Carbon Free is the highest level of certification.

It is usually associated with companies which have environmental values deeply embedded in their brand strategy and whose customers who are highly responsive to positive environmental messaging.

For the right type of construction company, carbon free status can be a very powerful motivating factor for customers, delivering commercial advantages which far outweigh the relatively modest costs.

Carbon free certification is achieved when a construction company takes full responsibility for the carbon footprint created by both its core operation and the buildings that it produces.

In this sector, carbon free status is relatively rare.

The only practicable method is to add a compulsory carbon surcharge to the value of the construction at the point of sale. The purchaser can then raise their capital and pay the full asking price, from which you pass the requisite amount through to us, so that we can plant the appropriate number of tropical trees.

For a larger project, where we will effectively be planting a whole forest, we can provide you with additional information to support your proposal, visit the customer to explain the projects to them or even invite them out to Africa to visit one of our sites, perhaps in combination with a short safari.

When it comes to guide prices for the first year, the Environmental Action Report typically works out around GBP 1000 / USD 3600 per million turnover. You may also like us to assist with implementing your Surcharge Process for around GBP 1000 / USD 1200. The cost of purchasing carbon credits can vary enormously (depending on your company description and the level of take-up from your customers), but typically falls in the range 0.0-0.6% of turnover. These costs tend to be around 70% lower in subsequent years.

Next section

Services and costs

In this article we describe the services that we offer and the process through which we would guide you, on the way to fulfilling your environmental ambitions.