The construction industry is at a crossroads. As global pressure mounts to address climate change, companies are being called to account for their carbon footprints—not just within their own operations, but across their entire value chains.
For construction companies, this means grappling with Scope 3 emissions, which often account for the majority of their environmental impact.
But where do you start? The answer lies in understanding materiality and identifying the key drivers of Scope 3 emissions.
Materiality is the principle of focusing on what truly matters. In the context of sustainability, it’s about identifying the environmental, social, and governance (ESG) factors that have the most significant impact on your business and stakeholders.
For construction companies, this means pinpointing the activities, processes, and partnerships that contribute most to Scope 3 emissions—those indirect emissions that occur upstream and downstream in your value chain.
Materiality assessments are not just a compliance exercise; they’re a strategic tool. By understanding which emissions sources are most material, construction organisations can prioritise their efforts, allocate resources effectively, and demonstrate meaningful progress to investors, regulators, and customers.
Scope 3 emissions are inherently complex, especially in construction. The industry’s reliance on raw materials, heavy machinery, and extensive supply chains creates a web of interconnected emissions sources.
According to the World Green Building Council, up to 90% of a building’s carbon footprint can come from Scope 3 emissions, making them a critical focus for decarbonisation efforts.
But tackling Scope 3 emissions is about measuring, reporting and understanding the key drivers and addressing them at their source.
Embodied carbon in materials.
The production of construction materials like cement, steel, and glass is a major contributor to Scope 3 emissions. For construction companies, reducing embodied carbon means working closely with suppliers to adopt low-carbon alternatives, such as recycled steel or greener cement formulations.
Transportation and logistics.
The construction industry relies heavily on transportation—whether it’s moving raw materials to a site or delivering finished products to clients. Each truck, ship, or plane involved in the process adds to the carbon footprint. Optimising logistics, using local suppliers, and transitioning to low-emission vehicles can significantly reduce this impact.
Waste generation and management.
Construction and demolition waste account for a substantial portion of landfill volumes globally. The disposal process generates emissions, but so does the production of new materials to replace what’s wasted. Implementing circular economy principles—such as reusing materials and designing for deconstruction—can turn this challenge into an opportunity.
Energy use in construction processes.
While Scope 1 and 2 emissions cover direct energy use, Scope 3 includes the energy consumed by subcontractors and equipment suppliers. Electrifying machinery, adopting renewable energy sources, and improving energy efficiency across the supply chain are essential steps.
Tenant and occupant emissions.
Once a building is completed, its operational phase begins—and so does a new wave of Scope 3 emissions. These include the energy used by tenants and the carbon footprint of maintaining the building. Designing energy-efficient structures and promoting sustainable practices among occupants can mitigate this impact.
Understanding the key drivers of Scope 3 emissions is only the first step. The real challenge lies in taking action. Here’s how construction firms can turn insights into impact:
Collaborate with suppliers: Engage your supply chain early and often. Set clear expectations for emissions reporting and work together to identify reduction opportunities.
Leverage technology: Invest in tools that streamline data collection, analysis, and reporting. Digital platforms can help track emissions across the value chain and identify areas for improvement.
Adopt sustainable design practices: From modular construction to passive design principles, rethinking how buildings are designed and constructed can significantly reduce embodied carbon.
Educate and empower stakeholders: Sustainability is a team effort. Train your workforce, engage tenants, and collaborate with industry peers to drive collective action.The construction industry is at a critical juncture, where sustainability is a competitive advantage. By prioritising materiality—understanding the environmental impact of raw materials, supply chains, and construction processes—companies can identify the key drivers of their emissions and implement targeted reduction strategies.
As the industry evolves, one thing is clear: the companies that embrace this challenge today will be the ones shaping the built environment of tomorrow.
Those who take decisive action now, by investing in sustainable solutions and fostering a culture of environmental responsibility, will lead the way in creating a built environment that is economically viable and environmentally responsible.
The choice is clear—adapt and lead or risk being left behind.