As the construction industry strives toward sustainability, addressing Scope 3 emissions has become as one of its most complex and pressing challenges. While Scope 1 and 2 emissions—directly controlled, or related to energy consumption—are relatively straightforward to measure and manage, Scope 3 emissions delve into the broader supply chain.
They encompass everything from the production of raw materials to the disposal of waste, making them a critical but often overlooked element in achieving meaningful carbon reduction.
Here’s a closer look at why Scope 3 emissions pose such unique challenges for the construction sector—and what companies can do to tackle them effectively.
The construction industry is defined by its intricate supply chains, involving numerous stakeholders, materials, and processes. Every project relies on raw materials such as cement, steel, and timber, each carries a significant carbon footprint. Tracking the emissions associated with their production, transportation, and assembly requires visibility that many companies struggle to achieve.
"Supply chains in construction are inherently complex, with emissions embedded at every stage," explains Nick Ross, sustainability consultant at BraveGen. "Engaging suppliers to collect accurate data is a monumental task, especially when many of them may not have carbon accounting systems in place."
Unlike Scope 1 and 2 emissions, which are based on direct measurement or energy usage, Scope 3 emissions often rely on estimates, assumptions, and third-party data. This lack of standardisation complicates efforts to achieve accuracy and transparency.
In construction, where projects and subcontractors vary widely in scope and scale, collecting consistent data is especially challenging. Material suppliers may use different methodologies or fail to disclose critical information, leaving construction firms to fill in the gaps.
"Documentation and assumptions play a big role," says Nick. "Companies that don’t document their decisions risk scrambling for answers when auditors or stakeholders ask questions later."
The key here is to capture the level of accuracy and take steps to improve this in time. With the Australian Sustainability Reporting Standard (ASRS) and other reporting frameworks requiring more and more construction companies to report, subcontractors around Australia will come to expect some level of emissions data being requested from them.
Embodied carbon—the emissions associated with the production, transportation, and disposal of construction materials—accounts for a significant portion of Scope 3 emissions in the sector. Cement and steel alone are responsible for approximately 10% of global greenhouse gas emissions.
Reducing embodied carbon requires innovative approaches, such as adopting low-carbon alternatives, reusing materials, or improving the efficiency of construction processes. However, these solutions often come at a higher upfront cost, which can deter adoption in a cost-sensitive industry.
For many construction firms, Scope 3 emissions are an unfamiliar territory. Unlike energy use, which has clear metrics and established management practices, the broader concept of value chain emissions requires new skills and knowledge.
"Many companies are only beginning to realise the importance of Scope 3," Nick notes. "There’s a steep learning curve, and without the right expertise, it’s easy to feel overwhelmed."
With increasing regulations and investor expectations, construction companies face growing pressure to address their Scope 3 emissions. Frameworks such as the Task Force on Climate-related Financial Disclosures (TCFD) and the ASRS are raising the bar for accountability.
The risk for firms that fail to act are significant: reputational damage, lost business opportunities, and even regulatory fines. Yet many struggle to keep pace with these demands while balancing day-to-day operations.
Despite the challenges, addressing Scope 3 emissions is crucial for the construction industry’s decarbonisation journey. Here are some practical steps companies can take:
As Nick says, "It's an opportunity for the construction industry to lead by example, drive innovation and create long-term value for businesses and the planet."
Ready to simplify your carbon reporting journey? Let BraveGen guide your team through the complexities of Scope 3 emissions. Reach out to learn how we can help you stay ahead of the curve.