Construction firms headed by BAM, Skanska and Carillion have ranked highly in a list of the UK’s most energy efficient companies, but the figures are misleading and flatter their performance, the companies themselves have admitted.
The government-funded Performance League Table (PLT) ranks the relative performance of companies obliged to reduce their carbon emissions under the CRC Energy Efficiency Scheme, which covers some of the UK’s largest firms with energy bills of more than £500,000.
BAM Group achieved the top score in the 2011/12 PLT, climbing 229 places since 2010/11 and beating more than 2,000 organisations, while Skanska was placed second, Carillion seventh and Costain twelfth.
But there are said to be two flaws in the calculations. First, the scheme’s failure to take into account the transient nature of construction work means the figures are not representative of actual carbon performance, said David Symons, director at environmental and engineering consultancy WSP.
“Under the CRC rules, if you have an activity that starts or finishes during the year then you are not required to include it, which clearly benefits construction firms whose sites are transient,” said Symons. “So saying that BAM has reduced its carbon emissions by 65% in the year is fanciful to say the least and, in part, reflects the fact that as its sites closed the amount carbon it had to measure was cut. It shows the vaguery of how the CRC league table is calculated.”
And speaking to website BusinessGreen, Jesse Putzel, BAM’s climate change manager, also warned the reporting rules of the CRC did not accurately reflect the efforts taken by companies to cut their emissions.
“We’re doing really good things to cut our emissions, so we’re happy to have some recognition for that,” he said. “But the figures are misleading because there is no organisation that could cut its emissions by 65% in one year unless they drastically changed their business – i.e. got rid of most of it.”
Putzel claimed that the main cause of the deep cuts in reported emissions lies with a requirement on all companies to report emissions from more than 29 different fuels.
As a result, the vast majority of BAM’s emissions reduction can be attributed to a drop in the use of gas oil, which is widely used in on-site generators. Going forward this will be measured in a different way, which if used in the current table would have shown that BAM would have reduced its CRC emissions by 17%, rather than 65%, Putzel said.
“Along with our peers, we’ve raised concerns about the way the CRC is set up. It just doesn’t suit the transient nature of the construction sector.”
Tom Robinson, chief sustainability officer for Carillion, agreed that the figures were distorted and therefore unfair to companies outside of construction that had made an effort to cut emissions. “If people are reading the PLT and thinking we’ve cut out emissions by 40% through proactive measures in its entirety, then it is misleading,” he told BusinessGreen. “It’s very different for businesses that have a relatively fixed location, such as manufacturing. Their footprint is going to be relatively stable, but if you’ve got a major construction project then your use of fuel is likely to vary dramatically.”
The PLT results debuted last year, and this year’s will be the last after the government announced its abolition in last year’s Autumn Statement as part of a “simplification” of the CRC scheme.
A better understanding of firms’ carbon emissions might come later this year when the government introduces a legal requirement for all FTSE-listed companies to report carbon emissions in their annual reports. “It will provide a more informed picture on how various companies stack up,” said Symons. “The CRC has been a complicated system and government has possibly recognised fact that it was trying to be a little too clever and this is the last table to be produced.”
