The Internet of Things is growing at a staggering rate – there are now 3 connected devices for every human on the planet, and that number is growing exponentially.
But is your building keeping up with the pace?
Every day the built environment undergoes dynamic changes to its occupancy patterns, air quality and plant operation. Whilst these changes may seem subtle or routine, they can have a major impact on energy use, carbon emissions and occupant wellbeing.
These impacts often go undiagnosed, which is part of the reason that building emissions are nearly four times higher than design estimates (even amongst modern, well designed buildings!)
With increasing energy costs and tenant demand for sustainable, productive working environments, making sense of these changes has never been more important.
Could a Smart Building Gateway be the solution?
Smart Building Gateways provide a greater understanding of building performance, by optimising energy & comfort, and reaching data enlightenment.
A recent Carbon Credentials’ connected building “CAPP” project (Collaborative Asset Performance Programme) saw a 21% energy cost saving achieved immediately at no capital cost. Prior to being connected this London office building was believed to be operating well, with site personnel unaware of the savings potential that existed.
But once the gateway was deployed, enormous potential was seen for improved operational control thanks to the data insights enabled by the Smart Building Gateway that were simply not possible using existing industry-standard BMS trending and visualisations.
So how can you achieve similar results?
It might be easier than you think. With IoT costs dropping and more flexible solutions entering the market, there is no better time to embrace intelligent building energy performance.
Carbon Credentials offers flexible solutions that enable powerful insight on performance without interfering with your building operations or security.
We then work in collaboration with your team, leveraging data insights to drive meaningful reductions in energy & carbon, and improved operation and comfort.
Why do so many strategies for technical energy reduction rely on new buildings?
How Will the Internet of Things Drive Energy Performance?
Digital Disruption in Commercial Real Estate – Opportunity or threat?
[Updated] Organisation completing science-based targets (SBTs) often experience challenges throughout the target setting process. Carbon Credentials has helped numerous clients satisfy the requirements set by the Science-Based Target initiative (SBTi) as many find the Scope 3 emissions assessment can often be the most troublesome requirement.
So what are Scope 3 emissions?
The Greenhouse Gas Protocol (GHG Protocol) is the most widely used accounting standard for GHG emissions. In another blog, my colleague Kyna wrote about the use of emission scopes for allocating emissions for investor reporting. The same methodology is also drawn upon by the SBTi to provide the basis for long-term target setting.
This GHG Protocol categorises an organisation’s emissions into three “scopes”.
- Scope 1 emissions (direct emissions) are defined as emissions from sources that are owned or controlled by the organisation. This might include, for example, natural gas combusted in a boiler at a company’s head office.
- Scope 2 emissions (indirect emissions) are emissions from purchased electricity, heat, steam or cooling consumed by the company, but generated elsewhere.
- Scope 3 emissions (other indirect emissions) are emissions that occur as a consequence of the operations of the organisation but are not directly owned or controlled by that organisation. For example, emissions from waste generated by a company are defined as Scope 3 emissions.
The GHG Protocol Scope 3 guidance outlines the 15 different Scope 3 categories and each should be assessed in terms of their materiality in order to understand what an organisation should report on. A summary of the three scopes of emissions and their definitions can be seen in the infographic below.
Scope 3 emissions are especially important for organisations because they often make up the largest portion of the overall footprint. The challenge organisations face in quantifying Scope 3 lies in the degree of control they have over these activities and the collection of data associated with them. Paradoxically, the most significant emission reductions can be made by targeting Scope 3 activities. By calculating Scope 1, 2 and 3 emissions, an organisation can understand its full climate change impact and prioritise efforts to reduce emissions.
What does the Science-Based Targets initiative require for Scope 3?
Previously, the SBTi only recommended that companies submitting targets undertake a Scope 3 screening, but this is now a requirement of the process. This means that organisations must look at all relevant Scope 3 categories and determine their significance.
The SBTi requires that if Scope 3 emissions make up over 40% of total Scope 1, 2, and 3 emissions then the majority of Scope 3 emissions must be included in the target. The “majority” is defined as the top 3 categories or 2/3 of total scope 3 emissions.
In terms of ambition, it is not a requirement that Scope 3 targets are in line with a 2 degrees scenario, but that the targets are challenging and robust. The organisation must demonstrate that their Scope 3 targets are addressing the main sources of GHG emissions within their value chain in line with current best practice.
So how do I begin with setting a target on my Scope 3 emissions?
So far, most organisations have focussed on Scope 1 and 2 emissions and many are not yet even measuring Scope 3. The graph below demonstrates that over twice as many UK CDP respondents are setting Scope 1 & 2 targets versus those companies that are setting Scope 3 targets.It can be difficult to set a target when there is no baseline data to compare against. Subsequently, there is a lot of uncertainty about how to get started on the journey. The process diagram below gives a high-level understanding of the steps to evaluating an organisation’s value chain impacts: The first step in the process is to perform an initial Scope 3 gap analysis. The gap analysis is where organisations can assess current reporting against the 15 Scope 3 emissions categories to determine whether all relevant emission sources are covered. This analysis will allow you to either move on to set your targets or demonstrate that more work must be done in this area.
What should I do next?
If the results of the gap analysis show you haven’t quite analysed everything you need to, firming up the Scope 3 reporting boundary will be of huge benefit and move you along the SBT process. Remember, a central requirement of the SBTi is to demonstrate that you have considered the relevance of emission categories included and can provide a justification for excluding the others.
By evaluating Scope 3 emissions against the GHG Protocol Value Chain criteria, a company can identify which emission sources are truly relevant to their organisation and should, therefore, be included within the target. My colleague Scarlett Benson will describe this process in more detail in the second part of this Scope 3 SBT blog series.
If you would like help understanding your Scope 3 emissions or developing a science-based target, please get in touch with one of our experts here.
Emma Watson, Consultant
[Updated March 2018. Originally posted July 31st 2017]
We asked a group of Sustainability Directors at our recent event on Streamlined Energy & Carbon Reporting how they expect their energy costs to change over the next 5 years:
- 42% said they expect to see an increase of 4%
- 58% said they expect to see an increase of more than 6%
Given the regulatory changes ahead, we expect energy costs to actually increase by more than 10%.
The delivered price of energy to your business is made up of the commodity cost and the pass-through regulated costs. The regulated costs now make up over 60% of the total cost you pay as a business. While the commodity costs of electricity and gas remain relatively low, with some degree of volatility, the regulated charges will increase by 20-30% in coming 3-5 years
Most businesses are not ready for this increase. They will need to prepare by taking either or both of these possible approaches:
- Adding the increase into their budgets for medium-term planning, while finding ways for the rest of the business to absorb the cost or grow sales and margins to counteract it (a 10% increase in costs will require a 5-10x additional value in sales revenue to pay for it).
- Executing a new energy strategy that drives down energy costs to enable flat year-on-year costs, or better still reducing overall energy costs.
The second approach is the better option for any business, but achieving a reduction in costs is difficult if most of the basic energy efficient changes have already been done, such as installing LED lighting.
The question then becomes, how can you go above and beyond basic energy efficiency measures?
Our work on advanced data analytics and energy performance is driving an average 14% reduction in energy costs. We are proving that it is possible, in the face of growing energy regulated prices to drive overall energy cost reductions. The key ingredient is understanding the data.
We found that businesses are often unaware that regulated charges are applied at different times of the day and can vary by region across countries. It is difficult for businesses to assess building performance at the times when electricity is costing 2x or 3x more than usual.
Through connecting buildings to our ADAPt system (Assured Data Analytics Platform), we are enabling our clients to see how their buildings are performing and helping them to drive actions to save energy and improve the work environment for the people in the building. It’s a win-win and can reveal a goldmine of new opportunities for cost reduction and improve wellbeing.
If you are interested in learning how this approach can be applied to your business, then please contact us here.
Earlier this week, the International Organisation for Standardisation (ISO) published their 2016 Survey results detailing the total number of ISO 50001 Certificates in the world as of 31st December 2016. The results show that there were just under 19,000 ISO 50001 certificates worldwide, which represents a 60% increase compared to the previous year.
Delving into the survey results the greatest share of the ISO 50001 certificates is held within Europe, which accounts for 90% of the total and seven out of the ‘Top 10’ countries for number of ISO 50001 certificates.
In 2015 the UK saw the total number of certifications increase significantly. While this boost coincided with the compliance deadline for ESOS Phase 1, the Environment Agency released data stating that only 20% of certificates issued in 2015 were in connection with ESOS compliance, meaning that ESOS cannot be credited as the main driver for this growth. This proposition, that ISO 50001 Certification in the UK is being driven by reasons other compliance, is reinforced again in the new statistics, which show a 92% increase from 2015 to 2016 without any coinciding compliance event, such as ESOS phase 1’s deadline.
So why are more UK organisations using ISO 50001 certification?
- Governance – As a globally recognised standard, ISO 50001 certification demonstrates the strongest commitment to energy performance improvement to both internal and external business stakeholders.
- Embedding continual improvement – Businesses want a system that will embed continual improvement, ensuring energy saving opportunities are not just identified (as often seen with ESOS energy audits) put acted upon.
- Best practice compliance – ISO 50001 provides a best practice framework for identifying and complying with all legal and other requirements related to energy use, reducing risk of non-compliance from the corporate through to site specific level.
- Contractual and bid requirements – ISO 50001 is fast becoming a key component of contractual and franchise requirements and is recognised as a key driver for improving tender and bid applications. Businesses are implementing ISO 50001 either in response to these current requirements or in anticipation of future requirements.
Want to find out more?
Analysis of this survey data in this blog is just the start. Join us on Thursday 16th November for our event Decoding ISO 50001; Understanding the value, addressing the challenge to learn more.
If you would like to find out more about how we could support your ISO 50001 journey, please also contact our performance team here.
Senior Environmental Auditor
Created in 2013, the Carbon Credentials Charity Initiative (3Ci) is our workplace volunteering and charity fundraising scheme, set up and run by Carbon Credentials employees.
As a professional services firm in the sustainability sector, we at Carbon Credentials are keen to have an impact across the three pillars of sustainability: environmental, economic, and social. Our vision with 3Ci is to showcase the role businesses can play in tackling global issues and delivering sustainable transformational change.
Ashden is a charity that champions and supports sustainable energy innovators to accelerate the shift to a low carbon world through increasing the take-up of sustainable energy. This mission is closely aligned with our own – to enable a global low carbon economy. Because of this, 3Ci has partnered with Ashden to donate our consultants’ skills and expertise to support the charity in its work.
The LESS CO2 sustainable schools programme is a free, energy efficiency programme created by Ashden that is available to any UK school, including academy, council-run, or independent schools. The three aims of the LESS CO2 programme are to work with schools to:
- Reduce energy usage
- Save money on bills
- Lower CO2 emissions
Through a series of workshops, peer mentoring, expert advice, and resources, school staff are empowered and equipped to make changes and improvements to their school with the help of the LESS CO2 programme.
To date, the LESS CO2 programme has worked with 269 schools, reaching 135,800 pupils. Where data was available, the programme managers could identify that participant schools had seen significant monetary savings. However, because of the limited size of the dataset they were using, they wanted to gain a clearer picture of the programme’s impact.
Our data scientists offered to help. We used the open access database of display energy certificates (DECs) to create a greater sample size of schools and energy consumption data. Using this larger data set, we were better able to analyse any changes in consumption that had occurred due to the LESS CO2 programme.
The outcome was both clarity and confidence for Ashden on the impact of the LESS CO2 programme. We turned the results into an infographic that demonstrates typical programme savings. This was used as a display for the programme at the annual Ashden awards and can be seen above.
According to a report entitled “Low Carbon Behaviour Change”, experience suggests a well-executed employee engagement campaign can achieve savings of up to 10% on energy. With an overall energy saving of 13% as shown above, our analysis demonstrated that the LESS CO2 programme has been particularly effective in having a significant impact on the schools it works with in terms of energy, emissions, and monetary savings.
“Carbon Credentials’ evaluation of the impact of our LESS CO2 programme for schools will be an invaluable tool for Ashden. Their expert and in-depth analysis of our data has resulted in a set of metrics that are robust and externally verifiable. This in turn will help Ashden convince funders and partners that LESS CO2 is making a demonstrable difference in helping schools save carbon and save money. A massive thanks to Carbon Credentials for all their hard work on Ashden’s behalf.”
Ed Dean, Ashden Head of Development.
We are so pleased that the time and skills donated by Carbon Credentials through 3Ci has provided value to the LESS CO2 programme. We hope that by demonstrating the impact of their programme in a more robust manner they can keep on saving kilowatt-hours, pounds, and tonnes of CO2 at even more schools around the country!
If you know of a school that would be interested in taking part, spread the word on the Ashden LESS CO2 programme! Click here to register your interest and a member of the LESS CO2 team will contact you with further information.
Find out more about 3Ci here.
Emma Watson, Consultant
Last week my colleague Emma Watson published the first of a series of blogs on Scope 3 emissions and science-based target setting.
Emma provided an overview of Scope 3 emissions and the Science Based Target initiative (SBTi) requirements for Scope 3; one of which is the requirement that companies demonstrate that they have considered the relevance of each of the 15 Scope 3 emission categories and can provide a justification for any exclusions.
My blog here focuses on how companies should assess whether a Scope 3 emissions category is relevant or not, and therefore whether or not it needs to be included within the Scope 3 target
Back to the basic principles of GHG accounting
The GHG Protocol sets out the GHG accounting principles of relevance, completeness, accuracy, consistency, and transparency. These are intended to underpin and guide GHG accounting and reporting to ensure that the reported information represents a faithful, true, and fair account of a company’s GHG emissions.
Applying these principles can be more challenging for Scope 3 emissions reporting as companies generally have less visibility and control over these emissions. It is therefore important that the principles of completeness and accuracy are appropriately balanced with the principle of relevance so that Scope 3 categories can be excluded from the inventory if they are deemed not to be relevant.
Is this category applicable to your organisation?
A simple, first step should be to understand if any of the 15 Scope 3 categories are simply “not applicable” to your organisation. For example, depending on your consolidation approach to the organisational boundary, emissions from upstream leased assets may already be included within Scopes 1 and 2. Therefore “Category 8: Upstream Leased Assets” would not be applicable.
Or, for example, your organisation may not have any franchise arrangements, and therefore emissions from “Category 14: Franchises” would also not be applicable. We recommend, in line with the principle of transparency, that companies demonstrate what actions were taken to understand whether these emission sources are applicable or not, document this within an evidence pack, and provide a clear justification for exclusion within their public reports.
Is this category relevant to your organisation?
When considering relevance, a useful starting place can be to have a look at what other companies in your sector are doing. The graph below shows how 14 UK Real Estate companies have reported on relevance of each of the 15 Scope 3 categories within their 2016 CDP submissions. From this we can see that emissions from 5 categories are frequently reported as relevant:
- Category 1: Purchased Goods & Services;
- Category 3: Fuel-and-Energy Related Activities (not included in Scopes 1 and 2);
- Category 5: Waste Generated in Operations;
- Category 6: Business Travel; and
- Category 13: Downstream Leased Assets.
While looking at what others are doing is a useful starting place and can inform your understanding of Scope 3, every organisation is different, and you should, therefore, carry out company-specific relevance tests as shown below:
- Can you influence emissions from this category in any way?
- Do emissions from this category contribute to your risk exposure?
- Are emissions from this source deemed critical by key stakeholders?
- Are emissions from this source outsourced activities that are typically performed in-house by other companies in your sector?
- Have emissions from this source been identified as significant by your peers or by sector-specific guidance?
- Do emissions from this category contribute significantly to your total anticipated Scope 3 emissions?
It is relatively simple to assess each of the 15 categories against the first five of the relevance criteria listed above by engaging with key internal and external stakeholders. However, the 6th criteria above presents us with a chicken and egg situation; in order to determine whether or not we need to quantify the emissions, we have to quantify them to establish their size and therefore relevance!
Fortunately, as part of this relevance test, we are able to use less specific, secondary data to establish the size of GHG emissions in each of the 15 categories. This avoids overly burdensome primary data collation for categories that turn out to be not relevant.
Secondary data includes industry-average data (for example, from published databases or literature studies), financial data, or proxy data (i.e. where you use specific data from one activity in the value chain to estimate emissions for another activity in the value chain).
The secondary data that you use to model your Scope 3 emissions will depend on your countries of operation, your sector, and a number of other company-specific factors. To find out more about different modelling techniques for estimating Scope 3 emissions, please contact our GHG accountancy experts here.
Prioritising emissions based on relevance
Once each applicable category has been estimated in this way, the emissions categories can be prioritised based on relevance. High priority emissions categories will then likely require refinement of emission estimates using more specific data, particularly if you are looking to set a quantitative target.
As Emma mentioned in her blog, from a science-based target setting perspective, if your Scope 3 emissions are more than 40% of your total emissions then you must set a Scope 3 target, the boundary of which must include either the top 3 of the 15 Scope 3 categories or two-thirds of total Scope 3 emissions.
The next, and final, blog in the series will focus on how to set a Scope 3 target in alignment with the Science-Based Target initiative criteria, and will provide some useful examples of how different companies have tackled this.
Scarlett Benson, Senior Sustainability Consultant
The Display Energy Certificate (DEC) dataset was recently re-released. The DEC is a rating of the operational energy use of all public buildings with over 250m2 of floor space. This dataset contains data for all sites in the UK that require a DEC, which accounts for just over 59,000 buildings in total. With so many buildings covering a wide range of operational uses, different building types have their own specific benchmarks. The combined energy spend for all these sites comes to over £2.4 billion per annum, which represents a wealth of information and saving opportunities.
Using this data, Carbon Credentials singled out the Higher Education (HE) sector to carry out analysis to identify key areas available for energy performance improvements. The specific DEC benchmark that covers the HE sector is called ‘University Campus Buildings’ and there are over 5,000 buildings within this benchmark. When looking at just the largest 306 consuming assets in this benchmark that rely on mechanical plant we were able to identify potential savings worth £15.6 million that could be unlocked.
The HE sector was chosen for this investigation because the sector has already made a strong commitment to supporting sustainability and energy reduction. This commitment is shown by the sector-level carbon reduction target of a 43% decrease in carbon emissions by 2020 from a 2005 baseline.
How Are University Campus Buildings Currently Performing?
The operational rating of a building tells you how efficiently energy is being used when compared to a typical building of its type. When viewing all sites within this benchmark, buildings will be clustered around the C & D rating. This is because these ratings are typical for buildings within this benchmark. The graph below demonstrates this distribution.
Before energy performance improvements can be implemented, it is essential to understand the key characteristics of a building that affect energy efficiency. Through our experience of working across a wide range of buildings, Carbon Credentials understands that high consuming buildings with a large amount of mechanical plant activity are often operating well below optimal efficiency.
The reason for this is that plant equipment such as chillers, air-handling units, pumps, and fans typically contribute up to 50% of an entire buildings consumption. Gaining visibility over this large portion of energy consumption has traditionally been a huge challenge. If we filter the dataset to show only large consuming assets (assets with an above £150,000 energy spend) that use a mechanical plant, the distribution of the DECs should show a clustering around the poorer energy efficiency ratings. The graph below shows exactly this – buildings that meet the characteristics set out above are more clustered around the E, F & G ratings, indicating they are performing worse than a typical building in this benchmark.
How to close The Energy Performance Gap?
The fact that University Campus Buildings spending over £150,000 with a large amount of mechanical plant usage are performing significantly poorer than other buildings typically do represents a huge missed opportunity. Traditionally, visibility over consumption patterns within these buildings has been difficult to achieve. However, this has potential to change – through Carbon Credentials’ targeted analytics and BMS insights, it is now becoming easier to identify and implement targeted energy savings initiatives.
The method that Carbon Credentials does this with is called our Collaborative Asset Performance Programme (CAPP). Through the delivery of CAPP, Carbon Credentials has consistently found energy savings of 7-15% for high spending assets such as these. This is achieved by establishing intelligent control of energy use by providing new visibility of plant operation and proactively identifying and achieving sustainable energy savings.
The large-consuming university campus sites, identified as having a complex mechanical plant, have a combined energy spend of £104 million. Based on savings that Carbon Credentials has made in previous buildings there is a major opportunity to reduce energy costs by up to £15.6 million. The carbon savings from such a rollout would equate to the annual carbon emissions of over 6 large universities, making a significant impact on the 43% reduction target set by HEFCE. This is the reason why Universities are numbered among our clients already walking the CAPP path with us, and why you should consider it too!
If this interests you and you would like to find out more about our Collaborative Asset Performance Programme then please contact us here.
James Hawkins, Analyst
We have been working with Village Hotels (Village) as their Trusted Energy Partner since 2011. Our journey with Village started with supplying energy data and supporting CRC compliance but has grown into an incredibly exciting relationship that is focused on directly reducing energy use.
With 28 hotels across the country, there’s no doubt that Village needs a lot of energy to keep its gyms going, rooms running, bars bustling and spas spotless! This presents a good opportunity for ensuring efficient operations.
To fully understand where they use energy and what the opportunities for energy savings were, Village commissioned Carbon Credentials to complete energy audits at all their hotels. These audits identified a significant investment opportunity in energy reduction measures that would directly save Village money on their energy bills and energy usage.
With these potential investments in mind, work began to develop an Energy Strategy.
The Village Energy Strategy has been developed in the structure of Carbon Credentials’ Collaborative Asset Performance Programme (CAPP). This programme has two elements:
So what are we doing?
From the technical side, our engineering team has been working closely with Village’s on-site technical teams and suppliers to ensure that Village’s Building Management Systems (BMS) are running as efficiently as possible. By making small changes to the BMS, and including temperature set points and timings to the equipment, we can measure immediate and consistent energy savings using our in-house data platform (ADAPt).
Working with people
We know that if this programme is going to be effective then the technical teams can’t do this alone. We recognise that Village’s Energy Strategy will not be effective without the full support and buy-in of their staff.
As an example, during a recent site visit to Village’s hotel in Elstree, working with the Operations Manager and Maintenance Manager, together we were able to alter the air-conditioning to align with their booking schedule for the week rather than to standard operating times.
To link these two sides together we will be travelling up and down the country providing on-site training, clearly labelling which equipment can and can’t be switched off and making sure staff have a chance to share ideas.
So what about those pieces of kit that aren’t controlled by the BMS?
As fantastic as it would be to have everything controlled automatically, the reality is that there is still a lot of equipment that can be controlled by people. This is a great opportunity to engage staff as they can all have an impact, however small. During our site visits, we will be developing switch off checklists and providing signage to engage with and guide staff.
To read Village’s full Energy Strategy please follow the link here.
If you would like to understand more about the Collaborative Asset Performance Programme (CAPP) please contact our performance team here.
Tash Allard, Senior Engagement Analyst