Day: November 10, 2024

Depending on the nature and location of a company’s business, the goals of net zero can represent very different priorities, even for seemingly similar operations. Materiality assessments are meant to help organizations focus efforts where they will have the most significant impact, but what happens when certain operations are composed of multiple organizations, whose exact roles may vary based on the nature of the program or project? Is it naive to think we can have actual “apples to apples” comparisons between companies within sectors, especially when they are increasingly using their net zero goals as differentiators in business development?

What the industry needs to always be aware of is that the easiest way to limit emissions is to leave them out of the equation. Many net zero commitments only focus on Scope 1 and 2 emissions, placing Scope 3 goals farther down the timeline or excluding them altogether. While that is logical within the context of “starting first with what you can control” (versus what is “upstream” or “downstream” or being external to the physical facility), there are inconsistencies when applying the same boundary parameters across sectors, or even within organizations.

Scope 3, “purchased goods and services,” can frequently become a dumping ground for many things just because an intermediate vendor is involved. Even distinctions like “operational control” can mean something different from an accounting perspective compared to the true nature of operations.

This may be more straightforward for organizations with relatively consistent operations and settings, like a professional services company (e.g., a law firm or architecture firm) working in an office building, or even a manufacturing facility with relatively consistent output, but what about more complex and dynamic operations such as those within the construction management industry? Projects come and go; some are within a single reporting year, while others overlap multiple years (how absolute reduction targets account for business fluctuation or growth is its own separate conundrum).