Carbon Reporting: A new sustainable standard for the construction industry

With COP26 now behind us it is important that we continue to strive to create a more sustainable and environmentally conscious world. One industry which has a crucial role in this process is the construction industry. Worldwide it is estimated that the built environment is responsible for around 40% of global carbon emissions, with 10% of that coming from the construction phase.

It is recognised that the construction industry plays an active role in helping to reduce this figure. The International Cost Management Standard 'ICMS' (first published in 2017 to provide a standard for measuring construction costs and later updated to include life cycle costs) was updated in November 2021 ("ICMS 3") to include a methodology for counting the embodied carbon that a project will create.

ICMS 3 can be used for both the construction phase and the use of the building or other structure.

By implementing ICMS 3, it allows for:

1. Construction life cycle costs and carbon emissions to be benchmarked
2. The causes in differences in life cycle costs and carbon emission between different projects to be identified
3. Improvement in investment decision making on the design and location of construction projects
4. Greater certainty in the quality of data used.

It is worth noting that ICMS 3 is simply a reporting system - the actual calculation of carbon emissions (or costs) may vary between country to country. ICMS 3 does however provide guidance on the approach for ensuring that like is compared with like and provides examples of ISOs and ENs that could be relevant.

So, who could benefit from using ICMS 3? A couple of examples are included below.

Funders

With a consistent and recognisable standard, funders of projects will now be able to compare potential projects in regards to their carbon emissions. This aligns with a greater emphasis on ESG decision making. By being able to accurately review the potential carbon emissions of a proposed project funders will be able to decide if the project fits with their ESG goals.

One current debate relevant to this is the recent controversary surrounding demolishing the current Marks and Spencer's building on Oxford Street, London.

Critics say that more should be done to promote the refurbishment of existing buildings rather than demolishing them. The new standard will allow for evaluations to be made about whether retrofitting buildings compared to demolishing them is a more viable option in relation to environmental goals.

Employers

The standard will allow for a more consistent tendering process. Employers will now be able to set a recognised methodology of how carbon emissions are to be reported.

This will provide clarity to contractors who now will have a clearer framework by which they are to record their carbon emissions.

The Royal Institute of Chartered Engineers are planning on incorporating ICMS 3 into their standards and guidance for all members.

Summary

The introduction of a worldwide carbon reporting standard is a welcome step. Not only should it assist parties to consider carbon emissions amongst the other matters being reported but by including this alongside construction costs and lifecycle costs it is a move towards the recognition that carbon emissions should be compared alongside costs.