“Let’s speak about Scope 3 emissions: the subsequent essential part in decarbonising the true property sector.”
This was the title of a weblog publish written by Cate Harris, group head of sustainability at Australia-based property large Lendlease, shortly after the launch of its local weather protocol final September, which goals eliminating its provide chain emissions, or Scope 3 emissions, with out the usage of offsets by 2040.
Such daring local weather communications are more and more uncommon in an age of greenhush. However below Harris’ management, Lendlease has been something however mum about its “absolute zero” commitments – which in contrast to a common “web zero” goal, excludes the opportunity of offsetting the agency’s residual emissions.
Within the foreword to the protocol, Harris argued that not having the security web of offsets “is what is important to deal with the local weather disaster” and “one of the simplest ways to drive funding in more durable to abate supplies”.
Scope 3 emissions, from the manufacturing of building supplies to the usage of electricty and pure gasoline by constructing tenants, make up 90 per cent of Lendlease’s complete emissions. However in addition they are usually the trickiest to mitigate, given massive corporations have the least direct management over this class of emissions.
Harris’ work to spark a worldwide dialog and drive an industry-wide consensus across the boundaries of Scope 3 reporting – which is able to quickly be necessary for listed issuers as jurisdictions throughout Asia, like Australia, Singapore and Malaysia, transfer to legislate the Worldwide Sustainability Requirements Board (ISSB)’s requirements – gained her a spot in the Eco-Enterprise Sustainability Management A-Checklist 2023.
“We’ve been tremendous overwhelmed by how well-received the protocol has been throughout the {industry}, ” mentioned Harris, who started engaged on greening the constructed surroundings 20 years in the past as an environmental engineer in Australia’s native governments, earlier than beginning her personal sustainability consultancy and embarking on her 15-year profession at Lendlease.
“We have been nervous that folks would possibly suppose it’s simply Lendlease pushing out one thing that nobody else can do, however the {industry} has been actually open to it. In the meanwhile, plenty of the local weather targets organisations have put out are simply addressing emissions they’ve received direct management over. Not many have targets that embody Scope 3.”
On this interview, Harris tells Eco-Enterprise why it’s in Lendlease’s enterprise curiosity to advocate for suppliers who’re piloting low-carbon constructing supplies and to brazenly share about its journey in figuring out and chopping out Scope 3 emissions.
You’ve been working within the sustainability area from as early as 2004. How did you find yourself on this position?
I reduce my enamel on the opposite facet with coverage and technique from a authorities perspective with some actually progressive native and state governments in Australia that have been arising with new planning schemes round inexperienced buildings. However I used to be sick of being instructed by the federal government that consultants and builders didn’t need to do that form of stuff, as that was not my expertise having labored carefully with them. So I made a decision to leap the fence and arrange a sustainability consultancy arm via Hyder Consulting at the moment, which has since been purchased out by a bigger conglomerate. Then a possibility got here as much as work with Lendlease, firstly within the funding administration enterprise. During the last 15 years, I’ve had seven totally different job titles.
5 years in the past, I took on a secondment because the managing director for the United Nations World Compact’s community in Australia. It was good to have the ability to hear how the who’s who of company Australia have been approaching their sustainability-related challenges. I introduced that data again into Lendlease, the place I took on the group head of sustainability position and world head of the muse. We’ve repositioned our sustainability technique within the final 5 years and set some bold local weather targets: to be web zero for our Scope 1 and 2 emissions [a company’s direct and indirect emissions] in 2025 and absolute zero by 2040. So no offsets and no excuses for our Scope 1, 2 and three emissions. We’ve additionally set a goal of making A$250 million (US$165 million) price of social worth by 2025.
Previously 20 years, the place have you ever seen probably the most progress and the place have issues remained across the similar?
We’re beginning to see some acceleration across the local weather agenda. We’re now talking a way more technical and complicated language of several types of carbon emissions. Scope 3 emissions are actually thrilling as a result of it’s the place we have now to advocate for change throughout our worth chain and work with suppliers on decarbonising among the hardest to abate constructing supplies just like the metal, cement, concrete, glass and aluminium sectors. So we’re investing considerably in innovation and offering that market sign and entry to a pipeline for our provide chain companions to pilot new low-carbon merchandise.
A few of the slower shifting agendas that always frustrate me are round nature and biodiversity in addition to social worth. The previous is lastly beginning to transfer sooner with the Taskforce on Nature-related Monetary Disclosures (TNFD) framework. Hopefully it should achieve the identical momentum that the Taskforce for Local weather-related Monetary Disclosures (TCFD) created for the local weather and carbon agenda. On the social worth agenda, it frustrates me that plenty of well-meaning teachers within the social return on funding area need every little thing to be so excellent that the speed at which we’re growing methods to account for social worth creation has been stunted. We’re letting perfection get in the way in which of evolving as we go, like we did with inexperienced constructing score instruments 15 years in the past, the place we began someplace, checked out what labored and didn’t work, and made enhancements alongside the way in which.
Having set our social worth goal nearly 5 years in the past, we need to change the dialogue within the {industry} from one in every of philanthropic giving to one in every of social worth creation. So being accountable for the social worth we create by delivering the group’s wants, not simply handing over a cheque to a charity and wishing them luck. That’s an space that I’d prefer to see transfer sooner.
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Our change alone will not be going to create the transformation we have to tackle local weather change within the time we have now left.
What are a few of your proudest achievements over the previous 12 months?
Final 12 months, we printed the Lendlease Scope 3 emissions protocol. We needed to drive a consensus on how the {industry} ought to outline the boundaries for Scope 3, in order that when schemes like ISSB are legislated, like they’re going to be in Australia very quickly, we’ve all received a clearer concept of what to report on and traders, governments and different key stakeholders will be capable of evaluate apples with apples, as a result of the info shall be constant and clear. The work that Lendlease does is nice, however our change alone will not be going to create the transformation we have to tackle local weather change within the time that we have now left.
We’re beginning to see modifications in our provide chain and other people collaborating extra brazenly to deal with systemic challenges, whether or not or not it’s piloting new low-carbon merchandise in initiatives or the sector working collectively to advertise the usage of renewable diesel on building websites and organise consumers golf equipment to entry it.
Artist’s impression of the brand new Singtel Comcentre in Singapore which Lendlease helps to redevelop by 2028. It’s aiming for a 30 per cent discount in embodied carbon in comparison with the nation’s 2021 inexperienced constructing certification baseline. Picture: Singtel
However as soon as we agree on the boundaries of Scope 3, we’ve received two different large systemic challenges to deal with. Firstly, how can we ship the correct indicators to remodel the tempo and scale of our provide chain’s decarbonisation? One other piece is the entry to clear and prime quality Scope 3 information up and down the availability chain. Lendlease has roughly 40,000 suppliers on our books, so we’re trying to get behind an industry-led resolution for an open supply information platform that allows the availability chain to securely share their Scope 3 information.
Internally, we’re arising with our personal software program instruments by harnessing the entire mission lifecycle evaluation work we’ve finished, the place the workforce can kind within the primary data – corresponding to if it’s an workplace constructing in Singapore of roughly these dimensions with these variety of flooring – and readily perceive the embodied carbon impacts of that constructing relying on the totally different building strategies. So if I’m utilizing metal and concrete versus timber, what’s the embodied carbon from that? We’re ready to make use of the provider data that we have now to make that information fairly correct by choosing a specific kind of metal by Metal Firm A versus Metal Firm B, and assessing the place the mission would sit inside our personal emission discount trajectory.
So Lendlease is clearly enormous and might afford to make that change to low-carbon supplies and spend money on a sustainability workforce with the correct capabilities, applied sciences and instruments. However how can smaller corporations begin embarking on the same journey?
At the start, we’re a listed organisation, so we’re accountable to our shareholders about making good enterprise choices. We will’t simply willy-nilly spend further to make our sustainability credentials stack up. Once we have been growing our targets and getting our world management workforce and board to log out on them, we invited them to check the targets and assess whether or not we may genuinely obtain these targets. So we did plenty of work to grasp the place our emissions have been and recognised after we first set our targets that some options weren’t but obtainable to us, actually not at a commercially smart fee.
However the concept is that there’s a complete bunch of advocacy work that we are able to do between setting our targets in 2020 and 2040. We will advocate for governments to help these decarbonisation options via tax incentives, subsidies and coverage drivers. However like several small to medium sized enterprise, we nonetheless have to decide on commercially smart choices. We’re simply fortunate that there are plenty of actually good options coming available on the market now which can be priced comparably in some markets.
Organisations like ours will help small to medium enterprises by sharing our data and knowledge, as a result of if we’re the one ones doing it, then we’re not going to deal with the local weather problem. We’re being very clear about our journey, sharing case research, what’s labored, what hasn’t labored, so that others don’t must spend the time and assets to do the analysis.
What are among the distinctive challenges the Asia Pacific area faces in decarbonisation, in comparison with different components of the world Lendlease operates in?
If I have a look at Singapore particularly, the majority of our Scope 1 emissions relate to the usage of purple diesel gas on our building websites to energy vegetation and tools. Firstly, we need to electrify all of the vegetation and tools that we use on websites to assemble buildings, so we are able to use renewable sources of electrical energy. However till the electrification of all of the vegetation and tools turns into commercially viable, we have to have a look at different pathways to deal with that Scope 1 from diesel utilization.
Among the best transitional options is renewable diesel, which might considerably cut back Scope 1 emissions from diesel use. It’s an computerized swap so it doesn’t create any points from a efficiency perspective. Apparently, we supply for renewable diesel for our Australian operations from Neste in Singapore, one of many greatest refineries of renewable diesel; but our Singapore enterprise can’t purchase it domestically from Neste, as a result of they’re so busy exporting all of it around the globe. That’s the specific nuance to Singapore and the Asia area.
Our United Kingdom and Europe markets get entry to renewable diesel at a value corresponding to purple diesel, so it’s a no brainer. Now that our enterprise has launched another fuels coverage which requires the usage of renewable gas on all our UK building websites, our Scope 1 from building actions has been considerably lowered. So these kinds of mechanisms are actually highly effective.
In Asia, you’ve received the extra problem of renewable electrical energy. In Europe, it’s straightforward because the electrical energy grids are greening a lot sooner than different areas, so buying inexperienced energy immediately from the grid is far less complicated and extra economical; test the inexperienced field and also you’re good to go. In Australia, we utilise energy buy agreements (PPAs) and the acquisition of renewable vitality certificates (RECs) to make use of throughout our property and initiatives. It’s the same state of affairs in America.
Nevertheless, in Asia, the grids are usually not but inexperienced and there may be not a well-established RECs market in Singapore, Malaysia, or elsewhere within the area, so the workforce wants to acquire worldwide RECs (I-RECs). I-RECs are much less most popular, with no nationwide authorities oversight over the scheme and extra effort required to drive good governance outcomes via your buy. So there may be extra work required on the purchaser’s facet to confirm their attributes. The problem inside Asia is entry clear vitality.
The Alternate, TRX in Kuala Lumpur collaborated with the provider to develop a decrease carbon cement combine. Picture: Lendlease
Are you able to inform us extra about what you’re doing at ResponsibleSteel and the way readily adopted the certification has been to this point?
I joined the board [of ResponsibleSteel] a few years in the past. It’s a very thrilling worldwide organisation with some important members from the metal sector, like ArcelorMittal, BlueScope and Tata. It’s all about making a accountable metal customary to carry the manufacturing facet to account round 13 sustainability rules, from the greenhouse gasoline emissions element to the broader environmental impacts of metal manufacturing.
We’re the top consumer a part of the equation, however there are different members on the manufacturing and certification facet of issues. We’re advocating for the appliance of the requirements globally and attempting to drive as many metal producers to turn out to be members as we are able to.
For up-and-coming points you talked about, like nature and social worth, are they areas that Lendlease additionally needs to determine market management in? How are you going about doing that?
Definitely from a social worth perspective. In our sector, we work very a lot on the grassroots stage. We create the locations and the areas that folks stay, work and play in. So we’re attempting to vary the narrative within the sector, from simply being about philanthropic giving to precise social worth creation – so understanding what communities want and co-creating social worth with them.
For nature and biodiversity, in the meanwhile we’re similar to many organisations attempting to come back to grips with what that appears like in our sector. Clearly, our sector has a giant contact level with nature. Our city regeneration mission, for example, has some superb tales to inform about regreening arduous city environments and bringing biodiversity and nature again into cities. One in every of our buildings in Barangaroo, Sydney has a inexperienced roof hooked up to it that has beehives, which has introduced again biodiversity into a really artifical panorama. At the identical time, that biodiversity helps to maintain the rooftop photo voltaic panels cool in order that they work at a better effectivity.
However we’re aware too that as builders, our work has the potential to have a destructive affect on land and encroach on inexperienced areas. In the meanwhile, we’re simply embarking on a technique of understanding the place our impacts are utilizing issues just like the TNFD’s LEAP (Find, Consider, Assess and Put together) framework, in order that we are able to begin to get some information, analyse the place our greatest affect is and the place we should always focus our consideration to place the correct methods in place. We have been entrance runners with TCFD and we discovered loads from being leaders in that area. However in the meanwhile, we’re concerned in so many strains of labor. Our social worth and local weather targets are arising in 2025, so we need to be certain our eyes are on that whereas we work on the character and biodiversity area.
There are such a lot of totally different reporting requirements to maintain up with and a lot reporting to do. Do you ever really feel burned out?
There’s a enormous quantity of reporting to do. A enormous share of my position feels prefer it’s simply tied up with reporting lately. What we have now tried to do is deal with the transparency of our information for a begin. So we publish our personal environmental, social and governance (ESG) databook yearly in November, which is a one-stop store for whoever’s enthusiastic about our ESG-related information units. So you’ll be able to clearly see how we outline ESG, the totally different metrics we acquire and all the knowledge reported 12 months on 12 months. We began doing that as a result of we discovered that the reporting frameworks and schemes on the market have been rising exponentially and also you would want a complete different organisation simply to get your reporting finished.
We checked out what our traders valued and used that to form how we pull collectively our ESG databook. So we began to say ‘no’ to among the schemes to be sincere, as a result of we weren’t seeing demand from our key stakeholders to report below them. So long as they’ve received a sure kind of knowledge in a format they have been pleased with, which for us ended up being the info ebook, they have been effective. So we simply thought we have been higher off placing time and vitality into our information ebook that serves quite a lot of totally different functions. Then we are able to deal with the reporting schemes that meet legislative necessities in addition to what our traders and analysts extract probably the most worth from, fairly than attempting to stretch ourselves too skinny and spend all of our time pulling collectively the identical numbers simply in numerous methods, for not a lot worth.
We’ve been reporting below the United Nations World Compact for a decade and TCFD for the final 5 years. We’re simply gearing up for the ISSB requirements, which the Australian authorities is bringing into laws. Being a listed entity in Australia, we’ll be reporting below that framework by the top of FY25.
What’s thrilling is the truth that our finance groups are beginning to get way more concerned now because of the ISSB requirements and the approaching collectively of SASB [Sustainability Accounting Standards Board] and TCFD. The consolidation is sensible as a result of it means we’re not reporting below 4 various things, we’re reporting below one. Because it’s hooked up to accounting requirements, it additionally means our finance workforce is working alongside us as we put together these studies, and finally will probably be them reporting below these schemes as soon as we’ve onboarded them and introduced them on top of things.
It seems to be more and more dangerous to publicly put out bold local weather objectives in an age of greenhush. How ought to sustainability heads navigate this panorama?
Formidable local weather targets, which embody a dedication to deal with Scope 3 emissions, are what the world urgently wants. Not speaking – or worse, not even setting objectives – is a threat to organisations who shall be unable to fulfill their regulatory reporting obligations, not to mention the rising demand for clear disclosure from traders, prospects and the group at massive.
Once we publicly launched our absolute zero by 2040 goal, we referred to as it our ‘moonshot’. We knew it was bold and we didn’t have all of the solutions to attain it at that time, however we determined it was our duty to steer and to behave. As a part of our Mission Zero marketing campaign, we made a dedication to share our journey. For us which means sharing the wins in addition to the challenges we’re but to resolve.
Our dedication to balanced and clear reporting is an efficient antidote to overstating claims or making deceptive statements and what management in sustainability requires of us. Making correct and verified claims with acceptable {qualifications} is one of the simplest ways to construct belief and confidence with investor and prospects.
Cate Harris was one in every of 10 sustainability leaders chosen for the Eco-Enterprise A-Checklist 2023. Learn our tales with the opposite winners right here.
