Balfour Beatty

Carbon per million dollars of revenue. The legacy industry-standard reference (CDP, MSCI). Useful for cross-sector context, but distorted by margin — high-margin firms appear artificially efficient. Read alongside the operational and asset intensities for the full picture.

OpEx (operating expenditure) is the running cost of the business — staff, services, energy, materials. This shows how carbon-intensive operations are per million dollars of spend. Removes the margin distortion that revenue-based ratios introduce.

EVIC (Enterprise Value Including Cash) is the firm's total capital footprint — equity + debt + cash + minority interest. The EU's standard intensity measure (SFDR PAI 3) — answers: how much carbon does each million of capital deployed in this business produce?

PP&E (Property, Plant & Equipment) plus leased real-estate assets is the firm's physical infrastructure on the balance sheet. This shows the carbon intensity of that physical footprint — uses Scope 1+2+3 for consistency with the other headline intensities. Surfaces stranded-asset risk for asset-heavy firms.

Carbon per million dollars of physical infrastructure — PP&E plus leased real-estate, including upstream and downstream leased emissions (Scope 3 categories 8 + 13). The most complete view of physical-asset carbon intensity, relevant for REITs and infrastructure-heavy firms.

Balfour Beatty uses renewable energy tariffs backed by the Renewable Energy Guarantees of Origin (REGO) scheme to address Scope 2 emissions and is reviewing opportunities for Power Purchase Agreements that would directly connect operations to renewable energy sources. Renewables also feature in its fuel hierarchy at the top tier: 'Zero carbon — electricity or green hydrogen created from renewable sources'.

Balfour Beatty does not, at present, offset any GHG emissions arising from operations, on the basis that there are significant opportunities to abate emissions across Scopes 1, 2 and 3 through implementing efficiencies, modern methods of construction and the adoption of low-carbon technologies and materials. If offsetting is undertaken in future it would abide by the Oxford Principles. The Group recognises the role of 'insetting' GHG emissions by implementing reduced or low-carbon solutions within its value chain and supporting the decarbonisation of the construction sector.

• Plant, fleet & generator fuel: efficiency, electrification, alternative fuels

  Around 70% of UK Scope 1 emissions come from fuel purchased for plant, fleet and generators. Three-pronged approach: efficiency, electrification, alternative fuels. Implementing fuel hierarchy (zero carbon → low → medium → high), reducing idling, telematics, deploying EcoSense cabins (up to 30% less emissions), EcoNet energy management on sites with 4+ cabins, Power Profiler tool.

• Resource efficiency and zero avoidable waste

  Targets to eliminate non-hazardous excavation waste to landfill in the UK by 2030; zero avoidable waste in the UK by 2040 and US by 2050. The Group has implemented the Construction Leadership Council's zero avoidable waste routemap, deploys Bridging the Gap action plans across Business Units, and developed innovations such as the Geopak reusable packaging system with Whitecroft Lighting (preventing up to 2 tonnes of packaging waste on Dunfermline Learning Campus project).

• Growing UK power transmission and distribution business

  The Group holds market-leading capabilities in UK power transmission and distribution, with the order book in this area more than doubling in 2024. Wins include first phase of £690m Skye 132kV reinforcement project for SSEN Transmission, £192m Argyll Substations, £363m Bramford to Twinstead Reinforcement, and selection as preferred partner for SP Energy Networks' Strategic Agreement for Transmission Overhead Line Works (up to £3bn tendering). Over 500 new starters in the UK Power Transmission and Distribution business in 2024.

• Plant, fleet and generator decarbonisation (efficiency, electrification, alternative fuels)

  Plant, fleet and generators account for 92% of Scope 1 and 2 emissions. The Group is taking a three-pronged approach: efficiency, electrification and alternative fuels. Trials of Syntech biofuel (100% UK waste cooking oil HVO alternative) achieve 80-90% reduction vs diesel. Asset & Technology Solutions team is developing battery storage solutions and a Site Energy Efficiency Dashboard (SEED) to optimise energy use.

• Plant, fleet & generator decarbonisation (efficiency, electrification, alternative fuels)

  Around 70% of UK Scope 1 emissions come from fuel directly purchased for plant, fleet and generators. Three-pronged approach: efficiency, electrification and alternative fuels. Minimum standards include EcoSense cabins (up to 30% less carbon), EcoNet energy management on sites with 4+ cabins, Power Profiler tool for site compounds, fuel hierarchy implementation and telematics-based idling reduction.

• Alternative fuels — Syntech biofuel over HVO

  Trialled Syntech biofuel — produced in the UK from 100% UK-sourced waste cooking oil — as a drop-in diesel replacement achieving 80–90% reduction in carbon emissions. Agreements in place with multiple OEMs and suppliers. In June 2024, after co-funding a deep dive into HVO, reaffirmed position not to promote HVO and focus on Syntech biofuel instead.

• Site cabin and welfare energy efficiency (EcoSense / EcoNet)

  Balfour Beatty mandates EcoSense site cabins (65% of UK cabins; ~30% less energy than traditional cabins) and the EcoNet energy management system which automatically powers down cabin equipment when not in use. 66 active EcoNet stations were deployed across UK sites at November 2023, saving 1,290 MWh. The mandate is overseen by the in-house Energy Management Unit (EMU).

• Diesel-to-electric/hydrogen plant and equipment transition

  Plant and equipment fuel (predominantly diesel) is the largest source of Group Scope 1 emissions. The Energy Management Unit (EMU) mandates low-energy assets via the Power Profiler tool, has deployed 60+ battery storage units to off-grid sites in 2023, and is trialling hydrogen fuel cell and hydrogen ICE generators, solar/hydrogen mobile welfare units, electric excavators, and hydrogen-hybrid highways maintenance vehicles. A dual-fuel hydrogen retrofit on the M77 project is expected to displace up to 30% of diesel usage. Idling reduction via telematics on the A63 project cut plant idling 36%→17%.

• Circular economy: waste reduction and ProjectSurplus

  2030 target of 40% reduction in waste tonnes per £m revenue (achieved for UK in 2023 vs restated 2021 baseline). Bridging the Gap plans embed mandatory waste reduction actions at BU level. ProjectSurplus marketplace launched October 2023 to facilitate transfer of surplus materials between sites. Pallet Loop trialled for pallet timber reuse on Canvey Island and being rolled out. 99% of UK construction waste diverted from landfill in 2023.

• Site electricity efficiency & retrofit

  Scope 2 strategy: analyse electricity consumption of projects, offices and depots, retrofit low-energy products and adapt working practices to avoid unnecessary consumption. US Navy Southeast portfolio energy efficiency project delivered 9,941,959 kWh of energy savings (HVAC, weatherproofing, LED lighting via ENGIE Services US partnership).

• Diesel reduction in vehicles, plant and equipment

  Balfour Beatty's GHG emissions are predominantly from the use of diesel in vehicles and plant & equipment, with 91% of Scope 1 & 2 being Scope 1. Reporting covers gas oil (red diesel) for mobile plant (forklifts, excavators, cranes, generators), 100% mineral diesel, biodiesel blends (5%+), Shell GTL diesel and hydrogen (blue, grey, green) as transition fuels.

• Stationary combustion: natural gas, boiler fuels and refrigerants

  Scope 1 stationary combustion is tracked separately for own estate, project & temporary sites, and landlord-purchased gas. Refrigerant losses (HFCs, SF6, PFCs) from installation/maintenance/dismantling of switchgear, AC and refrigeration systems are reported as direct emissions.

• Embodied carbon reduction through low-carbon materials (geopolymer concrete, recycled glass)

  At the Royal Botanic Garden Edinburgh Biomes project, the Group is trialling geopolymer concrete (a low-carbon concrete substitute made from up to 96% waste materials) and exploring glass recycling from the Victorian Palm house. Surplus topsoil reused locally rather than disposed. Aim is to identify scalable low-carbon alternatives for wider rollout.

• Tunnelling and earthworks emissions intensity

  Group acknowledged that 2022 carbon emissions increased in part due to a higher mix of tunnelling and earthworks (most carbon-intensive construction activities). Notes more progress required to embed sustainability into everyday operations as customers seek cost efficiencies. No specific lever target disclosed.

• Diesel plant & site generators - transition to electric/hydrogen

  Group identified over 130 ways to reduce site energy consumption. Pilot of hydrogen fuel cell generator at A63 road scheme replaced 100kVA diesel generator, saving 59,000 litres of diesel and 164 tCO2e annually. EcoNet tool and 600+ EcoSense cabins reduce site emissions by up to 30%; combined EcoNet+EcoSense expected to deliver additional 4,000-5,000 tonnes of CO2 savings annually across UK projects.

• Operational fuel and gas oil (red diesel) for mobile plant

  Balfour Beatty captures Scope 1 emissions from natural gas in own estate and project sites, plus gas oil (red diesel) used for mobile plant such as excavators, cranes, generators and heating. Reporting separates stationary vs mobile combustion. Operational mobile plant fuel use is a primary Scope 1 source for the construction business.

• Vehicle fleet decarbonisation

  Fleet petrol and diesel (including 5% biofuel blends, pure diesel, LPG, CNG) used in company-owned and leased vehicles are reported as Scope 1. Claimed mileage from company vehicles is captured; mileage in privately owned vehicles falls to Scope 3.

• Purchased electricity for own estate and project sites

  Scope 2 covers grid electricity for offices, depots, workshops and temporary project sites, including electricity provided free of charge by clients on construction sites. From 2020 both location-based (DEFRA/IEA factors) and market-based (contractual instruments) methodologies are reported.

• Supply chain integrity and Scope 3 reduction

  SBTi-validated target to reduce Scope 3 purchased goods and services emissions by 25% by 2030 vs 2020 baseline. The Group's Responsible Sourcing team has worked with Materials Engineering to develop carbon and steel decarbonisation roadmaps to 2030. Internal Concrete Knowledge course launched with training on low-carbon concrete. 187 supply chain modern slavery audits completed in 2024.

• Low-carbon materials — EcoSheetPiles & embodied carbon

  Used EcoSheetPiles on the Nuneham viaduct restoration scheme: Electric Arc Furnace technology, 370kg CO2e per tonne (84% reduction vs traditional), 100% recycled content, manufactured with 100% renewable electricity, delivering 30% project emissions saving. Developing software using invoice data to provide embodied carbon benchmarks across products and services.

• Infrastructure Investments low-carbon design & retrofit

  For the Infrastructure Investments business, working closely with customers to integrate low-carbon requirements at design stage and retrofit existing assets with low-carbon solutions. For joint ventures and operations without direct operational control, sharing best practice with partners to drive adoption of low-carbon innovations.

• Supply chain decarbonisation — purchased goods & services

  Purchased goods and services represented 83% of Scope 3 in 2024, with 81% coming from ~10% of suppliers; 50 of these top suppliers have already set SBTs to reduce emissions 30% by 2030. Focus areas: training procurement teams on carbon, sustainability heatmap tool covering 13 risk/opportunity areas, Cement 2 Zero trial (world's first zero-emissions cement at industrial scale), Concrete Knowledge course and a 50-steel-supplier decarbonisation survey.

• Decarbonising carbon-intensive materials (cement and steel)

  Two materials with the highest carbon intensities — concrete and steel — represent a key focus for the 25% Scope 3 purchased goods reduction target by 2030. The Group signed an agreement with Versarien to develop low-carbon, graphene-infused 3D-printable mortars using Cementene admixture. In 2024 it surveyed 50+ steel suppliers; a significant portion are adopting Electric Arc Furnace (EAF) technology which reduces carbon intensity by 80% vs blast furnace. EcoSheetPiles deployed on the Nuneham embankment project produced 370kg CO2e/tonne vs typical 2.3 tCO2e for traditional steel.

• Customer & design team early engagement for low-carbon design

  Working with Strategic Design Partners (Jacobs, AtkinsRéalis, Mott MacDonald) and customers from outset to embed low-carbon solutions at design stage. Lesson from Royal Botanic Garden Edinburgh 'Towards a Zero Carbon Construction Site' initiative: early decision-making is vital to reducing emissions across design, construction, operation and decommissioning.

• Infrastructure Investments portfolio low-carbon retrofit

  For Infrastructure Investments business assets, collaborating with customers to incorporate low-carbon requirements at design stage and retrofit low-carbon solutions to existing assets. For joint ventures and operations without direct operational control, sharing best practice with partners to drive low-carbon innovation adoption.

• Supplier engagement for low-carbon purchased goods & services (Scope 3 Cat 1)

  Purchased goods and services represent 86% of the Group's Scope 3 emissions and are the largest single decarb lever. Strategy is to engage with key product categories (steel, concrete, cement, aggregates) to obtain primary embodied-carbon data, encourage supplier target setting, collaborate on innovation and source from low-carbon suppliers. The Group co-funded research with the Supply Chain Sustainability School to address data maturity gaps and undertook tender exercises with 40% sustainability weighting for waste contracts. Customer/client engagement on low-carbon project design is also identified as a near-term lever.

• Decarbonising Infrastructure Investments portfolio (Scope 3 Cat 15)

  Cat 15 Investments emissions (342,628 tCO2e in 2023) are dominated by Gammon (Hong Kong JV) and US military housing assets. Strategy is to engage closely with Jardine Matheson (Gammon JV partner - which itself has a SBTi-validated 1.5°C near-term target as the first Greater China construction company) and other JV partners to track progress and collaborate on decarbonisation measures. Investment activities target opportunities aligned with the energy transition, including the new Urban Fox EV charging JV (formed March 2023), nascent UK energy transition assets, and OFTO concessions.

• Supply chain decarbonisation of purchased goods (concrete, steel, aggregates)

  Purchased goods and services represent 86% of Scope 3 emissions. Hard-to-decarbonise products like concrete, steel and aggregates targeted via 25% reduction by 2030. Procurement teams trained on carbon, sustainability heatmap tool covering 13 risk areas guides supplier selection. Initiatives include Cement 2 Zero (trial of world's first zero emissions cement at industrial scale). In 2023, 34% of Scope 3 emissions came from suppliers with set or committed SBTs.

• Scope 3 Category 15 (Investments) — JV emissions

  Direct emissions from equity investments, incorporated JVs and joint operations where the Group lacks considerable influence are accounted for as proportional emissions in Scope 3 Category 15 (Investments) in line with ownership interests. Reassessment in 2023 moved certain UK/US JVs from operational control to Cat 15.

• Subcontractor and supply-chain emissions

  Construction, demolition and excavation waste managed by both directly employed and subcontractor supply chains. Subcontractor fuel use (butane, propane) is reported under Scope 3, not Scope 1. Purchased Goods & Services (Cat 1) and Upstream Transportation (Cat 4) capture cradle-to-gate emissions from tier 1 suppliers.

• Carbon literacy training and green skills

  Group rolling out UK-wide Carbon Conscious Education programme. Executive Committee received Carbon Literacy training in 2022. Each SBU produced carbon action plan in 2022. Gammon launched Carbon Essential and Science-based Target course for project managers, with 250+ attending. Working with partners to ensure training qualifications reflect carbon-related knowledge.

• Supply chain decarbonisation through Supply Chain Sustainability School

  Group partnered with Supply Chain Sustainability School for second year on supply chain decarbonisation survey ('Greening the Supply Chain'). Survey found 68% of respondents said sector not well enough prepared for net zero, 53% said low-carbon materials pipeline insufficient, 81% said construction practices changing too slowly. 96% report shortfall in skilled people for carbon/sustainability roles. Group provides supply chain training (5,302 hours, 14,000+ e-learning modules in 2022).

• Purchased goods and services (embodied carbon)

  Scope 3 reporting focuses on the top five largest sources of embodied carbon in purchased materials such as sheet steel, cement, aggregate, asphalt and rebar. Responsible sourcing schemes (FSC/PEFC for timber, sector-specific schemes for other materials) underpin supply chain engagement.

• Site-derived waste and resource efficiency

  Construction, excavation, demolition, office and manufacturing/depot waste are tracked by weight, split between landfill and waste avoided (reused, recycled or recovered). Aligned with the EU Waste Framework Directive and WRAP protocol.

• Employee business travel

  Scope 3 business travel captures flights, train, ferry, coach journeys and claimed mileage in privately owned vehicles. Although not the largest Scope 3 source, data is captured because it is increasingly available and directly linked to operating costs.