Balfour Beatty · Physical Exposure and Transition

Concrete + steel are the two heaviest contributors to embodied carbon. Decarbonisation pace of these sectors caps how fast contractors can cut project-level S3.

Purchased goods and services — dominated by concrete, steel, cement, aggregates and rebar — account for 83-86% of Balfour Beatty's Scope 3 emissions [E1][E4][E5], making cement and steel supply chains the single largest lever in the Group's carbon footprint. This concentration is acute: roughly 10% of suppliers generate 81% of that Scope 3 purchased-goods footprint [E5], so decarbonisation pace is effectively capped by how fast a small number of concrete and steel suppliers can shift production methods.

Balfour Beatty has an SBTi-validated target to cut Scope 3 purchased goods and services emissions 25% by 2030 vs a 2020 baseline, with concrete and steel named as the two highest carbon-intensity materials targeted [E3][E6]. Concrete measures include the Cement 2 Zero trial of zero-emissions cement at industrial scale, an internal Concrete Knowledge training course, and a partnership with Versarien on graphene-infused low-carbon 3D-printable mortars [E3][E4][E5]. On steel, the Group surveyed 50+ suppliers on Electric Arc Furnace adoption (up to 80-84% carbon intensity reduction vs blast furnace) and deployed EAF-produced EcoSheetPiles on the Nuneham viaduct, cutting that project's emissions by 30% [E3][E8]; supporting this, 34% of Scope 3 emissions in 2023 came from suppliers with set or committed science-based targets, rising to 50 top suppliers with SBTs by 2024 [E4][E5].

Aggregates, copper, aluminium, rare earths for finishings. Mining S1+2 caps upstream Scope 3.

Sector-generic framing shown above — company-specific exposure narrative pending.

Operational performance of completed buildings depends on tenant fit-out + grid mix in the country of construction. Contractors have indirect leverage.

Sector-generic framing shown above — company-specific exposure narrative pending.

Excavators, generators, delivery fleet — direct Scope 1 that a contractor can move most quickly. HVO + battery-electric plant availability sets the timeline.

Plant, fleet and generators account for 92% of Balfour Beatty's combined Scope 1 and 2 emissions, with diesel-fuelled excavators, cranes, generators and mobile plant the dominant source and Scope 1 representing 91% of that total [E4][E3]. Fuel is captured across stationary and mobile combustion categories including gas oil (red diesel) for excavators, cranes and generators, plus vehicle fleet fuel including petrol, diesel and LPG/CNG blends [E2][E5]. Subcontractor fuel use sits in Scope 3 rather than Scope 1, meaning the company's direct-lever exposure is concentrated in its own directly-employed plant and vehicle operations [E6].

Balfour Beatty runs a three-pronged plant and fleet decarbonisation approach of efficiency, electrification and alternative fuels, backed by an Energy Management Unit that mandates low-energy assets via its Power Profiler tool and has deployed 60+ battery storage units to off-grid sites [E1][E4]. It is trialling hydrogen fuel cell and hydrogen ICE generators, hydrogen-hybrid highways vehicles, and a dual-fuel hydrogen retrofit on the M77 project, alongside a hydrogen generator pilot at the A63 that displaced a 100kVA diesel unit and saved 59,000 litres of diesel and 164 tCO2e annually [E1][E8]. On fuels, the company has settled on Syntech biofuel — a UK waste-cooking-oil-derived drop-in diesel replacement cutting emissions 80-90% versus diesel — over HVO after a co-funded deep dive, and uses tools like EcoNet and EcoSense cabins (600+ deployed) plus the Site Energy Efficiency Dashboard (SEED) to cut site energy use, with EcoNet+EcoSense expected to save 4,000-5,000 tCO2e annually across UK projects [E7][E8][E4]. This work sits under the SBTi-validated commitment to cut Scope 1+2 emissions 42% by 2030 and 90% by 2050 from a 2020 baseline.

Long tail of subcontractors + material suppliers carries most of the project embodied Scope 3. Credibility of tier-1 vendor targets determines pass-through.

Purchased goods and services — dominated by steel, concrete, cement and aggregates — make up 83-86% of Balfour Beatty's Scope 3 footprint, making tier-1 material suppliers the single largest lever in the Group's carbon profile [E1][E4][E5]. Roughly 81% of this category's emissions are concentrated in about 10% of suppliers, so a small number of vendor relationships determine most of the embodied-carbon outcome on projects [E5]. Subcontractor fuel use and upstream transportation are also captured under Scope 3 rather than Scope 1, reinforcing how much of the footprint sits outside the Group's own operational boundary [E2].

Balfour Beatty runs a targeted supplier engagement programme on its highest-impact categories, training procurement teams on carbon, using a sustainability heatmap covering 13 risk areas to guide supplier selection, and pursuing innovation trials such as Cement 2 Zero (a zero-emissions cement at industrial scale) and a 50-supplier steel decarbonisation survey [E4][E5]. It has set a Scope 3 near-term target of a 25% reduction in purchased goods and services and investments by 2030 against a 2020 baseline, alongside a long-term 90% absolute Scope 3 reduction by 2050 (SBTi-aligned, structured targets). Progress is tracked via supplier SBT adoption — 50 of the top suppliers had committed to 30% reductions by 2030 as of 2024 — and via multi-year collaboration with the Supply Chain Sustainability School, including joint research on data maturity and sector-wide "Greening the Supply Chain" surveys and training [E1][E5][E6].