IEMA GHG PROJECT

Balfour Beatty Case Study

Introduction

The growing low carbon economy has presented Balfour Beatty with a multi-billion pound market opportunity. They are using their expertise to help their customers achieve their carbon reduction goals, whilst also playing their part in reducing their own emissions. They have reduced their global carbon footprint by 8% since 2005, relative to revenue and by 16% relative to revenue in the UK over the last two years.

Reporting on their GHG emissions has made them want to become a low carbon leader, and they have therefore set a global target of reducing their carbon emissions by 10% by 2012, increasing to a 50% reduction by 2020 against a 2010 baseline.

Balfour Beatty (www.balfourbeatty.com) is an infrastructure group operating in professional services, construction services, support services and infrastructure investments. They work in partnership with their customers principally in the UK, continental Europe, the US, South-East Asia, Australia and the Middle East, who value the highest levels of quality, safety and technical expertise.

Key infrastructure markets include transportation (roads, rail and airports); social infrastructure (education, specialist healthcare, and various types of accommodation); utilities (water, gas and power transmission and generation) and commercial (offices, leisure and retail). The Group delivers services essential to the development, creation and care of these infrastructure assets including project design, financing and management, engineering and construction, and facilities management services. Balfour Beatty employs 50,000 people around the world. Methods for reducing Balfour Beatty’s GHG emissions

Balfour Beatty’s carbon footprint is dominated by emissions from mobile plant and its company vehicle fleet. Relative to revenue, its 2009 global CO2 emissions were 34.8 tonnes/£m, an 8% reduction from the 2008 figure of 38 tonnes/£m. In the UK, they have achieved reductions of 16% over the past 2 years. Reducing GHG emissions features strongly in their 2020 sustainability vision and roadmap, developed by their Sustainability Working Group led by Mike Peasland, CEO - Construction Services UK.

Data collection methods

Data collection is carried out using an online reporting system. They measure and report their GHG emissions in line with the 2009 guidance produced by DEFRA/DECC and the internationally recognised GHG Protocol covering their:

• Direct emissions (termed Scope 1) from their buildings and vehicles (including fluorinated gases) • Indirect emissions from electricity use (Scope 2) • Limited (Scope 3) indirect emissions from employee business travel using non-company owned vehicles as well as flights

Key actions for reducing their GHG emissions

With the advent of the UK's CRC Energy Efficiency Scheme, their Group Finance Director has assumed Board level responsibility for carbon. A project team has been established to prepare for the introduction of CRC, with their facilities management business, Balfour Beatty Workplace, responsbile for developing and mainatining a Group-wide compliance solution.

Achieiving carbon reductions is devolved to their operating companies. Examples of approaches implemented over the last year include:

• Expansion and use of videoconferencing facilities • Developing and implementing green travel plans (such as car sharing, greater use of public transport and cycling to work) • Raising staff awareness of energy saving at home and in the workplace • Training in fuel efficient driving such as the Safe and Fuel Efficient Driving (SaFED) courses run by their Plant and Fleet business and the use of in-vehicle telemetry to give real time feedback to their drivers on their driving style and fuel consumption• Better monitoring of energy consumption through use of sub-metering in their offices and depots • Introducing lower carbon vehicles (such as electric powered cars for use on military bases by their investments business in the US) • Upgrading to more energy efficient plant, equipment and improved building controls e.g. their Eco-lootion site accommodation cabins deliver an 80% reduction in CO2 emissions compared to conventional units.

Their UK investments business, Balfour Beatty Capital, has been particularly successful in reducing the carbon footprint associated with business travel. Promoting video-conferencing and switching from air to rail travel saved over 800 tonnes of carbon, a reduction of more than 50% in travel related emissions in 2009 compared to 2008.

Lessons learnt and overall benefits

Whilst managing their own Scope 1 and 2 emissions has been important, Balfour Beatty consider they have a much greater opprtunity to deliver larger reductions in carbon through scope 3 emissions. For example, on their A421 road scheme near Bedford, they used the Highways Agency carbon calculator to establish the project's carbon footprint. Scope 3 emissions accounted for 94% of the project's total footprint. They aim to save 50,000 tonnes of carbon from this one major project through design changes and material substitution. This is a significant reduction when compared to their total global footprint (Scope 1 and 2) of 383,000 tonnes of CO2. They have used 400,000 car tyres and 375,000 tonnes of pulversied fuel ash for lightweight fill and achieved a 60% recycled content in their use of aggregates to achieve these reductions. The use of car tyres in this way avoided the need to import a specialist lightweight clay aggregate from Denmark.

In order to help embed sustainability into their operations, they have created a network of CRC champions, taken in the main from their finance teams, as opposed to environmental staff.

Their rationale being to expose finance to capital and investment decisions for energy management, forecasting and carbon trading.

Plans for the future

Balfour Beatty have set a 10% relative reduction target by 2012, increasing to a 50% reduction by 2020 against a 2010 baseline.

Furthermore, they will continue to develop their understanding of Scope 3 emissions - particularly embodied energy in materials and the positive improvements they can make through design changes and material substitution.

In 2010 they launched Project GrACE - a major UK-wide supply chain management programme. Through Project GrACE they will focus on carbon measurement and reduction in their supply chain as they see this as a significant opportunity to cut their GHG emissions.

Jonathan Garrett, Group Head of Sustainability, Balfour Beatty

Jonathan Garrett has over 20 years’ experience in corporate environmental management and sustainability. He joined Balfour Beatty in 2008 as Group Head of Environment. He provided a leading role in the development and launch of Balfour Beatty’s 2020 sustainability vision and roadmap for its global operations. He helped establish the group’s implementation team for the UK’s Carbon Reduction Commitment Energy Efficiency Scheme. In October 2010, he was appointed Group Head of Sustainability, tasked with helping turn the 2020 vision into reality.

Prior to Balfour Beatty, he was Head of Corporate Responsibility at Brett Group, an aggregates and building materials supplier. Jonathan was previously Health, Safety and Environment Director at Premier Foods plc, the UK’s largest food producer, employing over 20,000 people across 60 major sites. Prior to this, he led a major restructuring of the central HS&E function at RHM plc, before its merger with Premier Foods in early 2007. Before entering the food industry, Jonathan spent 7 years as Environment, Health and Safety Director at Smiths Group plc, the global engineering and technology company. He began his career with 10 years as an environmental consultant.

He is a Non-Executive Director at IEMA and been a full member since 1997, a full membership assessor and mentor.