KPI METHODOLOGY DOCUMENT

Transcription

1 KPI METHODOLOGY DOCUMENT 2018 Barratt Developments PLC

2 Barratt Developments is the nation s largest housebuilder, creating great new places to live throughout Britain. Our business is acquiring land, obtaining planning consents and building the highest quality homes in places people aspire to live. This is supported by our expertise in land, design, construction and sales and marketing. Our vision is to lead the future of housebuilding by putting customers at the heart of everything we do. Our ambition is to maintain an enhanced reputation as the nation s leading sustainable housebuilder. We measure our performance against core sustainability benchmarks and ongoing performance improvement against the issues that matter most. Barratt Developments PLC

3 Contents 1. Introduction Scope Reporting Guidelines Conversions to kwh Scope 1 and 2 Carbon Footprint Emission Factors Intensity Metrics Scope 2 (electricity) reporting Scope 3 Carbon Footprint Business Travel Data Collation Process Barratt Developments PLC

4 1. Introduction This report summarises the reporting methodology of Barratt Developments PLC (The Group s) Corporate Sustainability Questionnaire (CSQ) Key Performance Indicator (KPI) analysis for the eleventh annual reporting period beginning 1st July 2017 and ending 30th June Scope The Group s Trends summary and Insight reports cover all of Barratt Development PLC offices and house building operations 1. Data is sourced from The Group s operations in England, Scotland and Wales. Note: The Group offices include the Bedrooms (previously BD Living), offices and the Bedrooms manufacturing operation. The current structure consists of a combination of Barratt Homes (BH) and David Wilson Homes (DWH) branded divisions as well as some dual branded divisions (the Ward Homes brand, is part of Barratt Kent). The divisions are grouped into the regions of Scotland, Northern, Central, East, West, Southern and London. Supporting this, The Group also has a number of Group offices. Site data for Wilson Bowden Developments (WBD) is collected through the CSQ though energy, carbon, site water data and construction area data is not included in reconciliations, summary and insights reports or the Group s public reporting. WBD s commercial operations as a main contractor currently do not align with the domestic house building scope of the 2018 CSQ and so some questions are not applicable to WBD. WBD have completed the 2018 CSQ as far as practicable. The Wilson Bowden Developments return does not include data relating to completed developments that it actively manages. 3. Reporting Guidelines The Group has developed and tailored its list of KPIs and PIs in line with its material issues, business reporting requirements, Corporate Sustainability indexes/surveys and the latest UK guidelines including: The Greenhouse Gas (GHG) Protocol (WRI, WBCSD) UK Governments Environmental Reporting Guidelines: including mandatory greenhouse gas emissions reporting guidance June 2013 Carbon Disclosure Project FTSE4Good The Group s core sustainability KPIs 1 The Group offices include BD Living, offices, warehouse and furniture manufacturing operation. The current structure consists of a combination of Barratt Homes (BH) and David Wilson Homes (DWH), Barratt London branded divisions as well as some dual branded divisions (the Ward Homes brand, is part of Barratt Kent). The divisions are grouped into the regions of Scotland, Northern, Central, East, West, Southern and London. Supporting this, The Group also has a number of Group offices. Barratt Developments PLC

5 NextGeneration benchmark Energy Savings Opportunities Scheme (ESOS) Code for Sustainable Homes 4. Conversions to kwh To allow all the energy consumed to be converted into a consistent metric (i.e. kwh), published and known conversion factors were used and certain assumptions were made. This section provides details on the assumptions employed. In some instances, the conversion of the fuel to carbon and back to other energy units was necessary. TABLE 1 CONVERSIONS REQUIRED Data Reported as Conversion Needed Electricity and Natural Gas kwh None Other Energy Sources e.g. diesel, LPG, etc. Business Mileage and owned fleet litres, km etc. km tco 2e then kwh tco 2e then kwh using assumptions in table 2 TABLE 2 ASSUMED FUEL TYPES FOR CONVERSION TO KWH Transport Car Van Air Travel Rail Assumed Fuel Petrol (Average Biofuel Blend) Diesel (Average Biodiesel Blend) Aviation Turbine Fuel 40% electric and 60% diesel (100% mineral) based on current rolling stock data in the UK. 5. Scope 1 and 2 Carbon Footprint With the exception of FY12 reporting (which was made up of business travel data only), The Group s carbon footprint data is made up of the sum of: energy used in offices (electricity, natural gas and biomass) refrigerant losses transport (business travel by private and leased cars, business travel by company-owned and leased vans) air travel (both domestic and international) rail travel energy used in the construction and sales process (diesel, electricity, natural gas and LPG) Barratt Developments PLC

6 In FY18, the amount of biomass used to fuel the biomass boiler at the BD Living location was not recorded. To estimate the amount of woodchips used to fuel the boiler, it was assumed that the waste reduction on-site had been due to the waste wood chips being used for the boiler and that therefore the waste reduction amount on site can be used as a proxy for biomass used to fuel the boiler in FY18. This is likely to result in an overestimate of emissions from biomass, as not all of the waste may have been used to fuel the boiler 5.1 Emission Factors The Group follows the latest UK Government s Environmental Reporting Guidelines: including mandatory greenhouse gas emissions reporting guidance (dated June 2013) and has used the greenhouse gas (GHG) emission factors outlined in the DEFRA UK Government conversion factors for Company Reporting, Version 1 (August 2017), for current FY GHG emissions. These factors from 2017 have been used despite more recent figures being available to keep reporting in line with previous and future years as the release date of the DEFRA emission factors varies from year to year. The range of emission sources have a number of greenhouse gas emissions associated with them, and each have different levels of impact on global warming (referred to as Global Warming Potential, GWP). As such, to get a meaningful comparison between the GHG emissions, conversion factors are used to convert the quantities consumed into tonnes of carbon dioxide equivalent (CO 2e). CO 2e is a measure for describing the impact of each different GHG in terms of the amount of carbon dioxide that would create the same amount of global warming. TABLE 3 EMISSION FACTORS Emission Source Reported as Emission Factor Electricity kwh UK Electricity DEFRA emission factor for reporting year Electricity T&D losses kwh UK Electricity T&D DEFRA emission factor for reporting year Natural Gas kwh Natural Gas DEFRA emission factor for reporting year LPG Litres LPG DEFRA emission factor for reporting year Diesel used on construction sites Litres Diesel (100% mineral diesel) DEFRA emission factor for reporting year has been used because it has been assumed all diesel consumed on construction sites is not gas oil (red diesel) Refrigerant (R407C) kg R407C DEFRA emission factor for reporting year Refrigerant (R410A) kg R410A DEFRA emission factor for reporting year Biomass Vans (Company owned and leased) Leased and private cars tonnes Kilometres Passenger. Kilometres Biomass - Wood chips DEFRA emission factor for reporting year Vans - Average (up to 3.5 tonnes) - Unknown fuel type DEFRA emission factor for reporting year Average car - Unknown fuel type DEFRA emission factor for reporting year Barratt Developments PLC

7 Rail travel Air Travel - Domestic Air Travel - International Passenger. Kilometres Passenger. Kilometres Passenger. Kilometres National Rail DEFRA emission factor for reporting year Domestic, to/from UK - without RF emission factor for reporting period International, to/from non-uk Average passenger - without RF emission factor for reporting period For company-owned and leased vans, the Average van (up to 3.5 tonnes) / Diesel fuel kgco2e emission factor has been used to determine associated GHG emissions. For fuel used in vehicles, The Group has elected not to quantify the fuel purchased. This data are considered too onerous for The Group to collect in the current reporting systems. 5.2 Intensity Metrics The carbon footprint is reported in tonnes of carbon dioxide equivalents (CO 2e). The Group presents normalised GHG data as kgco 2e per 1,000 ft2, which is used as the metric for the Group level target. These intensity measurements per KPIs are presented as: the sum of construction (site) Scope 1 and Scope 2 CO2e emissions divided by the amount of legally completed floor space; the sum of both office and site Scope 1 and Scope 2 CO2e emissions divided by the amount of legally completed floor space; the group level sum of Scope 1, Scope 2 and Scope 3 CO2e emissions divided by the amount of legally completed floor space. 5.3 Scope 2 (electricity) reporting The Greenhouse Gas (GHG) Protocol, produced by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), is the most widely used accounting tool for GHG emissions. Its A Corporate Accounting and Reporting Standard is used by businesses and governments around the world. As of 20th January 2015, there have been changes to the standard regarding the accounting of GHG emissions from Scope 2 electricity. Companies should now report two Scope 2 electricity emission figures, one on a location-based method and another on a market-based method. The location-based method reflects the average emissions intensity of macro-scale (regional/national) electricity grids where energy consumption occurs. Companies should use the regional/national gridaverage emission factor. In the UK, this would be sourced from the Defra/DECC UK Government conversion factors for Company Reporting. The market-based method reflects the emissions from the electricity that a company is purchasing. Energy suppliers in the EU are already required, by law, to disclose to consumers the fuel mix and GHG Barratt Developments PLC

8 emissions associated with their portfolio or tariffs. As such, companies intending to report a marketbased Scope 2 electricity emissions figure should: Request the emission factor for their tariff(s) from their energy supplier(s). Request the source of this data (e.g. generator declarations in the UK). Request the energy generation technologies and mix specific to the supplier / tariff(s). A comparison between the location-based and market-based reporting method is outlined below. Location-based method: All electricity consumption by The Group occurred in the UK is multiplied by the UK average grid electricity emission factor for the reporting year to calculate the emissions. Market-based method: Renewable electricity: For purchased electricity to be considered as being generated by renewable source under the market-based method (e.g., wind, solar, hydro), this electricity must be matched to Renewable Energy Guarantee of Origin (REGO) certificates. REGOs must be recognised by Ofgem. One REGO is matched to 1 MWh of electricity, and a REGO is only valid for the reporting year (1st April to 31st March) during which it was issued. If The Group purchases an electricity tariff which is 100% renewable, all electricity purchased must be backed by REGOs. Renewable Origin Certificates (ROCs) and Levy Exemption Certificates (LECs) serve different roles and cannot be used as evidence that a tariff is from renewable sources. Certain suppliers may provide the ID numbers of REGOs allocated to each client s supply, while others do not. Self-generated Renewable electricity: Barratt currently do not generate any renewable electricity. Non-renewable electricity: The choice of which emission factor to employ for non-renewable electricity will depend on whether a tariff-specific emission factor is available and whether the supplier sells tariffs which vary with regards to their emission factors. Offices: All office electricity consumption was supplied to The Group offices by a single supplier, SSE who state that their current residual energy mix is 9% coal, 60% natural gas,67% nuclear, 22% renewable and 43% other. The residual emission factor given by SSE for this mix is kgco 2/kWh. Sites: For development sites, electricity is provided by British Gas and some residual supplies from Eon who were the previous group energy supplier. For FY18, The Group have obtained consumption data from Eon and assumed that the remaining electricity from the data collected through The Group s Corporate Sustainability Questionnaire, is obtained from British Gas. Barratt Developments PLC

9 Eon state that their 2018 energy mix is 12.3% coal, 37.6% natural gas, 10.3% nuclear, 35.8% renewable and 4% other. The residual emission factor given by Eon for this mix is kgco 2/kWh. British Gas state that their current energy mix is 12% coal, 35% natural gas, 9% nuclear, 40% renewable and 4% other. The residual emission factor given by Eon for this mix is kgco 2/kWh. This highlights the value of providing the market-based emission factor as it proves the impact that choices made with regards to energy supplier and/or tariff have on the emissions from these sites. The fact that the emissions calculated through the market-based method are lower than those calculated through the location-based method means that The Group s choice of supplier and the fuel mix it uses to generate the power that The Group receives is less carbon-intensive than the UK-average. Note that the above calculations do not take into account any variations in emission factors for different tariffs e.g. tariffs for temporary building supplies to site compounds may differ from those for show homes/landlord supplies from a particular supplier and uses the fuel mix and emission factors that are currently available. In addition it is understood that The Group are undertaking further analysis to understand the differences between the electricity consumption provided by the suppliers and the CSQ returns. This could affect the proportion between different suppliers and therefore affect the above calculations. 6. Scope 3 Carbon Footprint Out of the 15 scope 3 categories The Group currently only calculates the emissions from business travel. 6.1 Business Travel Car, van, rail and flight emissions data has been calculated using the latest UK Government (DEFRA/DECC) conversion factors for distance travelled in kilometres (km). Air travel emissions were also split by domestic (UK) and international flights. For business travel by car, the Average Car / Unknown fuel kgco 2e emission factor has been used to determine associated GHG emissions, as data on the size of the cars and engine fuel types is not available. For business travel by rail, the National Rail conversion factor has been used and for business travel by air, the UK domestic flights and the International flights conversion factor (excluding radiative forcing emissions) have been used. All conversion factors are representative of typical transport methods used by The Group employees when undertaking business travel. Barratt Developments PLC

10 7. Data Collation Process The following is the CSQ KPI data management methodology The Group employs: The CSQ includes data requests for live data in the reporting period and is split into office questions (which cover office Section 106 contributions, spend on physical works, energy use, water use, waste streams and transport questions) and site questions (which cover all the reporting requirements for live development sites). The CSQ is reviewed annually and updated where necessary. The CSQ includes guidance to each question provided as separate sheets within the CSQ workbook. This year s CSQ was ed by the Chief Financial Officer to all Regional and Group offices under a Group Memo. The Completion Schedule indicates which offices are to be included in each return and which worksheets within the questionnaire each office has to complete. The memo also includes detailed instructions for the completion and return of CSQ to Group by a stated deadline date (Refer to copy of SR Group Memo). An example of the typical data timescales for FY18 are as follows: Data CSQ sent out with guidance (5th February 2018) Completed questionnaires returned (9th July 2018) Data verification completed (27 th August 2018) Data analysis and report produced (3 rd August 2018) Annual Integrated Report made public (5th September 2018) CSQ are completed electronically by each location and returned by to CSQ@barrattplc.co.uk Divisions report energy data based on invoices/statements, meter readings, estimates or other method and are required to report on the data source. Divisions are asked to pro rata the data to the reporting period in relation to any source that spans across the beginning or end of a reporting period. In addition, data in the completed questionnaire should be reviewed by the Finance Director on behalf of the Divisional Management Board An initial review is conducted by the Group Corporate Sustainability Co-ordinator and any questionnaires found to have incomplete or inaccurate entries are returned for completion. Blank entry returns (energy entries in the questionnaires that are zero) mean that verification is undertaken by the Corporate Sustainability Co-ordinator. The Group Finance Assistant Accountant at The Group conducts a more detailed check. The Group Finance Assistant Accountant carries out the collation of the data into both Office and Site Masters. Once collated, these files are forwarded on to the Carbon Trust for analysis/sense checking. The Carbon Trust then analyses the data on a Divisional, Regional and Group basis to produce the overall Group KPI and PI results. Data is sense checked and audited for any anomalies Barratt Developments PLC

11 A high-level Trends and a detailed Insight report is then produced by the Carbon Trust. Selected Group data are then externally verified by an independent party and an assurance statement is provided. Selected data from the Sustainability KPI Summary for Barratt report is then included in the latest annual integrated report and uploaded to relevant datasheets on the sustainability pages of the PLC website. A signed copy of the assurance statement is also uploaded onto the PLC website. Barratt Developments PLC