At Digital Construction Week 2025, Michael Heron, ESG Lead at Gilbert-Ash, and Andy Fulterer, Owner at Fulterer Consulting, joined SustainIQ Co-Founder Liam McEvoy to discuss the complexities of measuring, monitoring, and reporting on Scope 3 emissions in the supply chain.
Environmental, social, and governance (ESG) has become an essential part of how construction companies must operate. Regulatory pressures, a global shift towards net zero, increased competition, and changing stakeholder expectations mean that ESG is no longer simply a “nice to have”; it is critical to managing risk, reducing operational costs, and winning work.
The UK Environmental Audit Committee estimates that construction and the built environment account for 25% of the total carbon footprint. As such, organisations operating within the sector play a critical role in achieving national emission reduction targets.
For many companies, especially those in the construction sector, Scope 3 greenhouse gas (GHG) emissions can represent the largest share of their carbon footprint. Suppliers and the supply chain, therefore, are central in the race towards net zero.
Engaging your supply chain is not without its challenges
Carbon reduction initiatives have introduced a completely new vocabulary into the sector, and many organisations within the supply chain are being asked to absorb complex and unfamiliar information at pace.
Moreover, suppliers are often unaware of what is required of them and may lack an understanding of essential ESG principles such as carbon literacy and the importance of reporting Scope 3 emissions.
Resource constraints also present a significant challenge. Suppliers, especially small and medium-sized enterprises (SMEs), often lack the resources and expertise to effectively measure and report their emissions, requiring additional support and training.
Organisations working with vast and complex supply chains may struggle to acquire the required information in a timely and consistent manner. Variations in data quality and reporting standards among suppliers can lead to inconsistent and unreliable data. This complicates the calculation and verification of Scope 3 emissions.
The absence of standardised methods for calculating and reporting Scope 3 emissions can result in discrepancies and hinder the comparability of data across the supply chain.
Despite these challenges, there’s a clear path forward
Education and engagement are critical to developing carbon literacy. Main contractors must invest in providing their supply chain partners with training and educational resources to ensure that they not only understand what is required of them, but also why it is important.
At Gilbert-Ash, they hosted a series of webinars and training sessions outlining the data required, the preferred format, the method of submission (SustainIQ), and the frequency of reporting. Additionally, they began requesting Environmental Product Declarations (EPDs) to calculate the embodied carbon of products and materials, which is a BREEAM requirement.
Patience also plays a big part. While educational resources are essential, it will take time for suppliers and subcontractors to understand what processes and workflows they need to implement in their own businesses in order to provide the information required.
Organisations should also understand that ESG reporting is a continuous process, and achieving everything at once simply isn’t possible. In the case of Gilbert-Ash, they recognised that they couldn’t approach their entire supply chain in one go. Instead, they began by identifying their top 50 subcontractors and suppliers.
Technology is key to simplifying ESG reporting
Technology can play a vital role in optimising how organisations collect, measure, monitor, and report on Scope 3 GHG emissions. For example, a centralised reporting platform that integrates with third-party hardware or software can be used to automatically capture emissions data from various processes and equipment within the supply chain.
At Gilbert-Ash, they invested in SustainIQ to streamline the entire ESG reporting process and to make it easy for their suppliers to provide the required information.
Above all else, be clear and concise about what it is you’re asking for from your suppliers.
Looking ahead
It is clear that ESG is here to stay. Investors, customers, and regulators are demanding greater accountability in emissions reporting, and organisations must be prepared to adapt their commercial objectives in line with changing stakeholder demands.
Effectively reporting on Scope 3 emissions is one of the most pressing challenges facing the construction industry. Earlier this year, the UK government published the Procurement Act 2023, which placed a greater focus on social value and strengthened the role that ESG plays in the award of public contracts.
It is therefore clear that organisations committed to investing in the education of their supply chain today will undoubtedly reap the benefits tomorrow.