Sep 6, 2023

We must work with our investors to develop a shared carbon journey to make meaningful change

Following our carbon footprint work with Bromford and engagement with their finance contacts, we produced an article for Social Housing Magazine [1].  The article was co-written by Imran Mubeen, Director of Treasury at Bromford and Richard Lupo, Managing Director at SHIFT Environment.  Here’s what we wrote:

We are living in an era defined by heightened environmental consciousness and a pressing need for sustainable living. As fires ravage the mainland of Europe and as other parts of the world drown in floods or starve through droughts of Biblical proportions, there has never been a more important time us all to consider our impact on our environment through our carbon emissions.

As a large developer housing association with over 46,000 homes, a fleet of over 200 vehicles, and four different office locations, Bromford recognise that our built environment significantly contributes to these emissions, and we therefore play a pivotal role in shaping the trajectory of climate change.

But how do we measure our carbon footprint? How do we establish our “baseline” emissions? Which methodologies should we employ? How do we ensure consistency across our sector in what we capture? How do we accommodate changes to the national grid? What about the policy landscape? Are we ready to set targets to reduce our emissions over time?  And how do we drive all of this so we create behaviours and actions which deliver meaningful change that enhances customer experience?

As we contend with the weight of these questions, we face into a funder community that is also driven by increased visibility and interrogation of the carbon emissions associated with their investment portfolios. Carbon reporting, quite rightly, takes centre stage at investor roadshows and the level of information now sought by our funding partners is greater than ever.

In a bid to synthesise our carbon journey with our funders and investors so it remains Bromford-led but funder-challenged, we ran a series of workshops this summer with Newbridge Advisers LLP for our key stakeholders in the banking and capital markets. Our key partners included Lloyds, Barclays, ABN AMRO, HSBC, LGIM, Abrdn and Rothesay.

The focus of these workshops was our Scope 1,2 & 3 emissions which SHIFT Environment had analysed. This blog sets out the key areas of focus for funders and investors, and the questions that our dialogue has raised which will inform our future work.

The workshops started with an overview of the methodology and where Bromford are focussing their primary efforts to reduce the group’s footprint.

Scope 1 (typically from gas and diesel purchase in the fleet or communal areas in shared accommodation) and Scope 2 emissions (typically from electricity purchases in the fleet or office space) methodologies are pretty much established and used in the UK and throughout the world.

The stand out questions here centre on how we work through a changing policy landscape: do we migrate now to full electrification of our fleet, and is the UK charging infrastructure at a suitable maturity to make this an operational reality? Do we wait until the national grid itself becomes net zero, and in the event the grid follows a different future, how do we fair under Scope 2? Funders accept that we are still working out what our collective future will look like, and the challenges and opportunities it will present.

Our Scope 1 analysis also teased out interesting tensions between the Environmental and Social components of ESG. At Bromford, the emissions associated with our fleet actually increased year on year to 2023. Our carbon footprint against this driver went up, but it was absolutely the right thing to do for our customers as we emerged from the Covid-19 pandemic and caught up on our outstanding repairs. The message here is simple and one that universally resonated with investors: customer experience can never be compromised in the pursuit of net zero carbon, and we must take a holistic view of ESG as we develop our strategies into operational plans.

Naturally, the vast majority of questions focused on the arena where most of our emissions play out: in the homes that Bromford manages and owns, which sit within Scope 3 of the methodology. It is worth stating at the outset that for Bromford, 95% of our overall emissions reside in this bucket, and the same is likely to be true for most housing associations. But, there is no standard methodology to drive the capture of Scope 3 emissions…

How do we measure emissions from our homes? In an ideal world, we’d have the actual energy bills for all of our customers and we would then apply standard conversions from usage to carbon emissions. That’s rather impractical for 46,000 homes so we rely on the energy efficiency ratings of the homes and assume an average usage.  We estimate emissions from the government’s Standard Assessment Procedure (SAP) methodology, but we are careful to make corrections for things like homes on communal heating systems and homes that are electrically heated.  We know there are vociferous detractors from this methodology but it’s the most practical form of assessment we have, and, in our experience, better SAP ratings do generally correlate with lower carbon homes. In another theme that strikes a chord with our investors: we appreciate the limitations of the methodologies that we apply, but they provide some commitment to baseline of emissions from which we can make meaningful improvements.

And that brings us to one of the critical questions we are facing into with funders: what is our baseline or starting position today, and what is the quality and reliability of the data which supports underpins it? Investors observed how the sector has seen considerable variability in access to data, and how accurately its being captured. At Bromford, we openly recognised that our disclosures in 2022 carried calculation errors, and with improved systems and a more refined understanding of the methodology this year, we have re-baselined our emissions disclosure. And we expect to re-baseline our performance regularly over the coming years as we refine our approach and consider including our supply chain and embodied carbon which are not currently reflected in our numbers. Embodied carbon relates to the energy used to manufacture bricks, windows, concrete etc in our new build homes.  It can add up to 10% to our carbon footprint – significant, but out of reach for capture for now as the necessary data flow from the supply chain to the landlord is virtually non-existent.

A reliable baseline lends itself to benchmarking against peers, and there is a role here for the sector’s Sustainability Reporting Standard to offer a more formal prescription within the standard so we are all reporting on a like for like basis, with the same methodology and same inclusions and exclusions.

The universal theme emerging from all of our workshops highlighted that our carbon journey must be sincere and recognise that we have more questions than answers; but in sharing that journey early with our investors we can welcome a shared future to work through these questions together to identify the key drivers of meaningful change. If individual housing associations commit to this process, then collectively, with over four million social homes, our sector will leave a lasting legacy for our inheritors.


Please be in touch if you would like to discuss a carbon footprint for your organisation.

[1] Published article here:

[2] Photo by Paul Fiedler on Unsplash


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