Climate change-related risk management
Kedge Construction attaches great importance to the risks brought by climate change, and at the same time intends to transform risks into opportunities, committing ourselves to creating new business opportunities. In 2021, we adopt the “Recommendations of the Task Force on Climate-related Financial Disclosures” (TCFD) to identify key climate change risks and opportunities that concern the company, and implement relevant plans in response based on the identification results.
Kedge Construction Climate Change Governance Organizational Chart
Adoption of the TCFD framework
We adopt the TCFD framework to assess climate change-related transition risks, and measure the impact of climate change faced by the company itself, supply chain and related industries, so as to communicate with stakeholders through climate-related financial disclosures. For demonstrating the globally shared responsibility of mitigating climate change with the world, we have formally included the issues of greenhouse gases and climate change in the discussion agenda of the green low-carbon group under the ESG Committee, proposed green engineering refinement plans, assessed climate change risks and opportunities, and formulated energy-saving and carbon-reduction plans. This group is supervised by the Sustainable Development Committee under the Board of Directors, and the chairman of the committee (the Chairman serves as the chair) regularly reports to the Board of Directors the effectiveness of greenhouse gas management and the results of climate change response as a reference base for the long-term strategy of the company in responding to climate change risks.
TCFD Risk and Opportunity Identification and Impacts on Finance
Based on the TCFD framework, the identification and prioritization of climate-related risks and opportunities are carried out. By referring to relevant research reports on climate risks and opportunities from various organizations, the company’s executive meetings assess climate change risks and response measures to identify potential crises and possible opportunities related to climate change.
After cross-departmental discussions on climate change risks and opportunities, Kedge Construction, following the TCFD recommended framework, has identified four major climate-related risks and five major climate-related opportunities.
Greenhouse Gas Inventory
Greenhouse gas reduction is one of Kedge Construction’s sustainable development goals. The company integrates energy-saving and carbon-reduction measures into daily operations management at both headquarters and construction sites, actively invests in green engineering technologies, and implements circular economy practices. Since 2022, Kedge has been conducting an internal inventory of emissions sources in categories one to six, covering seven greenhouse gases (CO2, CH4, N2O, HFCs, PFCs, SF6, NF3), in accordance with the “ISO 14064-1:2018 Standard”. The inventory boundaries are set for the company’s headquarters and nationwide construction sites, with the first inventory year 2022 as the base year, verified by a third party. In 2023, the greenhouse gas emissions for Scope 1 and Scope 2 at the company headquarters were 36.93 and 57.79 tCO2e, respectively, while the total emissions for Scope 1 and Scope 2 at nationwide construction sites were 524.55 and 2,770.91 tCO2e, respectively.
Greenhouse Gas Inventory Progress
Science-Based Targets (SBTi)
Net-Zero Emissions
The Science-Based Targets initiative (SBTi) is the world’s first organization to establish frameworks for achieving net-zero carbon emissions and reducing carbon for businesses. Based on scientific principles, this organization assists businesses in setting short-term and long-term carbon reduction goals, providing clear guidelines, standards, and tools.
Kedge Construction recognizes carbon reduction as a primary responsibility in the construction industry. Leading domestically, Kedge not only conducted the most comprehensive carbon inventory among its peers but also actively joined climate actions to achieve net-zero emissions by 2050, contributing to keeping global temperature rise within 1.5°C. Using 2022 as a baseline year, Kedge submitted Near-term Science Based Targets to SBTi, committing to reducing Scope 1 and Scope 2 greenhouse gas emissions by 42% and Scope 3 emissions by 25% by 2030. These targets were verified by SBTi on February 22, 2024, establishing Kedge as a model in the domestic construction industry.
Starting from 2022 as the year of carbon reduction, Kedge comprehensively implemented organizational greenhouse gas inventories for ongoing construction projects, becoming the first in the construction industry to include Scope 3 (including upstream transportation and product/service use) carbon inventories. Upon identifying carbon hotspots through inventories, Kedge promptly formulated carbon reduction strategies and set annual reduction targets based on SBTi, annually reviewing the effectiveness of each reduction effort and adjusting iteratively. Additionally, focusing on materials with the highest emission percentages, such as carbon-intensive building materials, Kedge continues to achieve carbon reduction benefits through precast construction methods, replacing traditional wood formwork with aluminum formwork, and using low-carbon concrete.
