Environmental performance

Introduction

BAM’s ambition is to build sustainable environments that enhance people’s lives. BAM aims to reduce impact on the environment and people in three ways: by collaborating with its supply chain to enable change; by encouraging innovative and digital thinking through work, and by optimising the benefits of low carbon and circular business models. This chapter describes BAM’s performance towards creating a sustainable built environment from an environmental perspective, in the context of climate change, circularity and biodiversity.

BAM received the first Cobouw SDG award 2021 and was named ‘the most sustainable construction company in the Netherlands’. BAM delivered on its 2021 decarbonisation targets, as CO2 intensity was well below target of 16.3 and BAM was again rewarded a spot on the CDP climate change A List. The amount of construction waste also decreased substantially in 2021. 

The ‘recycle or reuse’ rate slightly increased to 77 per cent. Although BAM did manage to increase the use of sustainable timber over the past few years, BAM is not yet at 100 per cent target of 100 per cent sustainable timber use in its home markets as Ireland has not yet been included in this scope.

Covid-19

Covid-19 continued to affect BAM’s sustainability performance in 2021. Most measures to contain Covid-19 led directly to a reduction of environmental footprint, predominately the travel restrictions and working-from-home policies. These reductions might lead to structural change as the increase in people working from home and the number of digital meetings is expected to continue, at least in part, in a post-pandemic world.

Decarbonisation

BAM is focusing on reducing its carbon emissions and helping others to reduce emissions more widely. BAM’s carbon footprint is monitored by measuring carbon emissions using the greenhouse gas (GHG) protocol. This defines three scopes for greenhouse gas accounting and reporting purposes:

  • Greenhouse gas directly emitted from the Company’s own activities (scope 1);
  • Indirect emissions from purchased electricity, heating and cooling (scope 2);
  • Indirect emissions up and downstream in the value chain (scope 3).

BAM reports all material emissions (scopes 1 and 2) and employee transport emissions (scope 3). BAM discloses its full scope 3 emissions as part of its annual CDP submission, which is publicly available on CDP’s website.

BAM’s asphalt plants have been deconsolidated, due to the new joint venture companies established for asphalt production in the Netherlands and Belgium. As a result, CO2 emissions from asphalt plants fall now under scope 3 instead of scope 1 and 2, and asphalt plants have been removed from BAM’s scope 1 and 2 breakdown and baseline (historic data) to allow a fair comparison: from 230 to 203 ktonnes in 2015, from 136 to 114 ktonnes in 2020 and a similar deduction for the years 2016-2019. The CO2 emissions from asphalt plants are not included in the part of scope 3 disclosed in this annual report, but will be part of BAM’s full scope 3 assessment disclosed through BAM’s CDP submission.

CO2 reduction targets
BAM has a Paris Proof 1.5°C aligned Science Based Target, verified by SBTi, in place to ensure that the CO2 reduction ambition is in line with climate change science. This science-based target has been set for 2030 and provides a pathway towards the long-term climate positive ambition. By 2030, BAM aims to:

  • Reduce scope 1 and scope 2 CO2 intensity by 50 per cent compared to 2015;
  • Reduce scope 3 CO2 emissions by 20 per cent compared to 2017 (the first year BAM assessed its entire scope 3 emissions).

CO2 reduction initiatives
BAM’s main efforts to reduce CO2 emissions include:

  • Working towards procurement of 100 per cent renewable electricity in all offices, facilities and project sites;
  • Reducing diesel use on project sites by establishing early-stage grid connections, electrify equipment and using alternative fuels (biofuels) where possible;
  • Electrify BAM’s company car fleet;
  • Reducing the use of energy by digitalising business operations and improving their efficiency;
  • Working with clients and supply chain partners to reduce carbon emissions in the value chain;
  • Bringing low- or zero-carbon products and services to the market to scale up their positive impact.

23 CO2 emissions intensity
(in tonnes per € million revenue)

24 Total absolute CO2 emissions
(in kilotonnes)

CO2 footprint
BAM’s CO2 intensity decreased to 15.4 tonnes per € million of revenue, an eight per cent reduction compared to 2020. This means BAM is already close to reaching its 2030 reduction target, and likely to meet it more quickly than anticipated. The reduction mainly caused by an increased revenue (partly due to inflation) and ongoing CO2 reduction measures. Absolute CO2 emissions in 2021 were 112 kilotonnes, only slightly lower than the emissions in 2020 (114 kilotonnes).  Reductions due to the wind-down of BAM International and ongoing CO2 reduction initiatives were to a large extent offset by the increase in output in 2021.

The green electricity share slightly decreased to 60 per cent (2020: 63 per cent) as a result of the deconsolidation of asphalt plants in NL, which run completely on green electricity. However, this share is expected to increase again with the divestment of operations in Germany and Belgium where the majority of non-green electricity is procured.

Emissions from construction sites
The largest source of carbon emissions lies in BAM’s construction sites, this is sub-divided into ‘Construction and Property’ and ‘Civil engineering’, of which the latter is by far the most energy and carbon intensive. In 2021, absolute emissions from construction sites were on par with 2020. in the United Kingdom and the Netherlands, more energy-intensive civil engineering projects were carried out. The consequential increase in CO2 emissions was mainly compensated by the increased use of biofuels such as Hydrotreated Vegetable Oil (HVO): more than one million litres HVO was used in 2021 (compared to over 17 million litres of generic diesel). The use of sustainable certified biofuels is a key aspect of BAM’s strategy to decarbonise construction sites and is expected to rapidly increase in the coming years.

Emissions from vehicle fleet
The emissions from the vehicle fleet, which account for 35 per cent of BAM’s total CO2 emissions, decreased by 4 per cent compared to 2020. Ongoing working from home policies due to the Covid-19 outbreak continues to contribute to this reduction, but BAM also continued the transition to a more efficient and sustainable vehicle fleet by optimising travel distances of employees and deploying more energy-efficient vehicles. BAM has increased the amount of fully electric vehicles in its lease fleet from 269 in 2020 to 354 in 2021 (a share of seven per cent of the total lease fleet). 

Emissions from offices and air travel
Emissions from offices slightly increased again in 2021 and are on par with 2019 levels as working from home policies due to Covid-19 did not lead to the temporal closing of offices as in 2020. The strong reduction in air travel emissions is primarily the result of the completed wind-down of BAM International. 

BAM’s climate action acknowledged
BAM was rewarded a place on CDP’s prestigious ‘A List’ for climate change for the third consecutive year. CDP is a global ranking that evaluates corporate efforts to address and mitigate climate change. BAM is recognised for its actions to reduce carbon emissions, transparent reporting and the assessment of the role of climate change on the business strategy and performance. In 2021, BAM was also included in the Europe’s Climate Leaders list of the Financial Times, a list of the top 300 European companies when it comes to greenhouse gas intensity reduction.

25 CO2 emissions per business activity
(in kilotonnes)

26 CO2 emissions per source
(in kilotonnes)

Scope 3 emissions
BAM supports the focus on more ambitious targets to drive progress towards a low-carbon future. Scope 3 emissions, emissions in the value chain outside BAM’s activities are an important aspect of a low-carbon future. BAM discloses its full scope 3 emissions as part of its annual CDP submission, which is publicly available on CDP’s website. The scope 3 assessment underlines the importance of scope 3 emissions and improves the understanding of BAM’s wider climate change impacts. The areas’ purchased goods and services’ and ‘use of sold products’ contribute most to BAM’s scope 3 emissions and the Company engages with suppliers in exploring reduction measures that focus on these areas.

Circularity

BAM strives to become an integral part of the circular economy, eliminating waste over the lifecycle of its developments and increasing circular aspects and approaches in projects. BAM aims to preserve raw materials and resources over the lifecycle and deliver projects using safe, healthy and renewable materials. BAM intends to:

  • Eliminate wasteful construction practices, and deliver projects that will produce less waste in operation;
  • Promote the circular economy by using products and materials that can easily be maintained, re-used or repurposed in the future, avoiding low grade recycling wherever possible;
  • Procure materials from certified responsible sources.

Waste
Construction and office waste is the most important waste category for BAM as these materials are initially brought to BAM’s sites and offices on its behalf, in contrast to excavation and demolition waste. In 2021, BAM produced less construction and office waste than in 2020, at 85 kilotonnes (2020:100 kilotonnes). The construction and office waste intensity was 11.6 tonnes per € million revenue, a 21 per cent decrease compared to 2020 (construction and office waste intensity in 2020: 14.6).

27 Total waste production per source

(in kilotonnes)

 

28 Construction and office waste production per destination category (in kilotonnes)



BAM has set the ambition to completely recycle or re-use its construction and office waste by 2025. In 2021, 77 per cent of BAM’s construction and office waste was recycled or re-used (2020: 76 per cent). A total of 8 kilotonnes (2020: 15 kilotonnes) was landfilled or incinerated without energy recovery. BAM continues to engage with its waste contractors to explore how to further improve the waste treatment processes and increase recycling and re-use ratios. BAM also stimulates its project teams and offices to improve waste separation and recycling and re-use ratios.

Material use
BAM has identified the quantities of materials used in its construction projects in the Netherlands, its largest home market. This includes identifying the main categories of procured materials as shown in table 29. The material quantities and recycled content are based on supplier data, industry averages and data from the asphalt plants of AsfaltNU.

The use of secondary (reused or recycled) materials is a key aspect of working towards circularity. BAM is looking to utilise more secondary materials in various parts of the business, such as in the asphalt products that BAM offers. In 2021, BAM participated in a pilot-project (Asfalt-Impuls) together with client Rijkswaterstaat to realise a sustainable asphalt-mixture at the N638 project in the province of Noord-Brabant, the Netherlands. In this project, a unique asphalt mixture with recycled PA-Stone of 60 per cent has been applied. This specific pilot project was a testcase for clients to consider including sustainable asphalt mixture requirements in upcoming tenders and offers a clear example of circularity opportunities for BAM in the Dutch Civil Engineering business line. 

Applying higher recycling rates in asphalt production does provide an environmental issue as the harmful substance benzene can be released during recycling. This is a sector wide issue and not easy to solve as the demand for (circular) asphalt remains high. 
In 2021, Asphalt producers in the Netherlands jointly conducted research into benzene emissions from asphalt plants. BAM, together with other industry partners is exploring how to tackle this issue. The Company is unfortunately not yet able to offer a clear solution since this also requires support and commitment from (local) governments. 

Circular developments
Circularity is an important topic in the construction sector, and BAM is well placed in the industry to build on past circular economic achievements. BAM is in the process of further defining its strategy towards circularity to demonstrate the opportunities and benefits for the design, construction and operation of buildings and infrastructure assets from using new circular economic business models. BAM’s main challenge remains working out how best to achieve the transition from linear to circular patterns and increase the scale of circularity. Close collaboration with clients and supply chain partners is essential to seize circular opportunities.

Within both the Dutch Construction & Property and Civil Engineering business lines, BAM is actively working on the development of integrated circular concepts and showcasing the benefits to clients. In 2021, different circularity initiatives and products were rolled out, such as:

AM’s project Bajeskwartier in Amsterdam, the Netherlands is currently under construction (2021). Circularity is one of the core values of this urban redevelopment plan for 1,350 new homes. Five of the six concrete towers will be demolished; 98 percent of the construction waste from this concrete is intended to be reused in this high-end redevelopment project. 

At the BAM Infra Nederland project the Vechtdalverbinding, BAM was able to reduce embodied carbon from material (re)use with 37 per cent compared to the clients design. This is mainly achieved by design optimisations in the tender phase and making use of materials ready on site: In this project currently under construction, BAM’s design uses 45 per cent less concrete, 24 per cent less steel and optimised asphalt mixtures (low temperature).

29 Material consumption in the Netherlands

Consumption   2021 2020 2019 2018 2017
Ready-mix concrete 282,500 231,500 203,000 208,000 173,000
Timber 18,000 21,000 34,500 19,500 19,000
Asphalt t 1,050,000 1,400,000 1,100,000 1,250,000 1,300,00
Steel t 84,000 77,000 76,000 72,500 61,000
             
Recycled content            
Ready-mix concrete % 7 5 10 12 15
Timber % 0 0 0 0 1
Asphalt % 46 39 42 41 37
Steel % 68 70 70 66 72


Climate adaptation

Climate adaptation is gaining attention as an important aspect of corporate climate strategy. It relates to how companies deal with risks and opportunities associated with climate change. BAM addresses climate adaptation through the assessment of climate change risks at project and business level and through its stage gate procedure. BAM discloses the full details of its climate change risk assessment in its CDP submission. Key risks and opportunities identified in 2021 relate to:

  • Market-related risks and opportunities (e.g., changing client behaviour leading to an increased demand for low-carbon products and zero-energy solutions);
  • Product- and services-related risks and opportunities (e.g., development of lower-carbon construction materials pushing the market to innovate and develop a lower carbon footprint);
  • Physical weather conditions (e.g., adaptation to sea-level rise by exploring potential future additional demands on water-land infrastructure, which is a core element of BAM’s products and operations).

Climate adaptation is also an increasingly more important topic in the projects BAM delivers. BAM helps future-proof their clients assets by offering climate resilient buildings and offering civil engineering solutions to mitigate climate hazards. Two examples from 2021 are:

Het Kadehuis, a climate resilient building in Arnhem in the Netherlands developed by BAM. In this project, the exuberant roof landscape reduces heat stress in the built environment. This effect is also achieved by the greenery on the terraces which serve as a water buffer and contributes to biodiversity in the inner city of Arnhem.

In the Civil Engineering business line, BAM Nuttall In collaboration with contractor and Mott Macdonald, delivered a major flood alleviation scheme to improve protection against climate change and sea level rise in Hull, United Kingdom. This scheme plays a major role in enabling the Environment Agency reaching its target of protecting 300,000 homes from flooding. 

Biodiversity

Biodiversity is increasingly gaining attention within the construction sector as a topic both in the projects that BAM delivers as during the construction phase. BAM sees opportunities to improve biodiversity in its projects and deliver biodiversity enhancing assets as part of its purpose to create environments that enhances peoples’ lives.

Biodiversity net gain
Improving biodiversity, so-called biodiversity net gain (BNG), is increasingly being offered in tenders and measured on projects in the United Kingdom. BNG is a process which leaves nature in a better state than it started. This is done with a BNG assessment to quantify the potential biodiversity impacts for the site, which includes a biodiversity baseline assessment, analysis of habitat losses due to temporary works and permanent structures during construction work.

BAM helps their clients restore and improve ecosystems. An example of a project where BAM achieved BNG in 2021 was the Reston Station and car park in Scotland. This project was delivered in 2021 to client Network Rail and BAM enhanced the species mix to improve the biodiversity rating together with the client and landscape designers.

BAM underlines the important role it has in protecting and improving biodiversity. Therefore, BAM intends to explore to what extent biodiversity net gain can be offered and measured in more projects also in the Netherlands, and whether a group-wide target on biodiversity can be put in place in the future.

Sustainable timber
BAM considers sustainable timber a valuable construction material to support the transition to a circular economy. Besides, using sustainable timber is key to supporting forest conservation and biodiversity while also helping to combat climate change. BAM has therefore made a commitment to FSC Netherlands to exclusively use certified sustainable timber for its projects. In cooperation with FSC Netherlands, BAM continues to engage with suppliers to encourage them to improve the identification and reporting of certified timber.

In BAM’s home countries (Netherlands, United Kingdom and Ireland), BAM achieved a certified sustainable timber use of 99 per cent. The data coverage is 89 per cent (82 per cent if Belgium and Germany would be also taken into account), as only timber use in Ireland is not included. Market conditions continue to make it very challenging to procure sustainable certified timber in Ireland. 

In 2021, BAM used 98.9 per cent certified sustainable timber in the Netherlands (92 per cent FSC). Timber use by subcontractors and in subcontracted projects is not included. In the United Kingdom, 99.5 per cent of timber was from verified legal and sustainable sources, of which 85 per cent was delivered with full FSC or PEFC Chain of Custody certification. Certified sustainable timber use in Belgium is estimated at 92 per cent, the figures obtained in Germany are not yet sufficiently reliable and less relevant with the divestment of BAM Deutschland, and the volume of timber use by BAM International’s projects was insignificant in 2021. 

30 Certified sustainable timber use
(in %)

  2021 2020 2019 2018 2017
Organisational coverage 87 81 80 79 65
Sustainable timber 99 99 99 94 98


Nitrogen and PFAS emissions
The deposition of nitrogen and emissions of Per- and polyfluoroalkyl (PFAS) and Perfluorooctanesulfonic acid (PFOS) substances remain important issues in the construction sector in the Netherlands and also start to gain attention in Belgium. The regulatory limits that have been put in place can lead to the delay or temporally shutdown of construction projects. Although potential implications are covered by the client to a large extent and BAM projects were barely affected by this in 2021, BAM needs to continue to closely monitor developments in this area and the potential impact these can have on the Company’s projects.

BAM is also actively trying to contribute to the solution of reducing nitrogen emissions. BAM signed the Dutch ‘Malieveld’ agreement in 2019, where it committed itself to nitrogen emission-free property development, design and construction. Measures to reduce nitrogen and carbon emissions, such as electrification of equipment, are implemented at individual project level both in the design and construction phase.

Sustainable revenue and EU taxonomy

BAM supports clients to reduce their environmental footprint and impact. In 2021, 25 per cent of BAM’s revenue, approximately €1.8 billion (€1.3 billion in 2020), came from projects that were registered with third-party green building or sustainable construction rating organisations. These included US Green Building Council’s Leadership in Energy and Environmental Design (LEED) standards, the Building Research Establishment Environmental Assessment Method (BREEAM), Germany’s Passivhaus standards and other objective and third-party standards or BAM’s green building products. 

The EU taxonomy is a new classification system for sustainable activities in which definitions are provided to determine what activities can be classified as environmentally sustainable in the EU. The results of this classification are to be reported annually. In accordance with European Regulation 2020/852 of June 18, 2020, BAM is subject to the obligation to disclose what proportion of its revenue, its capital expenditures, and operating expenditure is eligible under the EU taxonomy in reporting year 2021. Taxonomy-eligibility indicates whether an economic activity is present in the EU taxonomy framework. It does not disclose whether an economic activity is environmentally sustainable (taxonomy-aligned). For fiscal year 2021, only disclosure of eligible activities is required for the first two environmental objectives (climate change mitigation and climate change adaptation). From fiscal year 2022 onwards, a more extensive analyses will be required, not only to determine eligibility, but also alignment with the underlying sustainability criteria. BAM is committed to keep monitoring EU taxonomy developments closely to ensure correct assessments as a basis for its annual disclosures.

For this annual report, BAM has completed a first screening of EU taxonomy eligible activities. Details of the eligibility screening and definitions of capital expenditures and operational expenditures as used for the EU taxonomy are presented in chapter 9.8.

Outlook

In 2022, BAM will release new sustainability targets, covering the topics decarbonisation, circularity, climate adaptation and biodiversity. BAM expects that its strong performance on reducing CO2 emissions, supported by the increasing demand from the market and stakeholders for more ambitious climate plans, will allow the Company to accelerate its CO2 reduction targets. BAM is currently exploring to accelerate its Science Based CO2 reduction target to 2023. Furthermore, a larger emphasis will be put on further maturing BAM’s scope 3 measurement to allow for improved scope 3 target setting and reporting in the future. The EU taxonomy guidelines will require BAM to assess whether BAM projects are aligned with the EU taxonomy criteria and can be classified as sustainable. BAM is working towards structurally measuring this and looks forward to start disclosing this in 2022.

The increased scope of BAM’s sustainability strategy provides great opportunities for BAM to maintain its position as a leading construction company in the field of sustainability. With a good track record in meeting sustainability targets, BAM is looking forward to keep improving and working towards a sustainable tomorrow.

 

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