Increasing industrialisation and urbanisation, increasing fossil fuel consumption, rising energy costs and climate change are a concern for broader society and Murray & Roberts. Murray & Roberts consumed approximately two million MW-h of energy from a variety of fuel sources, with bituminous coal, diesel oil and electricity accounting for 81% of the Group’s energy usage. The table below indicates the amount of energy used by the Group and the major users.

		% of
Fuel source	MW–h	Total	Major user – %
Bituminous coal	686 786	34,1	Ocon Brick – 95

Diesel oil	657 918	32,7	Clough – 74

Electricity	288 819	14,3	CISCO – 56

Heavy fuel oil	275 869	13,7	Much Asphalt – 60

Petrol	56 693	2,8	Concor – 24

LPG	36 145	1,8	Technicrete – 85

Natural gas	7 882	0,4	Hall Longmore – 100

Naphtha	3 380	0,2	UCW – 100

Carbon footprint

Tonnes of CO₂e

Murray & Roberts has participated in the Carbon Disclosure Project (CDP) for the past three years, to evaluate the impact its activities might have on climate change. The Group completed the CDP 8 (8th edition) questionnaire in May 2010.

The Group’s carbon footprint reported last year was 1 376 379 tonnes of carbon dioxide equivalents (CO₂e). This value has been reviewed and corrected to 743 804 tonnes CO₂e. The difference is due firstly to the elimination of bitumen, which was previously captured as an energy source rather than as an additive to asphalt production and secondly, carbon emissions were recalculated with updated emission factors.

The Group’s carbon footprint increased by 8,8% to 809 090 tonnes CO₂e for the year 2009 (CDP 8). This increase is the result of a significant improvement in monitoring and reporting of carbon emissions across the Group.

Approximately 79% of the Group’s carbon footprint is attributable to its South African operations with the Construction Products SADC cluster accounting for 67% of the total carbon footprint. Construction Products SADC operations consume most of scope 1 (e.g. coal in Ocon Brick) and electricity (scope 2). CISCO accounts for 56% of the Group’s 288 million kilowatt hours of electricity consumption.

The table below illustrates the contribution to the footprint by operational cluster.

	FY 2009/CDP 8
Operational cluster	Scope 1	Scope 2	Scope 3	Total	% Total
Construction Products SADC	327 837	211 758	0	539 595	66,7
Clough	128 210	1 612	1 560	131 382	16,2
Construction SADC	17 911	34 901	24	52 836	6,5
Engineering SADC	24 433	14 846	0	39 279	4,9
Cementation Group	7 382	19 815	1 705	28 902	3,6
Middle East	7 931	1 252	246	9 429	1,2
Corporate	35	2 582	5 051	7 668	0,9
TOTAL (tonnes CO₂e)	513 738	286 767	8 585	809 090	100

The figure below indicates percentage contribution to the Group’s carbon footprint by emission source. Electricity (scope 2 emission source), bituminous coal (scope 1), diesel for mobile use (scope 1) and heavy fuel oil (HFO) (scope 1) are the largest contributors to the carbon foot.

Sources of greenhouse gas emissions

The Scope 3 emissions were restricted to employee travel. Scope 3 emissions for South African operations were consolidated and reported under Corporate.

Murray & Roberts has identified the key climate change risks and opportunities, which are summarised below.

Category	Risk and opportunity
Regulatory	•	Fuel/taxes and regulations
	•	Carbon taxes
	•	General environmental regulations, including planning (building codes and legislation)
Physical	•	Changes in precipitation patterns
	•	Changes in frequency of extreme weather events
	•	Induced changes in human, natural and cultural resources
Reputational	•	Litigation exposures, insurance costs and unforeseen environmental remediation expenses resulting from the increasing number and scope of regulatory requirements
Financial	•	Increased transportation costs: carbon tax and fuel levies will increase transportation costs
Market	•	Trade and market risks of carbon intensive products (steel, asphalt, clay bricks) compared to lower carbon alternatives
	•	Demand of low carbon solutions from clients
Others	•	Changes in the availability and costs of goods and services

The implications for Murray & Roberts include:

Increased expenses (purchasing emissions permits, penalties for over running caps, reporting costs), increase in electricity costs and business running costs
Increased rate of diseases, damage and disruption to operations near coastlines, increased logistics and insurance costs and availability of materials due to physical risks
Revenue protection as well as the value of any existing assets in carbon intensive sectors, new contract awards reduced by inability to offer these low carbon solutions/demands by client

Murray & Roberts attempts to be proactive rather than reactive in terms of potential regulatory risks. Possible changes in regulation are anticipated and actions are planned in advance of regulatory changes. Furthermore, Murray & Roberts engages regulatory authorities to understand, and potentially advise on impending changes. Potential physical risks from climate change are constantly monitored at operational level and where they are material, they form part of each company’s risk register.

Murray & Roberts launched an energy management initiative in early 2010 for all its South African operating companies with the objective of:

ensuring effective and efficient use of energy, and to reduce energy cost without compromising productive output
ensuring use of the most effective source of energy
improving efficiency by reducing all sources of waste in energy, hence a reduction in carbon footprint

It is too early to report on the impact of this initiative, but several initiatives are being investigated.

The setting of green house gas (GHG) reduction targets for a large diversified company such as Murray & Roberts requires understanding and the support of all of the companies and operations involved. Murray & Roberts recognises that setting a group GHG target cannot be done without interaction with all of the relevant companies. As such the company has started a process of engaging those operations which contribute most to the overall group carbon footprint to determine emission reduction actions, opportunities and possible targets. Details of our actions to date are provided in our public response to the Carbon Disclosure Project (www.cdproject.net).

CASE STUDY: GREENING ASPHALT PRODUCTION

Much Asphalt has introduced new technology to lower the carbon footprint and energy use of asphalt production at its Benoni, South Africa plant. Much Asphalt introduced double barrel green system technology which allows for temperature reductions of up to 30° celsius, thereby reducing energy and heavy fuel oil consumption, and the associated carbon footprint. This technology reduces the carbon footprint of asphalt on an intensity basis (kg CO2e/tonne of asphalt) of between 20% and 25%. Murray & Roberts will continue to investigate the feasibility of retrofitting the existing Much Asphalt plants with the new foam technology. This will allow the company to differentiate itself competitively by offering a low carbon source of asphalt.

Water usage

Murray & Roberts operates in several water constrained environments, including South Africa, Western Australia and the UAE. Fresh water resources are dwindling, with 98% of South Africa’s available water resources being fully utilised. The estimated water usage for the Group was about 1,2 million kilolitres, mainly supplied by local municipal systems. Cementation Group and our construction operations do not report on water used as it is accounted for on site by clients. Murray & Roberts is, however, evaluating the possibility of participating in the CDP Water Disclosure project in an effort to more accurately measure its water footprint, better understand the water related risks and opportunities and then effectively manage water usage through responsible water stewardship.