Corporate Climate Pledges of High-Revenue Design Firms and Contractors

Abstract

To combat the industry’s contributions to global greenhouse gas (GHG) emissions, a rapidly increasing number of architecture, engineering, and construction (AEC) firms are making corporate climate pledges. The broader literature has shown that corporate carbon disclosures may correspond to measurable and statistically significant corporate emissions reductions. However, the literature has not yet targeted climate pledges in the AEC industry, making this a practically important topic for research. This paper documents the publicly available climate pledges made by the 100 largest civil design firms and the 100 largest contractors, in terms of 2020 revenue, to gauge their sustainability efforts. The authors describe corporate climate pledge attributes such as company climate targets, use of carbon credits, and reported Scope coverage (greenhouse gas emissions). As of February 2023, 42 design firms and 22 contractors had a formal climate commitment, including 7 duplicates (i.e., companies on both contractor and design firm lists). Although several companies have developed specific targets and reporting mechanisms, overall climate commitments vary due to differing company disclosures (e.g., different levels of Scope reporting) and the novelty of some companies’ climate pledges. Similarly, there is a lack of standardization for defining and using climate pledge targets (e.g., net zero and carbon neutral classifications). This paper provides a framework for improving climate commitment accounting for the AEC industry, with an explicit focus on AEC industry relevant GHG emissions accounting. This research makes a significant practical contribution to enabling AEC firms to leverage sector experience as they adopt and strengthen corporate climate pledges.