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In the context of commercial real estate, embodied carbon refers to the carbon emissions associated with the production, transportation, and disposal of the materials used in the construction of a building. Put another way, embodied carbon can be thought of as the emissions associated with a building before it becomes operational and when its useful life ends.
With all eyes on corporate net zero targets, embodied carbon is rapidly becoming a major industry talking point – and an increasingly critical consideration when evaluating the environmental footprint of a building or portfolio. But it is not without its challenges. Not undeservedly, embodied carbon has gained a reputation in real estate for being considerably more complex to track and manage than its (already rather nuanced) partner, operational carbon.
What drives this complexity? For one thing, a building may change hands multiple times throughout its lifecycle, with ownership of the emissions potentially transferring between stakeholders over time.
The calculation process itself also presents challenges. The activities that generate embodied carbon may not fall within an organization’s direct value chain, making it labor-intensive to track down the data necessary to understand the full emissions impact of a building’s design and construction.
And if embodied carbon is by definition “embedded” into production, essentially frozen within a building’s materials post-construction, what steps can be taken to mitigate these emissions? And what happens when it’s too late?
We explore all these questions in this article, so let’s dive in!
We all know the familiar statistic: buildings are responsible for roughly 40% of global greenhouse gas emissions. Within that 40%, the operation of buildings accounts for 27% of emissions annually (the previously mentioned “operational” emissions), while embodied carbon makes up the remaining 13%.
Where does embodied carbon come from? The production of many common building materials, such as concrete, steel, and aluminum, is one significant source. Steel alone is estimated to generate 6.6% of all global emissions, with one ton of steel corresponding to approximately one ton of CO2e.
But material production is just the beginning. The transportation of these materials from the manufacturing site to the construction site also generates embodied emissions that must be taken into account. Construction and installation activities may result in additional emissions. And the deconstruction and disposal of materials at the end of a building's lifespan can further add to its embodied carbon; there are often emissions associated with demolition, the transportation of materials to a waste processing site, and the final waste disposal itself. This entire process, from raw material production to end-of-life disposal, is referred to in the industry as “cradle-to-grave.”
Along the journey, there are multiple steps that must be cataloged and calculated. It’s a lot to get your arms around, especially if you are a real estate developer with multiple projects in the pipeline.
But real estate must confront the challenge. As buildings become more efficient and better at reducing and eventually eliminating operational carbon, embodied carbon will become a bigger portion of the built environment’s lifetime carbon footprint. Per ULI, “if nothing is done to reduce embodied carbon in buildings, it is unlikely that emissions targets necessary to keep global warming within 2 degrees Celsius will be met.”
At the most simplistic level, calculating embodied carbon generally means tallying up the emissions associated with the materials and activities relating to the lifecycle of a product. But when the product in question is an entire building – and its many constituent pieces and parts, sourced from many companies, supply chains, and locations over time – this process can become a mammoth undertaking.
Fortunately, there are frameworks and standards to help. Enter the whole-building lifecycle assessment (WBLA).
A WBLA is a comprehensive evaluation of the environmental impact of a building over its lifespan. As the name suggests, a WBLA considers the entire lifecycle of a building, from the extraction of raw materials and the manufacturing of building components, to construction and operation, to eventual end-of-life demolition and disposal or recycling. WBLAs build upon a methodology known as Life Cycle Assessment (LCA), which is a rigorous scientific process that involves identifying the inputs and outputs for each stage of a given product lifecycle and quantifying the impact of each.
The key difference between a WBLA and an LCA is scope: LCAs can be conducted on discrete systems or materials within a building (such as structural systems or cladding systems), while WBLAs deal with all systems and components of a building. Both approaches can help create similar points of comparison and guide decision-making in design and construction.
How do these assessments work, and what do they entail? Conducting an LCA or WBLA is a formal, multi-disciplinary process involving a variety of different inputs, outputs, and datasets. With so much disparate information to gather and interpret, third-party standards and guidelines have arisen to help create consistency. Notably, the International Standards Organization (ISO) has put together definitive guidelines for conducting an LCA (see ISO-14044), broken into the following four phases:
Whether you’re designing a new building, renovating an existing one, or seeking to understand the embodied carbon of a building you purchased (more on that below), WBLAs and LCAs are among the most important tools in your arsenal.
One of the main problems with embodied carbon is that once it has been generated, it is effectively “locked” into the materials – it cannot be eliminated or even reduced. Mitigating a building’s embodied carbon therefore means getting ahead of things early in the design and planning stages and making decisions that help you avoid it altogether.
As outlined above, conducting a WBLA or LCA is an important first step to understanding the various approaches available for avoiding and reducing embodied carbon. Every assessment will yield different results, but some of the key strategies that may surface include:
We’ve arrived at one of the central questions surrounding embodied carbon: whose carbon “balance sheet” does it fall on? The short answer: as buildings change hands, so does the embodied emissions ownership.
At the beginning of a building’s lifecycle, the main parties involved in the design and construction of that building can generally be considered responsible for its embodied carbon (the final ownership share of the embodied emissions may depend on an organization’s chosen reporting boundary). In the event that a developer conducts an LCA on a new build, ISO-14044 stipulates that the "responsibility….should rest with the organization that commissions and uses the results of [the LCA]."
Green building certifications can also shed light here. LEED, BREEAM, and others encourage the reduction of embodied carbon in buildings by giving credits to building design that meets certain requirements. In these cases, the party that seeks the certifications also takes responsibility for the embodied carbon.
But what happens when a building changes ownership? Per the GHG Protocol, embodied carbon within buildings will almost always qualify as Scope 3 emissions to be reported as Purchased Goods and Services, Capital Goods, or Upstream and Downstream transportation. In the case of an existing building that has been acquired by a company, the embodied carbon of that building would fall within the new owner’s GHG inventory under the Scope 3 - Capital Goods subcategory. Essentially, when you purchase a building, you take on its emissions liability.
Of course, embodied carbon is not limited to just whole-building construction, or to asset acquisition and disposition. Major renovations and build-outs that may occur throughout a building’s lifecycle, in addition to its end-of-life disposal, will generate additional embodied carbon that building owners must calculate and report. Real estate owners should therefore factor in the time and resources necessary to conduct LCAs for large renovations, and expect to assume the liability for any additional embodied carbon that is generated.
Embodied carbon is an increasingly urgent piece of the equation for real estate developers and owners. But in spite of its complexities, organizations should not shy away from taking steps to understand and manage embodied carbon at every stage of the building lifecycle. In doing so, they will not only be accounting for the full picture, but will help to create more sustainable and environmentally-friendly buildings, ultimately driving forward meaningful progress in the fight against climate change.
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