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Understanding Embodied Carbon in Buildings

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! 

Construction being conducted on a commercial building

What is embodied carbon – and why does it matter?  

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.” 

A steel building with large windows looking out onto a nature view

How do you calculate embodied carbon? 

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: 

  1. Goal and scope definition, which establishes the goals, objectives, and boundaries of the LCA. It includes clear definitions of the functional unit (e.g. square foot of floor space), system boundaries (e.g. the scope of materials to be included), and the reference flow (e.g. construction of a new building; renovation of an existing one), which are used to normalize the results and aid in comparison.

  2. Life Cycle Inventory (LCI) analysis, which provides guidelines for collecting and analyzing data on the inputs and outputs associated with the life cycle stages of the product or service. With respect to buildings, building materials, and embodied carbon specifically, this may include the energy, water, and emissions data associated with the extraction or production of raw materials and any downstream transportation, manufacturing, and construction activities. A related ISO standard (ISO-14067:2018) provides guidelines for quantifying the carbon footprint of products and materials. 
  1. Life Cycle Impact Assessment (LCIA) analysis, which involves evaluating the environmental impacts of the material in terms of various impact categories, including global warming, acidification, eutrophication, and more. During this stage, LCA tools may leverage databases of Environmental Product Declarations (EPDs), which are manufacturer-provided breakdowns of the environmental impacts of products and materials. 
  1. Interpretation and reporting, which provides guidelines for interpreting the results of the assessment and communicating them in a clear, concise, and consistent manner.

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. 

Two businesswomen meeting to discuss a project on a computer

How do you reduce embodied carbon? 

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:

  • Using low-carbon materials: One of the most effective ways to address embodied carbon is to specify low-carbon building materials. Opting for building insulation materials made from natural materials, such as wool or cellulose, instead of using synthetic products is one avenue. Using wood in construction instead of steel or concrete is another impactful avenue for reducing embodied carbon; wood is a renewable resource that is grown and harvested, and the sustainable production of wood sequesters CO2 from the atmosphere. Certain wood products, like cross-laminated timber (CLT) and glued laminated timber (glulam), can store carbon for many decades, helping to defray the embodied carbon of a building and its total carbon footprint. It is important to note that the source of the wood makes a difference here – wood has more embodied carbon when harvested from deforested areas and non-sustainably managed forests, so understanding where timber is coming from is key.

  • Minimizing new construction and use of new materials: “The greenest building is the one that already exists” is a now-familiar adage in real estate. Scaling back on new construction, maintaining the existing structure of a building, and/or reducing the amount of construction materials used can help bring down the embodied carbon of projects.

  • Reusing and recycling materials: This includes salvaging materials from buildings that are being demolished, purchasing recycled or reconstituted construction & demolition (C&D) materials, or using prefabricated building components that can in turn be easily reused.

  • Using construction methods that promote disassembly: Related to the above strategy is a process known as “designing for disassembly.” This strategy involves pursuing design and construction methods that ensure a building can be quickly renovated or dismantled at the end of its lifecycle, and that its parts (systems, materials, and components) can be reused or recycled as reconstituted building materials.

  • Local sourcing: This option entails choosing materials sourced from local suppliers to reduce transportation-related embodied carbon.
  • Designing buildings to last: Finally, another key strategy for reducing embodied carbon is to design and construct buildings that are durable, adaptable, and easy to maintain, with an ultimate eye towards extending the building’s lifespan. In addition to deferring and mitigating the embodied carbon associated with end-of-life demolition and disposal, “building to last” also reduces the need for frequent repairs and maintenance, which can further reduce embodied carbon. 

Heavy machinery moving loads of timber at a container yard

Who is responsible for embodied carbon? 

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. 

A meeting of four business people collaborating on laptops

Final thoughts

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.