This document provides an overview of the opportunity for investors, developers, building owners and tenants to reduce embodied carbon by developing company-wide policies and practices, and provides three paths to getting started. More information about opportunities for addressing embodied carbon with policy can be found in the Carbon Leadership Forum’s Owner Toolkit.
Version: May 4, 2021
Embodied carbon refers to the greenhouse gas (GHG) emissions associated with the manufacturing, transportation, installation, maintenance, and disposal of building materials. When a building owner or tenant purchases materials to construct a space, these emissions become part of their carbon footprint. Upfront or “cradle-to-gate” GHGs are released during extraction and manufacturing. These emissions are released into the atmosphere before a building is constructed, so the only opportunity to reduce emissions is when the materials are selected or purchased. Unlike operational energy, embodied carbon can’t be reduced over time through retrofits and clean grids; embodied carbon must be addressed immediately before building and tenant space fit-out construction begin. Learn more about the urgency of embodied carbon here.
Companies need to act now or be left behind
Integrating embodied carbon into company sustainability and construction policies now can protect companies from regulatory and reputational risks while providing brand differentiation as customers, employees, investors, and regulations continue to gravitate towards decarbonization. The following list highlights different types of embodied carbon initiatives that companies might encounter:
- Government regulations and incentives, such as legislation that implements embodied carbon reporting requirements and carbon intensity limits (see the CLF Policy Toolkit for a map of existing and proposed policies);
- Financial disclosures, such as the upcoming EU Sustainable Finance Taxonomy and the Task Force on Climate-Related Financial Disclosures;
- Corporate sustainability and reporting initiatives, such as the GRESB reporting index, CDP Supply Chain, Science Based Targets, and business action on the Sustainable Development Goals and the UN Global Compact;
- Green building certifications, such as BREEAM, LEED v4, Zero Carbon, and 105 other voluntary certifications identified by the Embodied Carbon Review; and
- Voluntary commitments, such as the 2030 Challenge for Embodied Carbon, the C40 Clean Construction Declaration, the SE2050 Commitment Program for structural engineering firms, the AIA Materials Pledge, or a self-driven corporate carbon commitment.
Solutions are affordable and widely available
The good news is that solutions are already available to target supply chain emissions. Getting started can come at little to no cost. Current research indicates that 24-46% of supply chain construction emissions can be reduced with less than a 1% cost premium added to the construction price (RMI to be released May 2021, World Economic Forum).
Learn more about the business case for addressing embodied carbon in the Urban Land Institute’s guide here.
The unique role of corporate policies
Corporate policies of investors, developers, and public or private building owners and tenants play an important role in reducing embodied carbon because they impact the entire building value chain. This is important for two reasons:
- Increased opportunities, reduced cost: Project-level opportunities to reduce embodied carbon increase in difficulty as a project develops. Prioritizing carbon early in a project reduces cost and increases the range of strategies available for reducing carbon (see Figure 1).
- Market signaling: When owners or investors establish embodied carbon policies, they send a demand signal across their value chain that encourages confidence in clean manufacturing and other investments.
Figure 1. Investor, developer, and owner corporate policies are key to reducing embodied carbon because they set requirements for the entire value chain. Many low-cost, high-impact strategies like adaptive reuse or using low-carbon concrete require coordination with site selection or design and performance requirements early in a project. Reducing embodied carbon in manufacturing is important for reaching net-zero embodied carbon long-term, but it requires large investments from manufacturers and a strong market signal throughout the value chain will be required to enable investment and action.