Industry Outlook and Building a Business Case

Industry Outlook

In recent years, the industry has seen a groundswell of attention on the topic of embodied carbon. Scrutiny has grown amidst public policy development, industry organizations (e.g. AIA 2030, MEP 2040, and SE 2050), and mounting social pressure to address climate change. Research, development, and call for adoption has appeared in a way that mirrors energy code and operational carbon emissions mitigation from the 1990’s, and we can expect life cycle analysis to become the “new normal” as energy analysis is today. 

The UCOP’s Sustainable Practices Policy takes an ambitious position on building efficiency and electrification to move forward on climate action. As part of this policy, a minimum reduction of 90% for total emissions—including Scope 3—which requires the tracking and ultimate reduction of embodied carbon. These requirements have ripple effects on design, procurement, waste reduction, and reuse practices. While guidelines and best practices are still under-development, the goal is ultimately to align with the State of California’s goals and policies to achieve climate neutrality by 2045.

Assembly Bill(s) 2446 and 43 require the California Air Resources Board (CARB) to develop a framework for measuring and then reducing the average carbon intensity of the materials used in the construction of new buildings in order to achieve a 40% net GHG reduction in the state’s building sector by 2035. Support from the public sector exists from procurement policies such as Buy Clean, which was adopted in 2017 and phased in GWP compliance limits in 2022.

As of July 2024, California also has become the first to adopt state-wide embodied carbon requirements. The code is an indication of the pathways for decarbonization today and into the future—offering a framework for how we will achieve necessary reductions. Those mandatory pathways are:

• Reuse - At least 45% of an existing building’s primary structural elements and enclosure. This pathway recognizes the importance of utilizing existing assets to mitigate the demand of resources and manufacturing of new products.
• Performance - Whole Building Life Cycle Assessment (WBLCA). This pathway considers the same scope (structure and enclosure) as the well-established framework of the “Building Life-Cycle Impact Reduction” LEED credit, which includes structure and enclosure, and is already commonly used in the industry. A minimum 10% reduction is required. This pathway recognizes the role of designers in measuring and reducing emissions in design.
• Prescriptive - Materials must meet specified emission limits. This pathway aims to decarbonize manufacturing emissions and expands upon California’s Buy Clean California Act (BCCA) of 2017, extending the scope of projects covered beyond public projects and adding concrete to the list of covered materials.

These requirements are not temporary. In fact, the higher tiers of CALGreen also indicate what is expected to be required in the future. 

Beyond CALGreen, we can look to precedence, both domestic and international, for what will likely at first be voluntary, then required, in the near future. For example, UK Net Zero Carbon Buildings Standard (NZCBS) has published a pilot guide providing a clear framework to adopt carbon intensity limits for embodied carbon as well as operational carbon. 

Similarly, in the US, groups like ASHRAE are developing standards (i.e. 240P) that will establish the rules for calculating whole life carbon and data collected by the CLF, AIA2030, SE2050, or beyond will undoubtably become the basis for benchmarks and performance criteria in the near future.

Embodied carbon is the lens into where our materials come from and what happens to them at the end of their useful life. As we better understand these processes and build systems to mitigate carbon emissions and reduce waste, we also open our understanding for better practices with healthy materials, forced labor, and biodiversity. In support of this progress, we see adoption of circular economy principles. One example of this is the NYC EDC publishing of its Circular Design & Construction Guidelines and implementation on the Science Park and Research Campus (SPARC) Kips Bay, a first of its kind higher-ed facility. 

With all the movement of recent years, one thing is for certain: the notoriously slow to change building industry faces significant deviation from the status quo today and in decades to come as part of the transition towards design with a positive impact.

Building a Business Case

A common misconception is that sustainable strategies, including to reduce embodied carbon, are more expensive. However, reducing carbon does not have to increase project budget and, if planned for appropriately, can even drive down costs. The following strategies synergize optimal outcomes in both embodied carbon and cost.  

1. Use Less Material 

• As much as 40%–60% of embodied carbon in building frames could be eliminated with 10%–20% frame cost savings by choosing simpler building forms, appropriate decking systems, and optimized beam sizes. 

• Exploring these options in Concept with the engineers will allow determination of critical factors such as building layout and structural grid.  

 2. Increase Utilization and Enable Adaptive Reuse 

• Designing flexible programs for the spaces will improve asset value, allows for a new use without major renovation, and saves carbon by minimizing future demolition and reconstruction. 

• On UC campuses, there is also the need to retrofit existing buildings for seismic resilience. Extending the life of the building is aligned with reducing the need for new construction. 

 3. Low-Carbon Materials  

• Structural materials such as mass timber have a large embodied carbon advantage over steel and concrete, and can save on construction times, labor, and hard costs. However, the cost benefit should be considered in tandem with possible insurance premiums and additional code inspections.  

• Concrete with high SCM content, does not always have a cost-premium especially when working with Central Concrete. Competition among suppliers for low-carbon concrete should be encouraged.  

 4. Market Wins and Industry Leadership 

• The higher education sector as a whole is increasing its sustainability standards, including in health, carbon, and circular design. It draws in investments, national recognition, and upholds responsibilities to students. The generation entering the higher education system are more likely to look to sustainability criteria as a factor of differentiation.  

For more information on creating the business case, see The Business Case for Reducing Embodied Carbon: 9 Investments Commercial Real Estate Developers Can Make Today - RMI.