Beyond Energy Efficiency

How a focus on low carbon materials can set your green building apart

As energy-efficient green buildings and their associated certifications like LEED have become table stakes for high-performance buildings, asset owners are struggling to set themselves apart in an increasingly green market. One way to stand out is to reduce embodied carbon by using low carbon materials.

Embodied carbon is the carbon associated with a building’s entire lifecycle, other than carbon from its annual energy consumption. It is emitted by various processes all along the supply chain. According to current trends, embodied carbon is expected to be responsible for almost half of total new construction emissions globally between now and 2050. In real estate, most embodied emissions are released into the atmosphere during the manufacture of construction materials, before a building is occupied. Consequently, the desire for low carbon materials like mass timber, low-carbon concrete, and recycled aluminum is growing as more asset owners look to ‘green’ their portfolios.

Reducing embodied carbon emissions can have more benefits than just helping to fight climate change. Focusing on reducing your project’s embodied carbon footprint can simultaneously future-proof your building to intensifying regulations and increase its appeal to the market, tenants, and investors. Below, we explore these benefits further; describe the main steps for addressing embodied carbon; and shed light on the various options for green building standards and certifications that reward embodied carbon efforts.

Minimizing embodied carbon helps companies achieve certification under various green building certifications and standards (“green standards”). These standards can come with rewards and can signal to stakeholders that a building has low environmental impact and that the owner is committed to climate action. This is important as tenants and investors alike are beginning to demand that companies from all sectors treat climate change with greater urgency.

The regulatory landscape is also driving the move towards embodied carbon. Building codes are setting increasingly stringent requirements related to energy performance, carbon emissions, and overall environmental impact. For example, New Zealand recently released a voluntary Whole-of-Life Embodied Carbon Emissions Reduction Framework for measuring, managing, and reducing embodied carbon emissions. It was published by the Ministry of Business, Innovation & Employment, demonstrating that climate action is considered an ingredient for economic competitiveness. We expect more countries to develop similar frameworks, or other requirements for embodied carbon reductions, as they get serious about minimizing their building and construction sectors’ emissions.

4 steps to addressing embodied carbon

Low carbon materials can be procured as a stand-alone climate initiative and don’t need to be part of a larger certification effort. Either way, there are four key steps to addressing embodied carbon: measure, reduce, offset, and disclose.

1. Measuring the embodied carbon ‘footprint’ is often the largest hurdle because various pieces of information are required which are often not readily available. This step involves quantifying materials and identifying carbon emissions from various stages of each of your project’s materials’ lifecycles. This usually means using life cycle assessment tools such as One Click LCA, the Athena Impact Estimator for Buildings, or EC3.
2. After calculating the embodied carbon footprint associated with your design’s new materials to be procured, the next step is to reduce it where possible. There are many strategies for doing this. Using less materials, reusing materials, and switching to lower-carbon or bio-based materials are just a few examples. The aim of this step is to make your embodied carbon footprint as small as possible before moving on to offsetting.
3. Once you’ve minimized your embodied carbon you will need to use carbon offsets or removals to reach your emissions target. For example, if you are aiming to achieve net zero, you may choose to invest in carbon offset and/or carbon removal projects to reduce the remaining footprint of your project. This could mean investing in energy efficiency or renewable energy (in the case of carbon offsets) and carbon sequestration (in the case of carbon removals).
4. The final step in the process is disclosure. Being transparent about the quantification methodology used and the size and profile of your emissions – scope 1, 2, or 3 – can signal to the market your seriousness about taking climate action and help attract the interest of investors and stakeholders. There are reporting frameworks to help guide you through the disclosure process, some of which are explored below.

Not all green building standards are created equal

In the past, early adopters of green standards had a competitive advantage over their peers. As more developers look to green standards to demonstrate their commitment to climate action, the green building market is becoming crowded. Focusing on embodied carbon presents a unique opportunity to those hoping to separate themselves from the pack as climate leaders.

Most certifications are starting to recognize embodied carbon reductions, as highlighted below. If any of these certifications are on your radar, consider including embodied carbon in your certification strategy.

LEED v4.1

Leadership in Energy and Environmental Design, or LEED, is perhaps the most widely recognized green standard globally. It certifies buildings based on a variety of environmental and occupant-focused factors. This means that LEED certification is attainable through a combination of environmental and social measures.

Only 35% of the available LEED credits are in the “Energy and Atmosphere” category, and project teams can choose which LEED credits they target. Two LEED Gold buildings might appear to be identical due to their ‘Gold’ certification levels, but one might have impeccable energy performance (achieving all the Energy and Atmosphere credits) whereas the other could have been certified with only a minimal focus on energy efficiency.

In its most recent update, LEED v4.1 made many changes (see our dedicated article here), including the introduction of new pathways for being awarded the Building Life-Cycle Impact Reduction credit (option 4: Whole-building Life Cycle Assessment). Under this update, one point is achievable for measuring your embodied carbon even if it is not reduced or offset. Additional points, up to five total, can be achieved for demonstrating embodied carbon reductions when compared to a typical baseline building. Projects targeting LEED that also want to show they are taking strong action to reduce carbon should consider targeting this credit in addition to operating energy efficiency credits.

Zero Carbon Building Standard v2

The Canada Green Building Council (CaGBC) developed the Zero Carbon Building (ZCB) Standard in 2017, with v2 launched in 2020. It is specifically focused on buildings that are designed to be net-zero carbon. The ZCB Standard focuses on the carbon balance –the sum of operational and embodied carbon less any carbon offsets and avoided emissions – of a building across its entire life cycle.

The ZCB Standard v2 has two pathways: ZCB-Design and ZCB-Performance. Certification under the former is obtained before building construction begins and is meant to guide applicants through the design process for new buildings or retrofits. The ZCB-Design Standard requires that an annual carbon balance of zero or better be demonstrated for the building using an energy model.

The ZCB-Performance Standard certifies buildings based on their performance in maintaining a zero-carbon balance or better over a 60-year building life cycle. Additionally, all embodied carbon must be offset within 5 years of construction. Verification under this pathway is done on an annual basis.

BOMA BEST

BOMA BEST, Canada’s largest environmental assessment and certification program for existing buildings, is another popular certification for commercial buildings across Canada. Like LEED, it certifies buildings based on a broad set of environmental and energy performance metrics.

BOMA BEST 3.0, the latest version, requires that policies be in place for selecting building materials for multi-unit residential buildings and health care facilities (it is not required for other building types, such as offices or industrial buildings). This requirement can be met through a variety of means, such as salvaging reusable materials during demolition, or specifying materials with high recycled content and/or low “embodied energy” in construction and renovation guidelines.

While all these measures would likely reduce embodied carbon emissions, this is not explicitly stated as the goal for this requirement. Rather, it aims to “reduce any potential negative impact on the environment”. Failure to meet this requirement would result in ineligibility for any level of BOMA BEST certification.

GRESB

The Global Real Estate Sustainability Benchmark (GRESB) is not a certification or a standard. It is a benchmarking system that provides a framework for measuring and reporting the environmental, social, and governance (ESG) performance of real estate and infrastructure projects. GRESB-compliant reports are a way for real estate and infrastructure asset managers to transparently showcase their commitment to green building and benchmark their performance against industry peers.

Companies with certified (LEED, BOMA Best, or other) assets will commonly prepare GRESB-compliant sustainability reports to highlight their green actions. Some GRESB categories related to carbon reductions and transparency provide an opportunity to highlight embodied carbon reductions, which is a type of scope 3 emission.

Envision

Envision is unique among this list in that it is solely dedicated to assessing sustainability and resilience in infrastructure projects. Developed by the Institute for Sustainable Infrastructure, Envision verifies projects based on sustainable approaches to all stages of an infrastructure’s lifecycle, from planning/design to end-of-life.

Envision awards one credit specifically for reducing net embodied carbon emissions. However, achieving embodied carbon reductions would likely unlock several other credits in a variety of categories. Credits for long-term maintenance and end-of-life planning, greenhouse gas emissions reductions, sustainable procurement practices, and sustainable material considerations could all be at least partially satisfied by enacting embodied carbon reduction measures.

Just as with LEED and BOMA BEST, Envision has several levels of certification. Reducing the embodied carbon footprint of your infrastructure project could elevate it to the next level, raising your profile as a green infrastructure developer.

GRESB Resilience Module + TCFD

GRESB developed the Resilience Module reporting framework in 2018 with two aims in sight. The first is providing investors with more information on the resilience of real estate and infrastructure companies/funds. The second is providing information that these companies can use to identify, assess, and manage climate-related risks. It was updated in 2019 and again in 2020 to increase its alignment with another popular climate reporting framework, the Task Force on Climate-related Financial Disclosures (TCFD).

2020 has seen financial regulators and institutional investors increasingly seeking TCFD reporting from companies. The New Zealand government recently became the first country to require mandatory TCFD reporting for some companies starting in 2023. Canada has also made significant strides towards making TCFD reporting the norm in public company disclosures:

• The Canadian Securities Administrators encourages public companies to disclose climate risks in accordance with TCFD or another recognized standard;
• The Government of Ontario’s Capital Markets Modernization Taskforce recommends that the Ontario Securities Commission mandate TCFD- or SASB-compliant disclosures; and,
• The Government of Canada requires Large Employer Emergency Financing Facility (LEEFF) program recipients to issue TCFD-compliant reports.

Although the GRESB 2020 Resilience Module is not designed as a fully TCFD-compliant disclosure, it shares many indicators with TCFD. So, a report compliant with the GRESB 2020 Resilience Module is well on its way to being TCFD-compliant. Beyond GRESB, taking action on embodied carbon (be it measuring, disclosing, reducing, or offsetting) is climate action that could be included in TCFD reporting to show your organization is serious about climate, and to ensure investors and lenders know it!

Tell your story: SE2050 Commitment

It’s important to tell your climate story and let others know about the climate action you’re taking. Reporting and certification are great starting points. But those looking for something more might consider making an added statement in the form of the Structural Engineers 2050 Commitment Program.

The SE2050 Commitment Program calls for signatories to commit to “creating a firm-wide plan to reduce the embodied carbon of [their] structural systems, tracking [their] progress, and evaluating and reducing the embodied carbon impacts of the design decisions [they] make on [their] projects”. Joining the SE2050 Commitment Program provides a platform for advertising your initiatives and spreading the message of the importance of reducing embodied carbon.

In an increasingly competitive green building market, it is a challenge to stand out. Obtaining green building certification and meeting green building standards is no longer enough to distinguish industry leaders. Prioritizing embodied carbon reductions can help lower your carbon footprint, increase your certification level, and show you’re taking action beyond simple energy efficiency. Measure, reduce, offset, and disclose. The time to act is now!

Contact us to help tackle your embodied carbon emissions

Mantle314 supports real estate investors, owners, and managers on leading edge climate-related topics including embodied (scope 3) carbon measurement and reduction, carbon removals/offset strategies, and disclosure/benchmarking aligned with frameworks including GRESB and TCFD. We also manage certification applications for a variety of standards, including LEED and the Zero Carbon Building Standard.

Contact us today to give your firm a competitive advantage on climate change.