Achieving global policy ambitions like the ones set in the 2015 Paris Agreement will require leadership from the private sector, but individual companies with strong internal climate commitments can't go at it alone. They are hamstrung unless other businesses in their ecosystem follow through with similar pledges. To accomplish this, companies need policies that require the cooperation of external stakeholders at every step of the value chain.
For those of us in the real estate sector, the concern always seemed to be less about the cause of our manmade carbon footprint and more about cost. For years, we have seen rising sea levels and extreme weather events happening around us, putting property portfolios at risk. The economic and physical changes have affected insurance industry volatility, impacting construction and long-term investment prospects.
Real Estate Operators in denial
However, many in the industry have yet to admit that buildings are as responsible for carbon as cars. The real estate industry makes up 49% of global carbon emissions when accounting for construction and building performance. Most carbon reduction efforts in the building sector have focused on operational efficiency — energy sources for keeping buildings at an ideal temperature, lighted, ventilated, and powered — so that properties consume as little energy as possible.
And while these efforts have furthered the industry's goal of getting buildings closer to net-zero operationally, we can no longer ignore that building materials account for half of a building's total lifetime carbon footprint.
We are out of time. And the real estate industry's wait-and-see approach is no longer acceptable. Embodied carbon — emissions associated with the manufacturing, transport, construction, and disposal of building materials — must become a priority for the entire industry value chain.
With commercial buildings, concrete and steel have traditionally been used for construction, along with other frequently used carbon-intensive materials like foam insulation, plastics, and aluminum. However, building with structural wood has increasingly gained traction as an alternative, given that it sequesters more carbon than it emits.
Developers are becoming aware of its versatility and sustainability, and if adopted on a global scale, mass timber could challenge steel and cement as the preferred materials for construction. Additionally, structural engineers have already successfully used recycled steel and low-carbon cement consisting of alternative mixtures. This, combined with using more unpolished and salvaged materials, has already proven to lower buildings' carbon footprints.
And since nearly 75% of all raw materials in the US are used for the construction of buildings, the conscious decisions about the sourcing, construction, and finishing of our development projects will have a lasting environmental impact.
If all parts of the real estate ecosystem — including architects, owners, developers, investors, constructors, and material suppliers — move toward a net-zero ambition, together, they could save 10 billion tonnes of CO2 from the atmosphere. This is the equivalent of removing nearly 2.2 billion gas-powered cars from the road for an entire year. There must be global net-zero building standards across major market participants, investors, developers, designers, and occupiers to drive demand. We must also create policies that demand energy suppliers provide access to low-carbon alternatives.
This era of reducing the embodied carbon in building materials will change the construction and real estate development. We have entered a critical period for humanity. Carbon-neutral statements, science-based targets, and promises at international forums like the UN Climate Change conference will not suffice. Tangible and immediate action is the only solution.