This year’s climate summit, COP27, hosted by Egypt, is taking place at a tough time for global collaboration on all matters, such as global security, environment, energy, and most importantly, human survival. The geopolitical context has gone from tense to precarious, making any progress on averting the most devastating effects of climate change a daunting task.
This menacing global context should not mean that we are, collectively, bound for inaction. Quite on the contrary, across the world, businesses, cities, investors, citizens and policymakers are continuing to step up, raising their ambition and taking action to reduce emissions in line with global science-based targets to limit global warming to 1.5 °C.
No other sector shows more clearly than the built environment the challenges and the opportunities for collective action. Put simply, the built environment is where we live, work and spend our free time. It’s the buildings we occupy and the infrastructure we use to fulfill our daily needs.
The built environment makes up close to 40% of total global CO2 emissions (or 14 gigatons per year), more than half of total global resource consumption and one-third of total waste streams. Being very fragmented, with many different stakeholders taking part in decisions (public officials, users, investors, developers, construction companies, designers, material producers), the built environment can only be transformed to become net zero, resilient and more inclusive through deep and radical collaboration toward a common vision.
The upcoming 2022 Global Status Report for Buildings and Construction will provide the latest update on global emissions from the buildings sector. It is likely that, after a temporary drop in emissions in 2020 due to the global pandemic, in 2021, reported CO2 emissions from the building sector will reach again levels seen in previous years or increase even further. Growth in emissions is driven by rapid urbanization, with about five billion m2 of new floor area space added annually — the equivalent of building the size of Paris once a week. This massive growth outpaces marginal improvements in energy efficiency, leading to continuously increasing emissions.
Action to build to 2030 performance must start now
For the built environment to contribute its fair share of emissions reductions and stay within the 1.5°C degree warming limit, the following needs to be achieved: a halving of emissions by 2030 and net zero over the full life-cycle by or before 2050. More specifically, this means that by 2030 all new buildings should be “net zero carbon” in operation (no emissions from building energy use) and embodied carbon needs to be reduced by at least 40% (emissions associated with the materials and construction process) (Race to Zero 2030 Breakthrough and Marrakesh Partnership for Global Climate Action Human Settlements Pathway).
Building and infrastructure projects have extended lead times. It can take anywhere from a few years to 15-20 years to complete a project, from the initial planning stage to execution and operational start. This means that “2030 is today”. A project that is entering the planning stage in 2022-23 needs to target the required carbon performance for 2030 imperatively.
Achieving this is possible if all actors – from business, finance, policy and science – focus on the common goal and collaborate to achieve it. Our work shows that it is possible to immediately halve the up-front CO2 emissions associated with building projects, by setting explicit targets from the start of a building project, through collaboration along the value chain and by sharing data openly and widely. We discuss this in Net-zero buildings: Where do we stand? and in our upcoming report on how we can reduce upfront emissions through improved design and material choice strategies, to be launched shortly after COP27.
Today, only very few building projects calculate and report their full carbon footprint, which is a critical practice if we want to understand how to reduce all emissions over the life cycle of buildings. Yet, if owners, developers and investors start requesting Whole Life Carbon assessments, architecture, engineering and construction firms offer them in all their projects, and cities require them in their permitting and procurement procedures, then we could rapidly build up the evidence allowing for benchmarking and target setting and enable everyone to act to achieve them.
Signals of change
Some frontrunner design and engineering firms have announced global commitments (Arup, Ramboll), leading developers have published their net zero plans (British Land, Lendlease, NREP, Swire Properties), some cities such as London and New York have started demanding whole life carbon assessments on all projects, and national governments (e.g., Denmark, Finland) have issued strategies for sustainable construction to address full life-cycle emissions. And global firms, including Holcim, Saint-Gobain, ArcelorMittal and Stora Enso, have published their net zero commitments and action plans. The UN High-Level Champions for Climate Change are tracking progress on their 2030 call to action and in the run-up to COP27, they have documented important levers of change. Yet, to move at the required scale to halve emissions globally by 2030, we need unprecedented collaboration from all actors.
Strategies to systemically reduce up-front carbon emissions now
In an upcoming WBCSD report, developed in collaboration with Arup and to be launched shortly after COP27, we investigate potential strategies and measures that could be deployed toward halving the up-front emissions of building projects, also referred to as embodied carbon, by 2030. As demonstrated in our previous report, Net-zero buildings: Where do we stand?, buildings are generally becoming more energy efficient and embodied carbon can already account for more than 50% of the whole life carbon footprint of a new build or major refurbishment project. Notably, a significant component of this embodied carbon is the upfront carbon associated with the initial construction process, reaching the atmosphere at the very outset.
In our new report, we explore the impact of early-stage decision-making on the reduction of upfront carbon emissions of building projects. We also look in detail at all the individual building layers (as per WBCSD’s Building System Carbon Framework) to identify gains that might not seem significant in isolation but, when taken together, may aggregate to major reductions. Our analysis shows that with a holistic approach right from the start, we can reduce the up-front emissions of building projects by half vs. business-as-usual practice today.
Some key emerging findings may seem obvious but are still worth investigating further. For example, by consuming fewer resources in delivering the same desired function, we lower our carbon footprint in proportion to this reduction. Hence, we identify the prioritization of “using less stuff” as a clear outcome throughout the report.
Our key conclusions on how to reduce up-front carbon emissions in buildings are:
- Early thinking is essential. Informed, initial thinking will create the highest reduction potential.
- A systemic approach is required. There is no single solution. Through a collaborative engagement with the entire value chain, we can consider all aspects of design and their inter-relationships to gain the required reductions.
- Data will drive informed calculation and reporting as an enabler toward the most impactful actions. Because it is hard to manage what you can’t measure, data will allow us the confidence to treat carbon like we currently treat cost, setting clear budgetary targets.
Carbon must become a priority at the same level as cost to guide decision-making in building projects.
How to accelerate the transformation through finance and policy
Finance sector stakeholders, building owners and users, public sector stakeholders and regulators are demand-side actors (influencers) who can set requirements for low-carbon solutions across the full life cycle of built environment projects. This includes the energy performance of buildings and setting requirements to reduce emissions from building materials and the construction process.
Given the fragmented nature of the built environment value chain, the pressure from these demand-side actors will be critical for the transformation.
The financial sector can significantly influence the building industry to reduce emissions through their market decisions and transactions, thereby tackling financial institutions’ own “financed” emissions. To do so, however, we must acknowledge that conflicting goals may exist between different stakeholders. For many, revenue is based on growth and spending rather than harnessing (carbon) efficiencies. This calls for a system-wide structural change revolving around two critical questions that property developers, asset owners and managers, as well as lenders, currently face:
- What do we mean by “net zero” buildings, and how can we align financing decisions with this imperative?
- How do we integrate carbon performance into valuation processes and decision-making from a cost, value and risk perspective?
At WBCSD, we are collaborating with our partners in the BuildingtoCOP Coalition, Global Alliance for Buildings and Construction (GlobalABC) and many more to help answer these questions, which will be critical for existing and new financial instruments across lending and investment activities, including Green Bonds, listed equity, mortgages, etc. Reliable data and the effective communication of that data among stakeholders will lie at the heart of this question so that the financial sector can start aligning their investments with the imperative of halving emissions from building portfolios by 2030 and reaching “net zero” across the full life-cycle by no later than 2050.
For policy, we welcome the initiative of a Buildings Breakthrough initiated by the governments of France and Morocco and bringing together many countries members of the GlobalABC and beyond. The Breakthrough aims to set clear expectations for how buildings should perform by 2030. It will create a global network of countries that can share knowledge and inspire each other to implement policies, regulations and incentive schemes that work.
As WBCSD, serving in a co-chair role of the GlobalABC’s Steering Committee and Market Transformation Work Area, we stand ready to support the Buildings Breakthrough with our work and knowledge and that of our members and partners.
A call for collaboration
COP27 comes at a time of deep global divisions and conflicts. Yet, it also provides a unique opportunity to bring together governments, business, finance, science and civil society to break siloes and discuss how we can all work together to halve emissions in the critical decade to 2030.
Based on our systems approach and the knowledge and evidence we are providing to all market stakeholders, WBCSD calls on all our partners to deepen their collaboration with others and to start setting clear global targets across the buildings industry in line with the 2030 and 2050 reduction imperatives, including a valid approach to residual emissions based on a clear definition of “net zero” that takes into account a full life-cycle approach.
We also emphasize the Race To Zero call to action for the built environment asking for: “All actors in the built environment must collect, analyze and report data on whole-life carbon performance of any new build or retrofit project.”
Moving toward a more circular built environment will also be a key strategy to simultaneously reduce emissions and resource use, thereby safeguarding nature and enhancing people’s well-being.
We need to start now – 2030 is today.