When we talk about 39% of the world’s emissions coming from the built environment, we often focus almost exclusively on those emissions that result from our operations. But there is a rest of the story here. Depending on who you ask, anywhere from 30 to 50% of the emissions from the built environment are actually due to the way we build our buildings. If you are leading an ESG program in an organization that does development, embodied emissions need to be a part of your ESG program.
First, a little history, in the early 1990s, a committee looking at new construction began exploring the idea of a “green building,” promoting a more holistic and integrated design process that recognized the environmental impacts of new construction. What emerged from that committee we now call LEED. While LEED has evolved significantly since version 1, one thing that version 1 did emphasize was the importance of materials and resources and their contribution to the environmental impact of the development. As LEED evolved, the emphasis tilted more towards operational impacts, but those early efforts resurfaced in 2018 in the form of a conversation around embodied carbon.
The conversation around Embodied Carbon concerns the materials used in creating our buildings, including the impacts of material extraction, manufacturing, and transporting those materials to the job site. Particularly in the life of a new building, the bulk of the emissions are directly attributable to the construction of the development instead of the operations that result from the development. Especially as we stare at a deadline of 2050 and the urgency of reducing our impact before this date, these emissions will play a massive role in the general trajectory of the overall global emission reduction. Think of it as a snowball rolling down a hill; the longer it rolls downhill, the more momentum it has and the greater the amount of snow it carries when it finally reaches the bottom of the hill. Essentially we are adding additional greenhouse gasses to offset with the design of every new building. That snowball just gets bigger, essentially fighting against the progress we are making in operational reductions. If we do not include the consideration of embodied carbon into our overall climate strategy, the bottom line is we will not meet our targets.
So what does this mean to sustainability professionals? It means we have a more prominent role to play in ensuring that our strategy includes not just operational impacts, but supply chain impacts as well. This means we must engage and work with designers, architects, and procurement to require the inclusion of supply chain impacts when acquiring building materials and designing specifications. It means evaluating both the products and the vendors providing those products, a holistic view of the entire process.
Let’s think a moment about the largest retailer in the world. While we all hear about the second largest retailer, Amazon, the largest still remains Wal-Mart. Fifty-eight years ago, Sam and James “Bud” Walton founded this giant, and their secret sauce to building it into the organization that in 2019 grossed nearly 519 billion dollars in revenue? It boils down to relentless and precise management of inventory and, specifically, their supply chain. James Crowell, Director of the Supply Chain Management Research Center at the Walton College of Business, has said, “I don’t believe there is a university in the world that doesn’t talk about Wal-Mart and the supply chain.”
As early as 2009, Wal-Mart launched its Sustainability Index, essentially a supplier questionnaire. This index goes beyond asking suppliers for the price of their product; it also gathers and analyzes information about a supplier’s approach to managing its social and environmental impact on the full life cycle of the products it is supplying.
At the heart of the supplier questionnaire are essentially three questions:
Do you measure and set goals for your environmental impacts?
If so, what impacts are you measuring, what are your goals, and are they consistent with recognized standards?
Do you know if your suppliers are doing the same?
By taking the lesson taught by arguably the most successful supply chain manager in the world, this same concept can be applied in our own ESG programs to address embodied carbon. We already ask suppliers for their price; we typically ask for their terms and conditions; why are we not asking if they can also support our sustainability goals? Why are we not asking if they are working towards our goals or against our goals in their own organizations?
Fortunately, the reemergence of evaluating materials and resources has resulted in new tools being developed that can be added to our supplier questionnaires to help further identify where embodied carbon is entering into portfolios. To get a general idea of what embodied carbon is, several free resources are available, such as the Bath Inventory of Carbon and Energy (ICE). The Carbon Leadership Forum is also an excellent place to begin understanding what embodied carbon is, how to identify it, and how to reduce it.
As you become more familiar with embodied carbon, the tool of choice is the Environmental Product Declaration (EPD). Just as LEED initiated the conversation around materials and supplies many decades ago, the green building certification program has again emerged as a thought leader through LEED v4 with changes to Materials and Resources Credits that address embodied carbon and importantly outline the use of the EPD as a tool to conduct this analysis.
Back to our role in identifying and reducing the impact of our portfolios, this all comes full circle in the development of metrics around measuring the impact of embodied carbon in our assets. Through the tools discussed: surveys, EDPs, and specifications, we can start to measure and assign reduction targets to our embodied carbon.
This requires ESG leaders to collaborate within their own organizations. Chances are we have likely become comfortable talking to operations about efficiency improvements, and in many organizations, we have established relationships with the asset managers. However, have you established a relationship with procurement? If your organization also develops properties, how about the design team? Establishing these relationships will be critical in evaluating the impact of the supply chain on your organization.
Getting data is a crucial step, and when it comes to embodied carbon, education and collaboration will also be critical components. The survey concept is one way to start to get data. Organizations that are tracking both operational carbon impacts and embodied carbon impacts are organizations differentiating themselves from their competition. When investors are looking at where their funds will be responsibly invested, a more holistic approach will inspire more confidence.
You can help reduce the impact of the built environment by sharing this blog with your peers. Together we can impact the 39% of greenhouse gasses attributed to the built environment. It starts with awareness, and we succeed with teamwork.
Stay well!
Chris Laughman is the ThirtyNine Blog author, a blog dedicated to reducing the impact of the built environment. When not blogging, Chris is helping the real estate industry reduce energy and water impact as the Vice President of Sustainability for Conservice, the Utility Experts. Whether Multifamily, Single Family, Student Housing, Commercial, or Military, we simplify utility billing and expense management by doing it for you. Our insight into your utility consumption provides an opportunity to identify risks. Leveraging innovation and experience, we ignite solutions with real impacts and track performance to ensure the trendline stays laser-focused on the goal. At Conservice, we have developed a true bill-to-boardroom solution to help truly make a difference. We have before us a tremendous opportunity. Standing shoulder to shoulder, we will get this done. Contact me at claughman@conservice.com for more information.
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