The Business Case for Reducing Embodied Carbon: 9 Investments Commercial Real Estate Developers Can Make Today

The document argues that reducing embodied carbon—which accounts for an estimated 11% of global emissions—is a necessary technology transition that must be completed by 2050. It presents a business case for developers, noting that embodied carbon often comprises a substantial part of Scope 3 emissions and that failure to adopt low-carbon practices could lead to stranded assets. The guide divides recommendations into building-level strategies (reducing material use, increasing utilization, switching to low-carbon materials, and designing for disassembly) and corporate-level strategies (institutionalizing practices, prioritizing retrofits, marketing successes, reporting Scope 3 emissions, and aggregating demand through buyer coalitions).

• Reducing material quantities through integrative design can lead to significant cost savings and carbon reductions. Specifically, choosing simpler building forms and optimized beam sizes can eliminate 40%–60% of embodied carbon in building frames while reducing frame costs by 10%–20%.
• Switching to low-carbon materials can be cost-effective; some alternatives offer 19%–45% embodied carbon savings for a premium of less than 0.5% of total project cost. Recycled steel from electric arc furnaces is generally cost-neutral, and certain supplementary cementitious materials can replace cement at a negative cost.
• Prioritizing retrofits over new construction significantly reduces embodied carbon, as new builds generate two to four times more embodied carbon. Deep energy retrofits can recoup their embodied carbon immediately if carbon-storing materials are used, or within seven years using conventional materials.
• Designing for disassembly (DfD) and component reuse can reduce the embodied carbon of new construction by up to 20%. While DfD may increase up-front design and material costs, it can increase net asset value by reducing future deconstruction liabilities and allowing for the sale of elements to secondary markets.
• Embodied carbon represents a significant transition risk for developers, as it makes up a large portion of Scope 3 emissions, which can account for up to 90% of a developer's total Scope 1–3 emissions. Failure to adapt may lead to stranded assets and reduced access to capital.
• Increasing building utilization through co-living, co-working, or multi-use programming increases profitability per unit of embodied carbon. Co-living, in particular, can offer expected yields of 4%–5% and fast lease-up rates.

APA

RMI (2024). The Business Case for Reducing Embodied Carbon: 9 Investments Commercial Real Estate Developers Can Make Today. https://rmi.org/resources/the-business-case-for-reducing-embodied-carbon-9-investments-commercial-real-estate-developers-can-make-today/

Chicago

RMI. The Business Case for Reducing Embodied Carbon: 9 Investments Commercial Real Estate Developers Can Make Today. 2024. https://rmi.org/resources/the-business-case-for-reducing-embodied-carbon-9-investments-commercial-real-estate-developers-can-make-today/.

Wikipedia

{{cite report |author=RMI |title=The Business Case for Reducing Embodied Carbon: 9 Investments Commercial Real Estate Developers Can Make Today |date=25 July 2024 |url=https://rmi.org/resources/the-business-case-for-reducing-embodied-carbon-9-investments-commercial-real-estate-developers-can-make-today/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2024business, author = {{RMI}}, title = {{The Business Case for Reducing Embodied Carbon: 9 Investments Commercial Real Estate Developers Can Make Today}}, institution = {RMI}, year = {2024}, month = jul, url = {https://rmi.org/resources/the-business-case-for-reducing-embodied-carbon-9-investments-commercial-real-estate-developers-can-make-today/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }