Architecture 2030 estimates that between 2020 and 2060, the world will experience the largest wave of urban growth in human history. During these 40 years, the global building stock is expected to grow by approximately 241 billion square meters of new floor area. To put that into perspective, that is like adding an entire New York City to the world every single month for the next 40 years.  

The scale of this anticipated growth highlights the importance of understanding the full climate impact of buildings and projects being designed and developed today, as the financial and investment consequences of overlooking a building’s total lifetime carbon footprint can be costly. 

Thus, embodied carbon has taken on a growing role in the construction and real estate sectors as a meaningful measurement that investors and other stakeholders can use to make decisions before and throughout the construction process. 

Why This Matters 

• The importance of embodied carbon is growing as the real estate industry works to reduce operational emissions. 

• GRESB predicts that embodied carbon will become an increasingly large portion of annual emissions as operational energy efficiency improves and other factors, such as electricity grids, become less carbon-intensive. 

• Measuring embodied carbon improves sustainable decision-making, allowing developers and investors to compare design options, evaluate materials, and plan ahead to reduce emissions. 

Embodied Carbon as a Lifecycle 

When most people think about carbon emissions from buildings, HVAC systems and electricity are typically the first things that come to mind. Whether it is heating, lighting, or other day-to-day operational activities, these functions do indeed contribute to a building’s carbon emissions. 

However, these operational emissions are only part of the picture. Beyond the more obvious emissions associated with operating a building is another category tied to the building’s materials, construction, maintenance, and eventual deconstruction. 

According to GRESB’s overview of embodied carbon in real estate, embodied carbon refers to greenhouse gas emissions associated with the materials and construction processes throughout a building’s lifecycle. This includes emissions from material production, transportation, construction and installation, maintenance, replacement, renovations, and eventual demolition, measured in carbon dioxide equivalents. 

The Global Alliance for Buildings and Construction (GlobalABC) similarly emphasizes that a building’s carbon footprint is the combination of its embodied and operational emissions. An approach that considers the whole lifetime of a building is therefore necessary and more effective in helping understand how decisions made during design and construction can determine a building’s emissions throughout its lifespan.  

How Embodied Carbon Differs 

Unlike the carbon emissions generated through typical building operations, embodied carbon is largely associated with the physical building and materials. Key construction materials such as concrete, steel, aluminum, and glass all result in emissions due to their extraction, production, transportation, and eventual disposal. 

Embodied carbon occurs at many stages of a building’s lifecycle. As described by GRESB, upfront embodied carbon includes emissions associated with producing construction materials, transporting them to the project site, and then actually carrying out the construction. These upfront emissions represent the largest portion of embodied carbon across a building’s lifecycle and are effectively “locked in” once construction is completed. Thus, early planning and proactive consideration are especially important, hopefully mitigating and accounting for future consequences. 

GlobalABC further differentiates embodied carbon from operational carbon by associating embodied carbon with the emissions generated before any construction even begins and during the construction itself. This includes the extraction of materials, the manufacturing processes, and even the transportation of materials. On the other hand, operational carbon is generated through the daily function and maintenance of a building (after it’s been built).  

The Carbon Leadership Forum’s report on embodied carbon in common building materials emphasizes that reducing embodied carbon can be incorporated into the decisions developers already make involving design, procurement, and construction. Developers can establish embodied carbon requirements early and work with contractors and suppliers to find and incorporate lower-carbon alternatives. These early decisions are particularly important because many opportunities to reduce upfront embodied carbon no longer exist after materials are selected and construction begins. The report also highlights the importance of making embodied carbon reduction a consistent part of projects rather than a one-time sustainability initiative. 

Ultimately, the importance of embodied carbon is growing as the real estate industry works to reduce operational emissions. GRESB reports that the built environment generates approximately 42% of annual global greenhouse gas emissions, with 27% coming from building operations and 15% from building materials and construction processes. GRESB predicts that embodied carbon will become an increasingly large portion of annual emissions as operational energy efficiency improves and other factors, such as electricity grids, become less carbon-intensive.  

Other organizations may use different measurement definitions and methodologies. For example, the American Council for an Energy-Efficient Economy (ACEEE) cites figures indicating that buildings and construction accounted for approximately 39% of global energy-related carbon emissions in 2018, with 11% associated with embodied carbon. 

While exact percentages differ slightly due to methodology and accounting measures, it is clear that reducing operational emissions alone will not result in net-zero emissions from the construction industry. 

Embodied Carbon as a Measurement 

In its 2025 Real Estate Assessment, GRESB reported that 50% of development participants were measuring embodied carbon emissions from new construction assets and major renovation projects. That compares with 31% in 2024 and 24% in 2023, highlighting the market’s understanding of embodied carbon as a meaningful tool for measurement and consideration. 

Embodied carbon as a measurement results in better decision-making as once developers and investors understand a building’s embodied carbon estimates, they can compare design options, evaluate materials, and plan ahead to look for opportunities to reduce emissions. 

Embodied carbon can also inform investment decisions. GRESB highlights the relevance of embodied carbon in a legal and financial context, especially in regard to acquisitions and due diligence, particularly since buildings often change ownership throughout their lifetimes. 

What’s Next for the Industry? 

Reducing embodied carbon requires proactive intervention and decision-making throughout the development and investment lifecycle. 

For new construction, developers can search for less carbon-intensive materials, optimize designs, reduce unnecessary material use, and consider reuse or recycled content where appropriate. The RMI Business Case for Reducing Embodied Carbon lays out nine investment strategies and notes the benefits of reducing embodied carbon as it can both cut development costs and provide a competitive advantage.  

For existing buildings, owners should consider whether renovation or reusing the space somehow could be preferable to demolition and reconstruction. RMI specifically highlights a “retrofit first” approach as a possibility for developers to reduce embodied emissions while also meeting demand for usable space.  

The industry can also look at embodied carbon through the financial/investment perspective. RMI’s Embodied Carbon Investment Guide reinforces the role investors can play in accelerating market transformation by incorporating embodied carbon considerations during their investment consideration. It also provides investors with strategies for incorporating embodied carbon into investment decision-making, such as through reporting, procurement, retrofits, and engagement with developers and other stakeholders. 

Moving Forward 

Embodied carbon shows how a building’s environmental impact begins before the first light is turned on and continues all the way until the end of the building’s lifetime. Crucially, decisions made by considering the embodied carbon emissions that will be generated throughout the entire lifetime of a building can greatly benefit a project’s overall carbon footprint before even beginning. 

As the industry moves toward net-zero emissions, measuring and incorporating embodied carbon into the before, during, and after of a construction project can benefit the environment, the efficiency, the investors, and ultimately, the project itself.