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Cash in on Low Carbon Construction
The Business Case for Sustainability
< 1 minute read
Michael Davies, Head of Innovation and Carbon Reduction at AG, examines the construction industry’s pivotal role in addressing one of the most pressing challenges of our time: climate change. With the built environment responsible for a significant share of global carbon emissions, he highlights the urgent need to tackle embodied carbon and adopt sustainable practices. By doing so, businesses can not only drive meaningful environmental change but also unlock opportunities for leadership, innovation, and long-term financial success.
The built environment accounts for 39% of global carbon emissions, with 28% stemming from operational emissions—traditionally the primary focus of carbon reduction efforts—and the remaining 11% attributed to embodied carbon. Embodied carbon arises from the extraction of raw materials, manufacturing, construction, and demolition processes. Unlike operational carbon, it cannot be directly reduced once released and can only be offset.
These figures highlight the urgent need to rethink conventional practices and cut emissions across a building’s entire lifecycle, from design to demolition.
To address this, the World Green Building Council has set ambitious targets. By 2030, all new buildings, infrastructure, and renovations must achieve at least a 40% reduction in embodied carbon. By 2050, the aim is for all buildings—both new and existing—to achieve net-zero operational carbon, with new constructions and renovations also reaching net-zero embodied carbon. Embracing low-carbon construction practices is not only vital for meeting these targets but also presents a significant business opportunity for innovators within the industry.
Source: World Green Building Council
The Role of
Embodied Carbon
To achieve net-zero emissions, action must be taken at every stage of a building’s lifecycle. While operational carbon (emissions from heating, cooling, and powering buildings) has long been the focus, embodied carbon is now recognised as a critical factor in decarbonisation efforts.
In the UK, embodied carbon currently accounts for around 20% of emissions from the built environment, and projections suggest it will surpass 50% by 2035. This shift underscores the growing urgency of addressing embodied carbon, particularly as it remains largely unregulated.
While the UK government has made strides in regulating operational carbon—such as the 2022 updates to Building Regulations—embodied carbon has not received the same attention.
The Future Homes and Future Buildings Standard, set to take effect in 2025, aims to address operational carbon, but embodied carbon must also become a central focus to meet both national and international climate goals.
The UK Green Building Council (UKGBC) has called for stronger regulation and consistency in measuring and reporting embodied carbon. To achieve the UK’s 2050 net-zero target, the industry must prioritise transparency, set clear standards, and invest in educating carbon assessors.
Sources: UK Green Building Council | McKinsey & Company
Transparency Through EPDs
Reducing embodied carbon begins with a clear understanding of the emissions associated with materials, design choices, and processes. Achieving this requires a commitment to modelling and reporting embodied carbon, fostering greater transparency across the sector.
Environmental Product Declarations (EPDs) are among the most effective tools for this purpose. These independently verified documents provide comprehensive data on the environmental impact of construction materials throughout their lifecycle. They empower architects, designers, and contractors to select materials with a lower carbon footprint.
EPDs also help optimise building lifecycles. By revealing where emissions are concentrated within materials, project teams can identify opportunities for improvement. Comparing EPDs for different products enables stakeholders to select alternatives that mitigate environmental impact while enhancing project sustainability.
The Circular Economy
Reducing embodied carbon is closely tied to embracing the principles of the circular economy. Reusing, recycling, and designing for durability are key strategies for minimising waste, lowering emissions, and reducing demand for new resources.
Material reuse is among the most effective methods for reducing embodied carbon. Reclaimed aggregates, recycled content, and salvaged materials from existing buildings significantly lower the carbon footprint of new construction. For instance, reusing steel can cut embodied carbon by up to 97.5% compared to producing new steel.
Substituting carbon-intensive materials like cement with Supplementary Cementitious Materials (SCMs) also reduces emissions while repurposing industrial by-products.
Product innovation plays a vital role here. Developing and integrating secondary materials like SCMs improves material efficiency, while designing for disassembly ensures that materials can be recovered and reused. Bio-based materials, such as timber, offer additional benefits by sequestering carbon during growth, making them effective alternatives to carbon-intensive options like steel.
Source: European Metal Recycling Ltd
The Commercial Impact
Sustainability in construction is not just a moral obligation; it is also a powerful driver of business success. Buildings that meet recognised sustainability standards, such as BREEAM or Passive House, consistently outperform conventional properties in the market.
For example, BREEAM Outstanding-certified buildings can achieve rental premiums of up to 12.3% over standard buildings, illustrating the financial benefits of green construction. BREEAM certification also reduces operational costs, enhances building durability, and improves occupant satisfaction, with utility savings often delivering paybacks within 2–5 years.
Similarly, Passive House standards prioritise energy efficiency, lowering operational costs and increasing building resilience. The rising demand for energy-efficient, low-carbon spaces in both residential and commercial markets makes such buildings attractive investments.
Of those surveyed, 54% cited cost as the primary obstacle to achieving net zero. This was closely followed by a lack of awareness of innovative products, which 52% identified as a key issue. Resistance to change and a lack of third-party verification also emerged as significant challenges.
Notably, the majority of participants reported using 20% or less innovative new materials in favour of traditional options. This reveals a gap between the industry’s intentions and the reality of implementation, which needs to be addressed.
However, sustainability doesn’t have to cost the earth. Innovative low-carbon products can offer cost-effective alternatives. For example, replacing natural granite with paving that incorporates secondary materials can significantly reduce the carbon footprint of public realm and commercial projects. This demonstrates that embracing innovation can deliver both environmental and financial benefits.
Sources: McKinsey & Company | Futurebuild
The construction industry stands at the forefront of global efforts to combat climate change. By addressing embodied carbon, embracing sustainable practices, and fostering innovation, the sector can transform itself from a significant carbon emitter into a leader in climate action. Collaboration across the entire value chain—manufacturers, architects, contractors, and clients—is key to embedding sustainable practices and driving meaningful change.
The choices we make today will shape the future of our built environment. By committing to low-carbon practices and sustainable innovation, the industry can exceed regulatory expectations, meet evolving market demands, and unlock substantial financial benefits. This is an unprecedented opportunity to lead by example and demonstrate that a greener, more sustainable construction industry is not only possible but also commercially rewarding. The time to act is now.
Learn more about how AG is dedicated to leaving behind a Low Carbon Legacy.