Whole life carbon reporting for Europe’s buildings: Establishing a consistent methodology

With the costs of climate change growing in Europe, how is the region’s buildings sector going to drastically cut its life cycle carbon emissions? Tina Paillet FRICS, President Elect of RICS, hosted a recent webinar looking at the solutions to achieving increased whole life carbon reductions.

Looming deadlines

Climate change is already imposing heavy costs on Europe. Last year, drought in Europe led to 20 billion euros in costs. Soaring summer temperatures also resulted in an extra 20,000 heat-related deaths and wildfire activity was far above the average of the previous 15 years. Looking beyond the societal ramifications, the real estate sector cannot ignore such significant risks and impacts, says Tina Paillet FRICS, President Elect of RICS, and CEO and Co-Founder of Circotrade. The solution is as simple and complicated as reducing carbon emissions, she says.

Buildings are responsible for 40% of energy consumption and 36% of its greenhouse gas emissions in Europe, according to the EU. Nearly three quarters of EU building stock does not meet energy efficiency standards, yet over 85% of those properties will still be operating in 2050. The Energy Performance of Buildings Directive (EPBD) has been under revision in 2023, and is expected to tighten requirements for new buildings and mandate minimum energy performance for existing buildings.

‘We are seeing progress, but usually it's in a few percent of the market, so there is a massive need to upscale efforts’, says Julie Emmrich, Sustainable Finance Lead at the World Green Building Council. On the positive side, she notes there is growing understanding and investment around green buildings and decarbonisation transition pathways. However, Julie believes that the real estate market has not yet fully grasped the major risks that climate change poses to business operations, despite seeing the first indications of stranded assets.

The challenges ahead

‘The challenge is that efficiency gains are outpaced by construction growth, so we need to do much more to change the curve’, says Luca De Giovanetti, Senior Manager, Built Environment at the World Business Council for Sustainable Development. The reductions in carbon emissions are being countered by an increase in new buildings and space per capita, agrees Zsolt Toth, Team Leader at the Buildings Performance Institute Europe. To meet net zero emission and efficiency targets we need to put the appropriate design tenets into practice now, because the buildings we construct in 2030 are designed today, says Luca.  We must also reduce the construction of new buildings, refurbish rather than demolish and rebuild, and recycle and reuse as much as possible, adds Zsolt.

There needs to be a total step change in how we, as a society, tackle emissions and an increase in pace, believes, Amit Patel MRICS, Head of Professional Practice – Construction at RICS. ‘When we talk about net zero 2050, we have got to undo what we’ve done in the last one to two hundred years in the next 30 years’, he says. He agrees that we need to reduce the number of new buildings being built, but also deal with existing buildings better. This is because existing buildings continue to consume substantial amounts of carbon for heating, ventilation and operation. Are we making the best choices now for future generations, he questions, and what more could we do? He suggests looking more at sustainable sources of materials, energy consumption and its sources, and sharing data.

Policy, alignment, and the path to decarbonisation

Because European building policies have been mostly based on energy efficiency, there has been a lack of alignment between policy ambition and climate neutrality goals, says Zsolt. He believes this is changing with an appreciation of the need to better balance energy and energy efficiency metrics with carbon emissions, and preferably whole life cycle emissions, to provide a more complimentary approach. ‘Policymakers have recognised the need for a life cycle approach not just in terms of construction practices but also in terms of policy making. Up until now, we’ve had siloed, policy development, targeting product- and building-related emissions in a fragmented way’, he says.

A new EU Whole Life Carbon Roadmap is being developed (due to publish in the first quarter of 2024), which will act as a blueprint for future European building policies, says Zsolt. He believes this will provide important information on the interaction between the different legislation and guide policy and market actions with clear priorities and milestones for occupiers over the next three decades.

The EU Taxonomy is part of a sustainable finance policy package, says Julie. The suite of policies includes the Sustainable Finance Disclosures Regulation (SFDR) and the Corporate Sustainability Reporting Directive (CSRD), among others. These mandate transparency on investment and company economic activities respectively.

The EU Taxonomy sits in the middle of the SFDR and the CSRD and describes what constitutes a green investment or economic activity, says Julie. The Taxonomy aims to redirect finance flows in the European markets to put Europe on the path of a decarbonised and sustainable economy and society, she says. The Taxonomy does refer to whole life carbon, and specifically life cycle global warming potential. However, it only addresses buildings that are over 5,000m2 and only requires the disclosure of the data, without any carbon limits, she adds.

Better alignment on carbon is key to accelerating progress and comparability of emissions among countries, says Luca. Different interpretations or definitions on how to measure carbon or what is classified as a net zero building, causes confusion and duplication of efforts. For example, companies having to adjust carbon calculations on a country basis depending on national requirements, he says. Working on key alignment principles would allow basic comparisons to be made and once we have a common measure, many things can be achieved, says Luca.

Standardisation and data

We need standardisation, datasets and transparency within the market, says Amit. We need to compare country with country, city with city and asset with asset, he says, while acknowledging that we are still in the infancy of capturing data. We can then bridge the gaps, better understand how far upstream the design phase we need to be to ensure our buildings are as efficient as possible. By doing so, we can also reduce whole life cycle carbon emissions, he says. At the optioneering phase, evaluating choices around materials and systems such as HVAC will have the biggest impact, he adds. We are late to the game and need to act now and reduce as we go ahead, rather than wait for policy to fully form, he says.

‘Cutting emissions is tough, but before we can cut with confidence, we need to measure with consistency. A clear methodology that can inform surveys, project plans, investments and operations will be a vital step in understanding, reducing and mitigating our climate impacts’, concludes Tina.

RICS has published the second edition of its Whole life carbon assessment (WLCA) standard, effective from 1 July 2024. The standard is set to become the world-leading standard for consistent and accurate carbon measurement in the built environment.

Transforming the construction and building sectors is essential to hit climate neutrality by 2050. If the goal of the European Union is to be achieved, emissions must be drastically cut throughout the whole lifecycle of buildings, including both operational and embodied emissions. A consistent European methodology providing robust and credible benchmarks/baseline is therefore essential. Join us for an enlightening session organised by RICS, World GBC, WBCSD, and BPIE, where we shine a spotlight on the critical need for a unified approach to whole-life carbon measurement and benchmarking. Together, we will articulate the framework of a comprehensive European standard that draws upon existing best practices, fostering a harmonised approach across the entire value chain of the built environment.