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11 April 2024 | Press Release
Buildings account for more than a third of global emissions—and real-estate asset owners stand to profit from a shift to cleaner energy. However, the sector’s carbon footprint keeps growing.
Decarbonizing Buildings, a report from The Conference Board, presents an urgent business case for reversing these trends in commercial (non-residential) real estate, and lays out key strategies for success.
Emissions from the building sector come from both embodied carbon emissions, as well as operational carbon emissions. Embodied carbon largely refers to the manufacturing, transportation, installation, and demolition of building materials, such as concrete. Operational carbon emissions result largely from heating, cooling, ventilating, lighting, and performing maintenance of buildings. Heating is responsible for about a third of a building’s operational emissions and 85% of commercial buildings are heated using natural gas, or district heat often powered by fuel oil or coal.
“It’s clear that net-zero goals will require rapidly diminishing the reliance on fossil fuels for building heating and power,” said Erin McLaughlin, Senior Economist at The Conference Board. “For companies that own or invest in commercial real estate, the economics of electrification and renewables now make this transformation feasible. Delaying it will mean incurring operational, financial, and reputational risk.”
Among the report’s key insights:
Globally, buildings are responsible for 37% of carbon emissions and 34% of energy demand. Emissions are still growing at 1% per year—putting net-zero goals increasingly out of reach.
In the US, local and state governments are ratcheting up the pressure—and penalties—on building owners. They are offering carrots and sticks.
Building decarbonization requires a multipronged strategy, led by a multidisciplinary team.
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Media Contact:
Jonathan Liu
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