Global management consulting firm McKinsey & Company announced today the launch of the Net Zero Built Environment Council, a cross-sector coalition of industry leaders aimed at supporting efforts to reduce greenhouse gas emissions from buildings and solutions to decarbonize the built environment.
Buildings and real estate are significant contributors to the global climate challenge, accounting for approximately 40% of carbon emissions, according to the International Energy Agency and UN Environment Programme. They are also among the hardest sources of emissions to replace, given their long-term nature.
Initiatives to decarbonize the built environment also present significant investment opportunities, with McKinsey stating that the launch of the council aims to “help industry players to tap into an estimated US$800 billion – US$1,900 billion in potential green markets.”
Brodie Boland, Partner at McKinsey, said:
“Reducing lifecycle emissions will require collaborations and partnerships across industries to cost-efficiently build and scale new innovations from green cement to hydrogen boilers. Yet the built environment is currently a fragmented landscape of separate localised markets, suppliers and building codes as well as disjointed construction processes with unequal accountability. With net zero requiring a threefold increase in the pace of decarbonization, the new Council aims to unite all key players to accelerate decarbonization by collectively transforming the way we design, build, operate and decommission buildings.”
Alongside the launch of the council, McKinsey released a report highlighting the challenges, existing pathways and opportunities relating to the decarbonization of the built environment. The report indicated that while many of the levers to emissions reductions through the life cycle of buildings – from design, materials manufacturing, construction, usage, and demolition – are already known and proven, it identifies a lack of collaboration within the built environment ecosystem as a key obstacle to decarbonization. Click here to access the report.
According to McKinsey, the new council aims to support the creation of new green innovations, create global sustainability metrics and research, and promote cost-effective pathways to decarbonization in areas ranging from construction methods to materials. In addition to researching and promoting quick and cost-effective pathways to decarbonization of the built world, the council will also aim to foster cross-sector partnerships to share resources and collectively commercialize green technologies at global scale.
Erik Sjödin, Partner at McKinsey, said:
“Many green building innovations are already cheaper and widely available, such as optimizing designs to reduce demand for raw materials, yet there is a lack of transparency around all these levers and how to scale them quickly and cost-efficiently. There is also a lack of transparent, trustworthy data on comparative climate performance across the value chain to help spur sustainable investment. The Council will help map out new pathways to net zero and create clear, consistent metrics for green investors, insurers, and customers.”