A Panel on Decarbonizing the Built Environment
How can we accelerate the impact ecosystem to dramatically reduce embodied carbon emissions?
Seattle, WA, March 25, 2019
Each fall, the SOCAP conference convenes over 3,000 impact investors, world-class entrepreneurs, and innovative cross-sector practitioners dedicated to increasing the flow of capital toward social good. On March 25, the Pacific Northwest regional SOCAP 365 conference hosted a vital discussion on how the building industry is working to dramatically reduce the emissions created in the process of construction. The event was hosted by Impact Hub Seattle, which provides entrepreneurs with the space, community and resources needed to build sustainable and scalable businesses and organizations that drive long-term social and environmental good. Seattle and the Pacific Northwest are a global center for research and solutions related to reducing embodied carbon emissions.
Summary
Overall, the built environment is responsible for a significant amount of greenhouse gas emissions — up to 40% of carbon emissions globally. Although it is crucially important that new buildings be highly efficient and draw their energy from renewable sources, it is equally important to reduce the embodied carbon emissions associated with extracting, transporting, and manufacturing materials, as well as the construction process itself.
There are opportunities to be involved in this creative effort. A new tool will soon be available to measure and enable the reduction of embodied carbon. New research, building materials, and design principles are available to help reduce embodied carbon emissions, and there are opportunities for investors to help accelerate the needed changes.
Decarbonizing the built environment is not merely a technical or business challenge. Every decision we make has social, cultural, and even political implications. The built environment must be designed to support equitable and healthy communities.
Panel Speakers
Kate Simonen, AIA, SE is founding director of the Carbon Leadership Forum, an industry-academic collaboration highlighting the carbon impact of the built environment, and developing pathways for “carbon smart” buildings to be part of the global climate solution. She is an Associate Professor at the University of Washington, a writer, and a researcher with significant professional experience in high performance building systems, seismic design and retrofitting, net-zero energy residential construction, prefabrication and collaborative practice. She authored the authoritative Life Cycle Assessment and the LCA Practice Guide.
Don Davies, President of MKA, leads the firm’s Hospitality Specialist Group with a particular focus on high-rise buildings, and is the leader of MKA’s Sustainability Technical Specialist Team. He is on the Advisory Group for the Council on Tall Buildings and Urban Habitat and has designed towers up to 105 stories tall, including 47 performance-based seismic design towers in areas of high seismicity. Don is also a recognized leader in sustainable structural design practices, frequently lecturing on embodied carbon modeling, bio-mimicry, and structural design optimization.
Jorge Castro is an advocate for a just path to resilience and sustainability and has worked with the Union of Concerned Scientists on clean energy policies. He is a board member with Zero Waste Youth USA, and is currently a business development associate with Brown Girl Green, a podcast with the mission to amplify the voices of young people of color in the environmental movement.
Charlie Curtis is Vice-president & Co-chair of E8, a network of impact investors focused on both the pursuit of profits and the pursuit of a higher purpose — to create a cleaner, more sustainable planet. Members of E8 are committed to advancing clean technologies by investing in highly promising, early-stage companies all across North America. Charlie served for several years as the Co-Chair of E8’s Screening and Due Diligence efforts and as Treasurer.
Andrew Himes, the panel host, is a partner in Carbon Innovations LLC, a social impact business consultancy focused on business-based solutions to climate change. Himes was founding editor of MacTech, the leading Apple technology journal, then co-founded the Microsoft Developer Network and led the first web development project at Microsoft. Himes was coordinator of Carbon Smart Building Day, an event affiliated with the 2018 Global Climate Action Summit.
Andrew Himes: I want to welcome all of you here this morning to talk about one of the most significant issues facing the planet, and also a combination of opportunity and challenge facing the impact-investing world.
Our context is that 40% or so of greenhouse gas emissions on the planet are emitted by the built environment in some way. It’s a combination of operating buildings — i.e., heating, cooling, electrification, and all the rest — and also what we call embodied carbon emissions, created when the building is manufactured, all the way from extracting materials that ultimately will go into it to the construction of the building.
We know already that it’s crucially important to reduce the operating emissions from buildings to make them more efficient and use less energy in their operations. For many people, that is what the green building industry and movement has been all about over the last twenty years. But what we’re realizing is that embodied carbon emissions over the next thirty years will be a very significant driver of climate change and approximately equal in their impact to operational carbon.
The context — even larger than that — is that over the next 30 years we, on the planet Earth, will be creating another two trillion square feet of new building space, which amounts to an additional brand-new New York City every 30 days. That’s an astonishing and very large number.
Fortunately, Seattle and the Pacific Northwest are real centers for research, innovation, and understanding this challenge. So, Kate Simonen from the Carbon Leadership Forum, would you start out by just telling us a little more comprehensively — and maybe more scientifically than I did — what brought you to this focus on embodied carbon.
Kate Simonen: I was practicing as an architect and engineer. I worked with a team of people who were looking to make net-zero energy buildings, so super-green buildings. We were also going to design and build homes that would be zero-energy to operate and we were going to control the supply chain for those building materials. We started talking about how this was going to happen, and we then started to get all sorts of questions like, where are you getting those materials? We were going to get them from China. How were you going to get them there? Are you going to make them out of metal? Why not wood? There are some distinctive advantages for aluminum, compared to wood, but there are also high-energy impacts on importing them both. That led me to life cycle assessment (LCA) because I wanted to understand, over the life cycle of the product, in this case a building, where were the environmental impacts happening and what percentage of them were due to manufacturing building materials.
Embodied carbon is a term… it’s kind of clunky because it implies the carbon is in the thing, embodied in it, but it really is the emissions that took place to make the thing. If I make cement — there is a cement kiln here in Seattle, and they are burning coal, natural gas, tires, and they are creating cement. There’s also a chemical reaction that takes place when you make cement, so there are additional emissions. Life cycle assessment tracks all those emissions from the manufacturing, the transportation, all the way up to fabrication and building a building.
When you have a net zero building, like the Bullitt Center in Seattle, no external energy source is used to operate it. 100% of its environmental impact is in making the things that go into it, including the solar panels. As we move toward more and more energy-efficient buildings, the relative importance of those material impacts increases, and also those material impacts happen right away. So, there is a growing awareness that we must address embodied carbon. The International Energy Agency just produced a report about how both material-associated emissions and efficiency need to be integrated into a comprehensive strategy for meeting climate impacts.
Andrew Himes: Can you tell us about a new tool to measure embodied carbon called the Embodied Carbon in Construction Calculator (EC3)?
Kate Simonen: We are getting better at measuring embodied carbon. But we also must act on it. We can’t just wait 30 years to be perfect at doing this. We must act with imperfect data.
Life cycle assessment relies on arguably imperfect data. However, we have increasingly standardized methods of reporting embodied carbon in the form of something called an environmental product declaration (EPD). This is a nutrition label for a product, it tells us the carbon footprint of a product. Yet even as EPD data becomes more easily available, building industry professionals have a hard time finding and interpreting that data. Right now, EPDs are mainly available in the form of PDF files; you can call a manufacturer and ask them for an EDP for their product, but it’s hard to sort and find the lowest carbon steel option or the lowest carbon concrete option by comparing two or more EPDs.
The development of EC3, the Embodied Carbon in Construction Calculator, has been funded through the Charles Pankow and MKA Foundations along with ten different building industry organizations. EC3 is intended to create a global, open-source database of EPDs, and make it easy for an architect, engineer, or general contractor to understand the carbon impact of a new building.
Skanska Construction has been leading the user development team, and it’s being piloted on the Microsoft Campus refresh, a $3.1 billion construction project here in Redmond. The role of the Carbon Leadership Forum — my research group at the University of Washington — is to assess the data, understand what data is good and what data is marginal, and make this reporting process transparent and accountable. Our assumption is that if you can measure it, you can do something about it.
Andrew Himes: Don Davies has been a recognized leader in sustainable, structural design practices for a long time. He’s lectured and talked about embodied carbon modeling, biomimicry, and structural design optimization. So, Don, what brought you to such an interest in embodied carbon?
Don Davies: Originally, I’m from a small town in Idaho that’s in the mountains. I enjoy hiking and I enjoy getting outside. I want that place to stay the way it is, so that’s certainly a deep motivation.
Our practice is a 200-person office here in Seattle, but it’s really an international practice. While we are based in Seattle and we do a lot of buildings here, I fly around the world working on tall building designs. Whether that’s Mumbai, Sri Lanka, Singapore, New York, we touch a lot of projects in different locations. My carbon footprint is terrible, by the way, because I’m on airplanes way too much. I drive an electric car, we’ve got solar panels, but it’s bad.
But we did a revealing study a year ago of two recent tall buildings on the West Coast here. We looked at the variance in the carbon footprint, not just the quantities that went into the building and if the team produced an optimized design, or not; we also looked into the project supply chain of the structure and the differences in the carbon footprint of the materials based upon where they came from and how they were made. There was a multiple times difference in the carbon footprint between these two similar towers. What that comes down to is that if you don’t measure and optimize the materials used, and if you don’t know the carbon footprint created by those materials, you can’t manage that carbon footprint.
There’s a lot of low-hanging fruit, ways to reduce the embodied carbon footprint of a new building, if you start asking the questions about first optimization, and then procurement, about where materials come from. That’s part of why this EC3 tool that Kate is working on is so significant.
The difference in the carbon footprint of just the two buildings that I mentioned to you, is over 200 years of me being on an airplane. Maybe that’s my moral self-justification for what I’m doing. But the point is, in the built environment, the carbon footprint that goes into these buildings is so profoundly impactful that we need to get it right, we need to be judicious and smart about how and where we use the precious resources required to build them. I’m highly motivated to try to move the needle for the whole industry if we can.
Andrew Himes: Thanks, Don. Just a comment here. Last year three big, international technology companies each built and then opened a brand-new global headquarters or a major building — and in each of those three cases, these companies delivered press releases bragging that their new building was one of the most efficient buildings in the history of the built environment. One of them was Apple in Cupertino, with its new, doughnut-shaped building. Apple claimed its building was the “greenest building on the planet.” The designer for both Apple and Bloomberg was Foster + Partners, which claimed that the new Bloomberg headquarters in London was “the world’s most sustainable office building.” The third was the Salesforce Tower in San Francisco, claiming to be the highest-rated LEED version 4 Platinum building in the U.S. In each of those three cases, no one measured and reported the impact of embodied carbon emissions in the process of construction. Therefore, they really had no idea of the building’s impact other than what its operation would be starting on day one of its use. The question of how we actually can measure embodied carbon and then do something about it is important.
Don, a common assumption is that we can either address the challenge of climate change and reduce carbon emissions, or we can be profitable. So only by creating buildings that are expensive and not really affordable can we address climate change. Is there a cost differential in building a truly green building, or are there new design principles and materials that can be used to do both?
Don Davies: That’s a good question because I think that underpinning it is a common and false assumption prevalent in our industry, which is that if you’re going to do the responsible thing, it’s got to cost more. I think that’s a real mistake. One of the things about embodied carbon is that it’s one of the places where there can be a win-win. If you do the more optimized design, if you pick the right materials, it doesn’t necessarily have to cost more. In fact, if you do it right, it brings a discipline to the design that may enable you to actually end up with a lower cost building.
I’d like to reference the EC3 tool that we heard about earlier. Kate and I have been talking about embodied carbon for years, and this conversation has slowly gained traction, but it really hasn’t taken off the way it could. Then, Stacy Smedley at Skanska got Microsoft to sign up and say, “Hey, yes, we’re going to measure our total footprint, not just operational carbon but what goes into our building.” Now we have the investor, the buyer saying, “We care about this topic.” And we can go to the materials supply industry to say, “If you want to supply our project, you need to engage. You need to tell us the footprint of your product. By the way, we’re going to measure it.”
Before that moment, the material suppliers had few if any major customers say, “We’re going to monitor and then buy the lower carbon material,” or “We’re going to spend X dollars more for a lower carbon material.” But now, Microsoft is saying, “You have to report and we’re going to look at it in our decision-making process and let market pressures take it from there.” That’s transformational. It helps to move the market and the industry. And it helps us to conclude that doing the right thing doesn’t have to cost more.
Rebar is a good example. When it arrives at a construction jobsite, the rebar might come from the Nucor plant here in Seattle where it’s 85 to 90% recycled content, and hydropower is the biggest source of power for electricity to run the plant. Or it might be steel coming out of China, which is likely virgin, first-generation steel manufactured with power from a coal-fired generation plant and then shipped across the pond. You would find probably a 6:1 difference in the carbon footprint of the steel depending on where it was manufactured, though these two commodity materials showing up at the job site might be the same price. Simply asking that question is the type of thing we need to drive transformation, and the lower carbon building doesn’t have to be the more expensive one. That’s a false premise.
Andrew Himes: Speaking of materials, you were telling me about a couple of interesting new companies that have developed materials to address the problem of embodied carbon in a profitable way.
Don Davies: Sure, I’ll mention a couple that that we’ve been working with. One of them is from Resource Fiber, a company looking at growing bamboo fiber in the United States. They figured out that the southeastern United States — Alabama, Georgia — is where bamboo can grow best. They have plantations underway now where they’re growing seedling crops. They’ve started creating products out of these materials. Right now, they’re making railroad ties for the railroads, but we’ve been talking about additional new products that can challenge the wood industry for nail-laminated or glue-laminated beams and girders.
The beauty of bamboo fiber, because of its length and its strength, is that it can be two to three times stronger than typical Douglas fir when you break the fibers down and put it into a new type of press. Also, in seven years you can grow a volume of material that would take you forty years to grow in a fir or pine forest. It’s hugely interesting to see where those products may be able to go.
Another one is recycled products. Cement plays such a huge and integral part in our economy and our built environment uses such large volumes. Right now, in the cement industry, there are partial cement replacements such as fly-ash and slag, which help offset some of the cement required when making concrete. There are other proposed full cement replacements, but none have totally taken off because of cost and the large volumes required.
Of these, fly ash typically is the byproduct from a coal-fired generation plant. In the Northwest, we do have one coal-fire generation plant down in Centralia that provides the fly ash that is used in our region for the cement industry. But that plant is about to close. That is a good thing, but we then have an un-met need as that fly-ash supply will go away. So there are folks right now looking at using recycled glass powder, taking glass — whether it’s from Coke bottles, windows — recycling glass from demolished buildings and grinding it down to a powder level. It actually can work as a partial cement replacement in blended concrete mix designs, similar to fly-ash. To me, that’s another really exciting industry. The New York Department of Transportation has allowed it now on roadways and walkways, and there are now several buildings that have used glass powder as an additive in their concrete mix designs, so it’s starting to mature there. The New York company wants to come to Seattle and open up a couple of plants.
Andrew Himes: This ground glass additive, it can actually replace up to 30% or 40% of the cement product? Is that right, something like that?
Don Davies: That is correct, but they’ve just done a trial batch on it and they found that they can actually replace up to about 85%, with up to 8000 psi strength when the cement becomes an ingredient in the finished concrete. Right now, we recycle all our glass in Seattle and Portland. Most of it is getting stockpiled because we don’t have a use for it. We don’t know what to do with it. This is the type of application that would allow us to quickly consume the piles of glass we’re currently stockpiling.
Andrew Himes: By the way, speaking of bamboo, I can personally testify to the rate of growth in bamboo in the state of Alabama, where I once lived. In Birmingham, it took about five months for our entire backyard to be taken over by bamboo, and we had to cut it back all the time. It really grew fast, so the idea of being able to do something productive with bamboo, create jobs down in the Black Belt of Alabama, and help to transform the economy in a positive way would be really interesting.
Let me turn now to Jorge Castro. Jorge, you’re an advocate for a just path to resilience and sustainability, and you worked until recently with the Union of Concerned Scientists down in California on clean energy policies. You’re currently a business development associate with Brown Girl Green, a podcast whose mission is to amplify the voices of young people of color in the environmental movement. First, can tell you us more about the podcast, and then tell us about your other current projects.
Jorge Castro: Hi, everyone. Brown Girl Green was started by Kristy Drutman, who is an environmental justice advocate, and I’ve joined her to help expand this business. We interview people of color who have prominent roles in the environmental sector and who are working to amplify diversity, equity, and inclusion and avoid the exploitation of young people of color.
I am also a board member with Zero Waste Youth USA, an organization that convenes a network of young professionals and helps create a career path into the environmental sector and waste management industry for high school students. We serve underrepresented youths and provide scholarships for members from disadvantaged communities to come to our conferences and networking opportunities. We work with local governments industry leaders and local businesses who are passionate about environmental justice, zero waste, and a just transition away from a wasteful economy and toward a sustainable future.
I’m interested in embodied carbon and the tool being developed by the University of Washington’s Carbon Leadership Forum and Skanska because I see a lot of potential in using the data gathered by this tool to inform policies that can help reduce greenhouse gas emissions. This is important because many of the point sources of greenhouse gases target the health of underrepresented communities. I aim to be an advocate for a just transition away from fossil fuels. I am interested in discussing who we are serving and who is part of the conversation as we create a just path to end greenhouse gas emissions.
Andrew Himes: What was it that drove you, as a scientist, to want to focus on the connection between environmental justice and climate change?
Jorge Castro: I grew up in a coastal community in Peru. As I was growing up, you could begin to see the sea level rise. You could begin to see communities being affected by pollution. You could begin to see communities experiencing more birth defects and more respiratory problems. And those who suffer the most from environmental problems are those least culpable for carbon and other pollutants.
This is a personal quest for me. I went to college to major in chemistry and geology specifically to come work in this space. After college, I realized that I had a knack for leadership and organizing. I brought my analytical skills to the organizing field and found the perfect fit at the Union of Concerned Scientists, where I organized a coalition to support the passage of the 100% clean energy bill in California, which became law in August of last year.
I helped to convene a group of experts from both engineering and environmental justice, to talk about how to create an intersection between rebuilding California’s infrastructure, addressing policies that could lead to the renewal of infrastructure that sets the priorities of the communities as part of the legislature, and finding areas of synergy between these groups.
In convening this group of experts, I found that there are guiding principles that can help us to identify policies that prioritize the needs of communities most affected by climate change. These include working with organizations that represent people of color and disadvantaged communities, finding funding opportunities to revitalize and build infrastructure that connects rural communities with other areas where there is an abundance of wealth, and building new infrastructure to minimize negative consequences for people of color, such as displacement or the erasure of their jobs. I advocate for more training programs and a construction industry pipeline to open entry-level jobs and career paths for more people of color. Because when we give people of color a seat at the table, that’s when real advocacy for these communities can start.
Last weekend, I went to a conference about Latino empowerment hosted by Amazon, Microsoft, and other tech giants here, where one of the speakers said it well: we are the only ones capable of telling our story and advocating for our needs. It is crucial for the companies that are currently distributing money or making decisions about new infrastructure to give us a seat at the table and include us in the leadership because that’s when real climate justice will be achieved.
Andrew Himes: Jorge, I am grateful for your holistic and comprehensive understanding of how all these things are put together. A confession: In 1970 I was in college and present at the very first Earth Day at the University of Wisconsin in Madison. There was a kind of feeling among many progressive activists, including me, that the civil rights movement and ending the war in Vietnam were the truly important issues, and then there was the environment, which was an issue that that only middle-class, liberal-minded white people focused on.
I had little understanding of the close and deep integration between challenges to the environment and challenges to human rights, social equality, racial justice, and human dignity. I think we’ve all begun to learn how climate change drives every social justice issue: homelessness, income disparity, the depletion of resources around the world, violent conflict, extreme weather events, political upheaval, and potentially hundreds of millions of refugees cascading around the world. It’s crucial that we understand how social justice and racial justice are deeply integrated with our concern for our planet. We will not find solutions to climate change without finding solutions to all the other challenges we confront.
Now I’d like to turn to Charlie Curtis, Vice President & Co-Chair of E8, a network of impact investors focused on both the pursuit of profits and a higher purpose of creating a cleaner and more sustainable planet. Members of E8 are committed to advancing clean technologies by investing in highly promising, early-stage companies all across North America, and Charlie has been a significant leader, volunteer, and partner in E8 for a good long time. So, I’ll turn it over to you, Charlie. Tell us about E8.
Charlie Curtis: E8 is, as you said, a group of accredited investors focused on cleantech. Cleantech is a very loose umbrella term for us, but it’s pretty much companies that are working to make positive change for the environment. Climate change is a huge driver for many of those companies. We have a comprehensive process of due diligence we conduct before any decision to invest in a company.
The companies we see related to the decarbonization of the built environment deal both with the materials that go into the building and with the operational side of the building. Many of the innovations that we see are happening on the operational side, in energy efficiency, in HVAC systems, and we’ve seen a number of companies that are working toward net-zero buildings.
CleanFiber is a startup focused on what may sound like a pretty mundane market — insulation in buildings. They manufacture the cellulose insulation that construction companies blow into new or retrofitted buildings. Because it replaces foam or fiberglass insulation that has a heavier carbon footprint, that could be a compelling investment thesis for our members.
But when we first approached CleanFiber, we looked at eight different characteristics of the company, such as how effective is their management, what’s their market, and so on. So, we start to see where the hot button issues might be.
For CleanFiber in particular, we summed up three areas that were the biggest questions we needed to have answers for in order to move forward. First, the competition. The building insulation industry is really pretty mundane, and its leading companies and products are entrenched. The market is a slow-moving one. Innovating and succeeding in that space may take a long time. Second, we want to understand whether the product and the technology are defensible. Could somebody else just go out and do the same thing that this company is doing and beat them in the market? Finally, what’s the financing structure for the investment? Is it clear how the investment will pay off, how it will deliver returns?
In the process of conducting due diligence with CleanFiber, we hit a roadblock in the details of the financing terms and backed off, telling them, “We do not see this as an investable deal.” Over the course of the next three months, the company re-worked their plan and came back to us with a revision of the term sheet addressing our concerns. As a result, we moved forward with investment. We’ve got a lot of confidence that the company will make a positive contribution while also turning a profit.
Andrew Himes: I’ll just add a couple of things that I learned recently about CleanFiber. First, CleanFiber manufactures and sells cellulose insulation. When you put cellulose insulation in a building, you are semi-permanently sequestering carbon in the building. That’s interesting. Another point of interest about CleanFiber is that the rest of the cellulose industry mainly uses newsprint as a source material. Newsprint is processed and converted into insulation. The problem with newsprint, as we all know, is that it’s a declining resource. The patented CleanFiber technique allows it to be the only company that uses cardboard as a source for cellulose insulation. And of course, cardboard, as we all know from the boxes that we get on our front porch every few days, is an increasingly common resource.
To conclude, Charlie, what brought you to thinking so much about the social impact of your investments, how you can measure your success in a double or triple bottom line way?
Charlie Curtis: I think it was having been involved in the S&P 500 market. You see a stock go up, you see a stock go down. Really all you’re looking at is price. With impact investing, we become aware that we can make a difference in many ways. I’m investing because I like to make money on my investments, but I’m also investing because I like to help create positive change.
Comment from the Audience: As someone who does science at the University of Washington, I’m heartened to hear this conversation. But at the same time, I experience some concern and anxiety, which I’m sure you share, because I live in a city where the tech economy has decimated communities of color and contributed to gentrification and redlining. Now, I’m listening to this conversation and remembering that the construction trades are one of the few fields that offer equitable opportunity to communities of color, people who have been locked out of other occupations. When we measure the impact of a company or a market, it’s important that we see who is being left out of things as much as who is being included. My anxiety is that if tech industry has had damaging consequences for people of color and poorer communities in the city of Seattle, what can a green economy do? Are we going to lose another industry sector that’s one of the very last that do not require a college degree and is a fair-wage entry point for poorer communities?
Jorge Castro: I totally feel that anxiety. When tools or technologies that reduce carbon pollution get developed, we in the environmental justice communities think, “Oh, yeah. But what jobs are going to get lost?”
Even so, I lean towards optimism because I have heard about new solutions that create new jobs to replace those that may be lost. For example, the process Don described, mixing recycled glass with cement, could generate jobs. With the right people in leadership from these companies, we might develop retraining programs that are actually successful, unlike the tech retraining program that the Obama administration set out. With China’s increasing resistance to accepting our recycling, there’s an opportunity for us in the US to develop our own recycling plants. Obviously, we cannot expect people who are in their 40s or 50s to go back to the workforce and code, but I’m sure that we can retrain them to help manufacture cement or work in a recycling plant. We could then turn those plants into hubs for innovation and economic development, retraining unskilled workers to drive economic development in their communities, and giving them the opportunity to contribute.
I do tend to be hopeful, but we need help from the data experts and the investors to drive our goals. And we need to keep the priorities of the communities who get affected the most by these advances high on our list of things we must pay attention to.
