Building & Real Estate

Environmental Impacts of Building and Real Estate

The building and real estate sector is responsible for about 18% of total global greenhouse gas (GHG) emissions . This high impact intensity framework encompasses building products (finished building materials and energy equipment), manufacturing and distribution, building construction and renovation, real estate development and rental as well as civil engineering or inspection. Raw building materials are addressed in the Basic Resources framework.

According to the life cycle analysis (LCA), the most impactful lifecycle phases are construction (materials production) and use (energy consumption). The general NEC equation is then based on the sum of two NEC components: material NEC component of the construction phase and energy NEC component of the use phase, each calibrated on a -50%/+50% scale. An optional incremental NEC can also integrate specific characteristics, such as the inclusion of recycled materials or renewable energy sources.

For example, the following table shows how materials are considered in the NEC component for building products according to their carbon content:

Illustration of Material NEC component for building products


How the NEC measures environmental impacts for building construction, renovation and operation

In brief, the methodology used to calculate the main environmental issues is based on the main type of information that are generally available and measurable at the asset and activity levels: building products used, building structure chosen, yearly energy consumption per m2 and certifications. Labels and certifications provide normalized, multi-criteria ratings generally covering climate, resource depletion, water withdrawal, waste management and material resource depletion.

NEC calculation are different for existing buildings and new buildings, for which energy performance depends on national regulation and norms in place for construction and properties. When limited information is available, default values are given, such as summarized in the following table. They are based on average values and transparent assumptions, such as a generic new construction/renovation mix of 50/50.


Performance Indicators

In brief, the environmental Key Performance Indicators used are:
+ For materials performance in the construction phase: carbon content of building products and building solutions (distinguishing wood, cement or steel-based constructive solutions) and certifications
+ For energy performance in the use phase: primary energy intensity in kWh/m²/year and operation-related certifications

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WHAT IS THE NEC METRIC?

Designed to inform and empower investment decision makers, it uses physical data from across the whole value chain to provide a snapshot of an activity’s net environmental contribution and it can be applied at a company, portfolio, index or product/source level.

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WHY USE THE NEC METRIC?

The NEC evaluates the impact of industry activities based on environmental issues including climate change, water and biodiversity impacts.
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