Built environment not decarbonising fast enough, says UNEP

Global building sector emissions remain far above climate targets

The world’s buildings and construction industry still accounts for 37% of global greenhouse gas emissions. Despite improvements in energy efficiency and renewable power, the sector is expanding faster than it can cut carbon. That warning comes from the United Nations Environment Programme, which has published new analysis on the materials that underpin modern construction.

UNEP’s report, Building Materials and the Climate: Constructing a New Future, says the sector cannot meet net-zero goals without transforming how cement, steel and aluminium are made, specified and reused. Operational emissions from heating, cooling and lighting are falling in some regions. However, the carbon embedded in construction materials now represents a growing share of the problem.

The report identifies three pathways for change. First, avoid waste through circular design and reuse. Second, shift toward sustainable bio-based materials where possible. Third, decarbonise conventional materials through low-carbon production and increased recycling. UNEP argues that international collaboration across the entire lifecycle of buildings is essential to meet mid-century climate targets.

Switching to renewable bio-based materials could deliver up to 40% compounded emission savings by 2050 in many regions, according to the report. Nevertheless, concrete, steel and aluminium remain central to modern construction. Therefore, decarbonising these materials through electrified production and greater recycling will be critical.

Progress has stalled since 2015

UNEP’s findings build on broader tracking by the Global Alliance for Buildings and Construction, a UN-backed coalition. The alliance’s 2023 Global Status Report for Buildings and Construction shows the sector remains far off track. In fact, the current decarbonisation index sits at a level similar to 2015, meaning progress has effectively stalled over eight years.

The 2023 report presents stark figures. CO2 emissions from building operations stood 40% above the target of 7.0 gigatonnes per year in 2022. Achieving the 2030 milestone now requires an annual increase of ten decarbonisation points, compared with the six points per year originally anticipated from 2015 onward.

Meanwhile, most of the buildings that will exist in 2050 have not yet been built. Twenty per cent of existing building stock needs renovation to zero-carbon-ready status by 2030. At the time of the report, 161 nations still had not developed the required climate action roadmaps for buildings and construction. Consequently, the gap between current progress and the necessary pathway has widened significantly.

Embodied carbon takes centre stage

For years, climate policy focused on operational energy. Policymakers concentrated on making buildings more efficient and switching to renewable electricity. That work continues and remains important. However, UNEP’s report marks a broader shift in thinking.

Embodied carbon refers to emissions released during material extraction, manufacturing, transport and construction. As operational emissions decline, embodied carbon becomes a larger proportion of a building’s total footprint. In some low-energy buildings, embodied carbon can account for more than half of lifetime emissions.

Concrete, steel and aluminium are responsible for the bulk of embodied carbon. Cement production alone generates roughly 8% of global CO2 emissions. Steel and aluminium manufacturing are energy-intensive and remain heavily reliant on fossil fuels in many regions. Reducing emissions from these materials requires electrifying production with renewable energy, increasing the use of recycled content, and designing buildings that use less material overall.

Regional markets and building practices vary widely. Solutions must adapt to local conditions, supply chains and construction traditions. Nonetheless, the report makes clear that incremental improvements will not be sufficient. The sector must pursue operational efficiency, cleaner power, circular construction and industrial decarbonisation simultaneously.

Commercial and policy consequences for UK businesses

These global findings carry direct implications for UK businesses involved in construction, development, manufacturing and property management. Government procurement rules already require suppliers to measure and report carbon emissions under PPN 06/21. As embodied carbon becomes a larger focus, those requirements are likely to tighten.

Developers and contractors may face stricter building regulations that limit embodied carbon in new projects. Local planning authorities could begin setting carbon budgets for major developments. Designers will need to specify low-carbon materials and demonstrate compliance through lifecycle assessments. In addition, clients commissioning new builds or refurbishments may demand embodied carbon reporting as standard.

Manufacturers of cement, steel and aluminium can expect stronger regulatory and market pressure to invest in cleaner production. UK steel producers have already announced plans to switch from coal-based blast furnaces to electric arc furnaces powered by renewable electricity. Cement makers are exploring carbon capture and alternative binders. However, these transitions require significant capital investment and long lead times.

Property investors and lenders are increasingly factoring embodied carbon into asset valuations and project risk assessments. Buildings with high embodied carbon may become harder to finance or sell. Conversely, developments that demonstrate low lifecycle emissions could attract favourable terms and tenant demand. As a result, embodied carbon is shifting from a technical concern to a commercial one.

Supply chain transparency will become more important. Businesses tendering for public sector contracts or working with large private clients will need to provide verified data on the carbon intensity of materials and construction methods. Contractors without robust measurement and reporting processes may find themselves excluded from procurement frameworks.

What the latest data shows

Several key facts emerge from UNEP and Global Alliance reporting. Understanding these figures helps businesses assess the scale and urgency of the challenge.

• Buildings and construction account for 37% of global greenhouse gas emissions, making the sector the world’s largest emitter.
• CO2 emissions from building operations in 2022 were 40% above the target of 7.0 gigatonnes per year needed to meet 2030 climate goals.
• The sector’s decarbonisation index remains at a level similar to 2015, indicating that progress has stalled despite eight years of climate policy.
• Achieving the 2030 milestone now requires an annual increase of ten decarbonisation points, up from the six points per year originally anticipated.
• Twenty per cent of existing building stock needs renovation to zero-carbon-ready status by 2030 to stay on track.
• At the time of the 2023 report, 161 nations had not yet developed climate action roadmaps for buildings and construction.
• Shifting to renewable bio-based materials could deliver up to 40% compounded emission savings by 2050 in many regions, according to UNEP analysis.

Practical steps for businesses in the built environment

UK businesses should consider how these trends affect their operations, contracts and long-term planning. Companies involved in construction or property should begin measuring embodied carbon in their projects. Several tools and standards exist, including RICS guidance and the LETI embodied carbon targets. Early adoption of measurement practices provides a clearer picture of current performance and helps identify reduction opportunities.

Specifying low-carbon materials is becoming easier as manufacturers expand their product ranges. Options include recycled steel, low-carbon concrete mixes, engineered timber and natural insulation materials. However, availability and cost vary by region and project scale. Businesses should engage with suppliers early to understand what is achievable within budget and programme constraints.

Design teams can reduce embodied carbon by designing for material efficiency, reuse and deconstruction. Lighter structures, standardised components and modular construction all contribute to lower lifecycle emissions. In addition, designing buildings to be adaptable extends their useful life and avoids the carbon cost of demolition and replacement.

For businesses managing existing property, understanding the carbon performance of the current portfolio is the first step. Whole-life carbon assessments can inform refurbishment strategies and help prioritise interventions. Retrofitting existing buildings is almost always less carbon-intensive than demolishing and rebuilding, even when significant upgrades are required.

Collaboration across the supply chain will be essential. Clients, designers, contractors and material suppliers must share data and align on carbon reduction goals. Contractual mechanisms such as carbon budgets or performance incentives can drive better outcomes. Similarly, businesses tendering for work should expect clients to ask detailed questions about carbon management and supplier credentials.

Training and skills development will support these transitions. Many professionals in the built environment received their training before embodied carbon became a priority. Short courses, industry guidance and peer learning networks can help teams build the necessary knowledge. For businesses looking to develop internal capability, structured training programmes provide a foundation for consistent, informed decision-making. SBS Academy offers training on carbon reporting and supply chain sustainability for businesses navigating these requirements.

Regulatory and market direction

UK policy is moving toward stricter controls on construction carbon. The Future Homes Standard, expected to take effect in 2025, will require new homes to produce 75% to 80% lower carbon emissions than current building regulations allow. While the focus remains on operational emissions, embodied carbon is likely to follow in subsequent updates.

Public sector clients are already leading the way. The Crown Commercial Service and local authorities are embedding embodied carbon requirements in procurement frameworks. Suppliers bidding for public contracts must demonstrate credible carbon reduction plans. Over time, these expectations will spread to private sector clients as investors, tenants and customers demand greater transparency.

Financial markets are also responding. The Task Force on Climate-related Financial Disclosures requires companies to report climate risks, including transition risks from regulatory change. Property funds and developers that fail to address embodied carbon may face higher financing costs or reduced asset values. Conversely, early movers can differentiate themselves and capture market share.

Industry bodies such as the UK Green Building Council and the Institution of Structural Engineers have published guidance on measuring and reducing embodied carbon. These resources provide practical frameworks for businesses at different stages of maturity. However, guidance alone will not drive change at the necessary pace. Regulation, market pressure and client demand will ultimately determine how quickly the sector transforms.

Where to find further information

Businesses seeking detailed technical guidance should consult the following authoritative sources. The Global Alliance for Buildings and Construction publishes annual status reports that track sector-wide progress against climate targets. These reports provide comprehensive data on emissions trends, policy developments and technology adoption.

The Designing Buildings Wiki summarises the UNEP report on building materials and climate in accessible language. This resource is useful for understanding the key findings and recommendations without working through the full technical document.

For businesses navigating carbon reporting requirements and supply chain compliance, SBS provides compliance support tailored to UK SMEs. Understanding regulatory expectations early helps businesses prepare for change and avoid costly delays or penalties.

The UK Green Building Council offers sector-specific guidance on embodied carbon, including measurement frameworks and case studies. The RICS Professional Statement on Whole Life Carbon Assessment sets out mandatory requirements for RICS members. Both resources are freely available and provide practical starting points for businesses new to the topic.