Embodied carbon accounts for up to 50% of a building’s emissions over its life cycle.11 This includes the CO2 emitted from construction material extraction and manufacturing processes, and the transport of materials and equipment to project sites and construction operations (Figure 1). Extending the life of built assets through retrofitting could reduce their total carbon emissions by 50 to 75% compared with new construction.12 Retrofitting could reduce the total cost of ownership and typically shortens construction times compared with new buildings. In fact, retrofits could save up to 77% of costs compared with fully new buildings.13 Retrofitting entails upgrading existing buildings to improve energy efficiency and reduce carbon emissions. Measures include improving insulation, upgrading building envelopes, and replacing heating, ventilation and cooling (HVAC) systems, appliances and lighting. Retrofitting also strives to preserve and retain much of the existing building structure, typically composed of steel and concrete, which are the biggest sources of embodied carbon.The retrofitting opportunity Carbon dioxide-equivalent (CO2e) emissions, embodied and operational FIGURE 1 ~3 years ~1 year ~30 years Periodic peaks from repair, replacement and refurbishment Embodied carbon before start of operations (typically under-reported) 1 2 3 4 Construction material procurement Driven by carbon-intensive manufacturing processes for bulk materials1 On-site construction Driven by fuel consumed by heavy construction vehicles and other Scope 3 emissions2 Operations Driven by heating, water and electricity consumption, along with other Scope 3 emissions3 End of life Driven by demolition and waste processing4 Notes: Emissions can vary widely based on asset class, geography and an individual project’s environmental, social and governance (ESG) approach, among other factors Source: “Embodied carbon and the industry’s role in reducing global emissions”, AECOM, 2022; “Methodology to calculate embodied carbon of materials”, Royal Institution of Chartered Surveyors (RICS), February 2015; “Whole life carbon assessment for the built environment”, RICS, November 2017 Circularity in the Built Environment: Unlocking Opportunities in Retrofits 6

Circularity in the Built Environment 2024