How to Build a Decarbonization Plan for a Building

Climate change is driving new policy development around the world focused on making buildings more energy-efficient, less carbon intensive and more sustainable for all stakeholders. For example, the Renovation Wave Strategy in the EU aims to renovate 35 million buildings by 2030 and related Energy Performance of Buildings Directive requires all new and renovated buildings from 2030 to be zero-emissions buildings powered by renewable energy and limited embodied carbon. Additionally, buildings significantly contribute to the total carbon footprint of organizations and with rising energy prices become an important lever for cost reductions. By developing and implementing building decarbonization plans, companies can significantly reduce the negative environmental impacts, while strengthening resilience and competitiveness.

The Need for Building Decarbonization

UNDP reports that the buildings are responsible for 40% of global CO2 emissions. This is because most of the existing buildings are still energy inefficient. Many rely on fossil fuels for heating and cooling, and use old technologies and wasteful appliances. Decarbonization has arisen as a priority in enhancing resilience to growing physical and transitional climate risks which affect businesses, cities and individuals alike. Decarbonization is the process of reducing the carbon footprint of buildings. This means not only reducing greenhouse gas (GHG) emissions during operational use, but also reducing embodied carbon by choosing more sustainable materials. GHG emissions are mainly caused by use of fossil fuels which is why achievement of decarbonization goals requires a shift towards renewable energy, electrification and circular practices.

5 Elements of a Strong Decarbonization Plan

A successful decarbonization starts with a well-developed plan. An actionable decarbonization plan should include:

1. Baseline: through analysis of status quo with environmental and economic indicators forming the solid foundations for setting targets.
2. Targets: companies can opt for science-based targets or for practical milestones based on their ambitions. It is important to ensure that targets are SMART to help track progress over time.
3. Measures: a set of decarbonization measures designed to reduce energy intensity and reliance on fossil fuels. Each measure should include cost and expected outcome.
4. Financing: outlining CapEx and OpEx plans and identifying financing opportunities. Sustainable financing options such as sustainability-linked loans, green bonds or grants present an opportunity for companies with sustainability strategy.
5. Governance: plan should address responsibilities and how progress is monitored. The plan should be adopted by top management and included in strategic and financial planning.
   
   

The Role of Facility Managers in Decarbonization

Facility managers are in a great position to reduce the environmental impact of buildings they are managing. As they are continuously monitoring energy/water/waste data and have a good understanding of the building's ecosystem, they are in the perfect position to identify opportunities for decarbonization actions. Their position between owner, tenants and business partners allows them to gather needed data, understand needs and expectations and ensure buy-in from different stakeholders. Successful decarbonization of a building starts with a thorough sustainability audit that provides high-quality insights. This includes understanding what type of energy is used, how it is used and where the inefficiencies come from.

Decarbonization Levers

Decarbonization goals can be achieved by employing different decarbonization levers - electrification, energy efficiency, renewable energy, switching fuels and sustainable procurement. Decarbonizing existing buildings in practice means applying measures that reduce operational and embodied carbon emissions. This includes measures such as:

• Switching to more energy efficient HVAC and lighting systems
• Replacing fossil-based heating systems with heat pumps
• Installing renewable energy on site or opting for power-purchase agreements
• Improving building envelope
• Choosing building materials with lower carbon footprint
• Opting for more efficient appliances

To prioritize the different pathways for reducing CO2e emissions, it is important to quantify possible carbon and energy savings as well as costs associated with implementation. Combination of different decarbonization measures will allow companies to achieve decarbonization targets in line with broader ESG strategy.

Leveraging New Technologies

Green and digital transitions go hand in hand. Building renovations should increase the use of information and communication technologies and electronic systems to adapt the operation of buildings to the needs of the occupants and the energy grid and to improve the energy efficiency and overall performance of buildings. Emerging technologies such as IoT, digital twins and artificial intelligence will significantly contribute to the improvements and accessibility of data needed for decision making. A digital building twin is an interactive and dynamic simulation that reflects the real-time status and behavior of a physical building. By incorporating real-time data from sensors, smart meters and other sources, a digital building twin provides a holistic view of the building’s performance. This data flow allows users to monitor performance, simulate "what-if" scenarios, and predict outcomes without affecting the physical entity thus powering better-informed decisions throughout an asset's entire lifecycle.

Economic, Environmental and Social Benefits

Building decarbonization leads to economic, environmental and social benefits. Positive environmental impacts include reductions in consumption of finite resources, climate change mitigation due to lower GHG emissions throughout the lifecycle and improved air quality. Green buildings also contribute to the improvement of occupants’ wellbeing as a result of better ventilation, improved natural lighting and vegetation. Finally, all these improvements in energy efficiency and uptake of renewable energy sources lead to lower costs which have direct positive business benefits. It is important to quantify these benefits to track successfulness of the project and to ensure support from different stakeholders, such as top management, local authorities, building users and community.

Conclusion

The future is low carbon, and decarbonizing buildings is the powerful tool for achieving a company's long-term net zero vision. While at first glance might feel overwhelming, with a clear plan building can move from being the drivers of climate change to being part of the solution. A well structured plan grounded in high-quality ESG data, outlining practical actions and supported by financial instruments enables companies to progress towards long term sustainability goals. It is not just about compliance with rapidly developing ESG regulation, but also about increasing resilience and market competitiveness as investments lead to lower costs, high property value and improved reputation. Decarbonizing buildings is good for people, planet and the profit and is a strong strategy for a sustainable future.

Editor's Note: This article was co-authored by Stella Hrvatin, Founder of Sustainability Office, and Izzat Ali Khan, Assistant Director of Business Development and Special Projects at EFSIM Facilities Management Company. Stella specializes in guiding organizations through sustainability transformations, ESG strategy development and carbon reduction initiatives across multiple industries. Izzat is a circular economy and sustainability professional focused on integrating IoT, AI and data analytics into facility management to advance Net Zero goals. Together, they bring deep expertise in sustainable business strategy, technology-driven innovation and global decarbonization practices.