Embodied carbon is required for GRESB — here’s what it signals for the future of sustainable metrics

Ah, GRESB. If you’re familiar with this five-letter word, you may have strong feelings about the reporting body. You may feel that this organization has single-handedly changed how we think about sustainable real estate. You may know that some individuals have sprouted grey hairs from worrying how they can collect the right data. You’ll likely know that some companies pull the fire alarm if they lose a “star.”

For those who aren’t familiar, GRESB (which used to stand for the Global Real Estate Sustainability Benchmark) has become the primary vehicle for real estate companies to report their sustainability initiatives to their investors, or limited partners (LPs). What started as a collaboration between some Dutch pension funds and Maastricht University to try to compare the sustainability performance of different real estate funds has, 15 years later, become quite a cottage industry. Lots of consultants are hired just to help real estate companies with their GRESB reporting, and for companies that report, it’s likely there's someone on staff whose life is consumed by this from May to June every year.

There has been some criticism that GRESB, along with green building certs, is more style than substance, and there’s reason for the scrutiny. For example, the current version of LEED BD+C (sorry, another acronym) only has one point for embodied carbon—the rest is focused on energy, water, and waste. That’s important, but ignoring performance scoring for likely half of the carbon of a development project is missing the mark. And given that GRESB gives points for green building certifications, this can feel like affirmation in the wrong direction.

An IBM report (not focused on GRESB or real estate, but corporate sustainability more broadly), “found that spending on sustainability reporting exceeds spending on sustainability innovation by 43%. Only 31% of executives surveyed report they are incorporating sustainability data and insights into operational improvements to a great extent, while 14% say they do so with innovation initiatives.”

This is… not ideal. Reporting is important for transparently understanding where companies are at, but, my god, it should not stop there. There’s the old adage of “you can’t manage what you don’t measure,” which is true, but the point is to actually do the management bit.

Luckily, over the last year or so I’ve witnessed a sea change happening, moving sustainability from “tick the box” exercises meant to satisfy diligence-happy investors, to performance tracking and change management. LEED and BREEAM are updating their standards to be much more focused on embodied carbon and material selection, and performance more broadly. SBTi has updated its standard to be more prescriptive around operational and embodied carbon. Blanket net zero commitments are less popular than they were a few years ago, but decarbonization targets and performance specs are in.

Ok, so let’s get to the point: GRESB is including a greater focus on embodied carbon as required questions for the Development Component. However, the questions they’ve included are much more centered around “how are you treating embodied carbon?” Here’s the tl;dr:

Important to note: embodied carbon is one of the only GRESB topics gaining points over the next few years. In 2026, embodied carbon will have a scoring weight of 5 points, while other ESG topics and stakeholder management are awarded fewer points. An initial study by GRESB based on current participant data has shown "the expected impact in participants' score in the Development Component ranges between -8p and 0p, with an average decrease of ~5.3p." To meet these new GRESB requirements, participants will need to take proactive steps to measure and report on embodied carbon.

To hammer home the point: companies who report to GRESB must start measuring embodied carbon data on all development projects completed in 2025 or they will effectively lose points.

I, for one, welcome this. Not just because Tangible is focused on programmatic management of embodied carbon (rather than what we call “single-use LCAs”), although that’s also true. I also welcome this shift because, as “ESG” and other acronyms continue to come under scrutiny, the important thing is for companies to focus on the value that tackling these initiatives provides to your business.

• Does it save money by avoiding wasted energy, material, or resources?
• Does it enable greater efficiency through data transparency and communication?
• Does it have a positive impact on your clients?
• Does it mitigate risk to the business?
• Does it attract top talent?

Most substantive ESG or sustainability measures will answer “yes” to at least one of those questions.

For example, having a program to manage embodied carbon may feel advanced for real estate firms that haven’t yet started on this journey. But! Managing embodied carbon well really just means efficiently managing materials selection for your development projects. Simple as that. Similarly, collecting data on fit-outs is really around understanding how tenants are impacting the health and waste profile of your spaces. Don’t those seem like important things for real estate companies to manage?

My hope is that the updates to GRESB (and other frameworks) start to filter out the noise, by incentivizing organizations to focus on real change and real value. And as it just so happens, if companies are doing things that bring them value, they’re probably a better investment.

-

Anneli Tostar is Co-Founder and CEO of Tangible . Tangible is a software platform to help companies decarbonize construction at scale. To learn more, visit tangiblematerials.com or email info@tangiblematerials.com.