Impact Accounting Methodology for Building Construction

Corporate greenhouse gas emissions fall into three categories: Scope 1 (direct emissions from facilities and vehicles), Scope 2 (indirect emissions from purchased energy), and Scope 3 (upstream and downstream activities like purchased goods and product disposal). As one of the early adopters of Scope 3 reporting, Microsoft determined that their Scope 3 emissions surpass their Scope 1 and 2 emissions combined, in part due to the embodied carbon from building materials and construction. RMI and Microsoft’s report Impact Accounting Methodology for Building Construction aims to refine Scope 3 emissions to provide architects, engineers, and procurement teams with an actionable method and reporting system to guide cost-effective investments and drive significant emissions reductions.

The GHG Protocol-aligned report expands upon conventional spend-based metrics that penalize investments in reducing embodied carbon by introducing a dual-path framework that combines process-based data with spend-based calculations and reporting. It leverages verified, product-specific Environmental Product Declarations (EPDs) for high-emitting materials such as steel and concrete, and supplements them with spend-based adjustments when detailed emissions data aren’t available. This report serves as both a roadmap for immediate application and a call to action for industry collaboration, accelerating the shift to better project designs and material procurement for buildings that are good for both business and the climate.

RMI and Microsoft would like to thank Building Transparency, LinkedIn, and the University of Washington for their technical support and collaboration on this research.