For more than a decade, carbon reduction strategies in the commercial real estate sector have focused overwhelmingly on operational emissions — energy consumed during a building’s use phase. While this focus has delivered measurable improvements in energy efficiency and operational performance, it now represents a carbon blind spot. On the Chinese mainland, where development volumes, capital recycling, and asset repositioning remain structurally significant, embodied carbon and Scope 3 emissions increasingly dominate a building’s total carbon footprint.
Embodied carbon — emissions associated with the extraction, manufacture, transport, installation, maintenance, and disposal of building materials — can account for 30–70% of a commercial building’s whole-life carbon emissions, depending on asset type, construction method, and lifespan. When combined with Scope 3 emissions across investment portfolios, tenant operations, and supply chains, these “indirect” emissions often exceed operational (Scope 1 and 2) emissions by a substantial margin.
On the Chinese mainland, this challenge is amplified by several structural factors, including:
- A large stock of relatively young but functionally dated commercial buildings — given the rapid advancement of construction quality and installed building technology
- High levels of demolition and redevelopment, particularly in Tier 1 and core Tier 2 cities
- Capital markets increasingly aligned with global environmental, social, and governance (ESG) frameworks, even where some local disclosure requirements remain varied
- Multinational occupiers applying global net-zero commitments to Chinese mainland-based portfolios
As a result, on the Chinese mainland, embodied carbon and Scope 3 emissions are rapidly becoming material financial and strategic issues rather than purely environmental considerations. Investors face growing scrutiny, operating landlords must respond to tenant demand for low-carbon space while balancing refurbishment costs and asset value, and developers are under increasing pressure to justify demolition-led strategies. At the same time, tenants are recognizing that leased space often represents their largest single source of reported emissions.
This report draws on a series of case studies carried out by Cushman & Wakefield, demonstrating how embodied carbon and Scope 3 considerations are being applied in practice across new developments, refurbishments, and asset repositioning projects. These examples provide insight into actionable strategies that materially influence investment, design, and operational decisions.
