Real Estate and Climate: A Shift Toward Sustainable, Low-Carbon Construction

Posted 2025-08-04

Canada’s real estate sector is undergoing a profound transformation. Accounting for approximately 18% of the country’s total GHG emissions, the built environment stands at the forefront of climate action. This transition for real estate and climate is not a constraint but a strategic opportunity to accelerate building decarbonization toward sustainable low-cabon construction, improve energy performance, and strengthen the country’s climate resilience.

Real Estate and Climate : Lightening the Carbon Footprint for A Shift Toward Sustainable, Low-Carbon Construction

According to Environment and Climate Change Canada, residential and commercial buildings emitted over 50 Mt of CO₂e in 2022. Residential energy use alone represents 57% of those emissions. The BMO Climate Institute estimates that a 64% reduction will be required by 2030 to meet Canada’s climate targets.

But aiming for carbon neutrality is not enough — we must commit to ongoing carbon improvement, grounded in solid data and effective tools.

The Challenge of Embodied Carbon

A largely invisible share of emissions comes from embodied carbon — the greenhouse gases generated during the production, transport, and installation of construction materials.

Studies in Quebec show that buildings designed with low-carbon principles reduce both environmental impact and financial risk. Using local, low-impact, and renewable materials is a key strategy to lower emissions.

Designing for Efficiency from the Start

Energy-conscious design is a critical lever in the real estate sector’s transition. Solar orientation, high-performance building envelopes, natural ventilation, and bio-based materials are all decisions made early in a project that can significantly influence its long-term energy performance.

The Québec government–supported initiative Low-Carbon Wood Construction exemplifies this approach. It promotes sustainable practices, renewable resource use, and long-term resilience — reducing building emissions by up to 60%.

Renovating Is Better Than Rebuilding

In terms of emissions reduction, retrofitting existing buildings can deliver quicker returns than new construction. Simply put: the least polluting building is often the one that’s reused.

This is why green retrofit programs are being prioritized. Since 2016, over $10 billion has been committed to decarbonizing Canada’s building stock, including energy upgrades for existing structures.

Public Financing and Risk Management

In real estate, climate is now a financial risk factor. Energy-inefficient buildings may quickly lose value as carbon pricing, regulations, and buyer expectations evolve.

Conversely, energy-efficient buildings are becoming more attractive and resilient investments. Public policy and financial incentives are playing an increasing role in guiding investment toward sustainable, low-carbon assets.

Sustainable Urban Planning and Engaged Communities

Decarbonization doesn’t stop at individual buildings — it extends to how we design our communities. Sustainable urban planning includes smart density, green mobility, resilient infrastructure, and accessible services.

By 2042, Québec aims to develop energy-efficient, inclusive cities adapted to climate challenges. This calls for alignment between public policy, building codes, green subsidies, and private initiatives — all toward building a low-carbon way of life.

Everyone Has a Role to Play

The ecological transition in real estate is not just a government or developer issue. Citizens, small businesses, and municipalities can all contribute — by choosing low-carbon materials, renovating existing spaces wisely, or offsetting residual emissions through credible projects.

To read other climate related news by Planetair, click here.