The construction industry will never reach carbon zero. And while we have made great strides in the way of operational emissions, we have only begun to think about reducing the embodied carbon emissions associated with the manufacturing, transport and construction of the necessary building materials. In most cases, it takes 250 years of operation to match the emissions related to the building process itself. So how do we reduce embodied carbon emissions as much as possible—and responsibly offset the rest?
Full Transcript
Alexsandra Guerra: You’re listening to the Reversing Climate Change podcast by Nori, the world’s first carbon removal marketplace. Here are your hosts, Ross Kenyon and Christophe Jospin.
Ross Kenyon: Hello, welcome to the Reversing Climate Change podcast with Nori. I’m Ross Kenyon here with Christophe Jaspé and Paul Gamble. We are in Ballard, Seattle, the Nori HQ area, which is great because we are here for Reversipalooza, which is happening this week. And how long have we been preparing for this, Christophe? I feel like it’s been forever.
Christophe Jospe: Well, I’m always here.
Unknown speaker: You’re here for Reversipalooza. That’s true. Yeah.
Christophe Jospe: We’ve got to pull rank on me, put me in my place. We’ve been preparing for quite some time. It is a culmination of a lot of things that we’re doing and really just a starting point as well. It’s exciting because sitting across from us, we have Stacy Smedley, who is head of sustainability at Skanska, or if you’re in Seattle, Skanska. And Stacy is incredibly gracious with her time, not only to come up on this podcast, but she’s going to be attending Reversa Palooza. So we get many doses of each other.
How about we start with, who are you? What’s your story? Why are you on the Reversing Climate Change podcast? Is this something you even care about?
Stacy Smedley: How far back do you want me to go?
Ross Kenyon: Do the Carl Sagan, to conceive of the universe, or what is it, to bake an apple pie, you must first create the universe? There you go.
Stacy Smedley: It started when I was eight, for real. So I can start there if you want me to. So I grew up in Oregon, Clackamas, Oregon, which is a suburb of My grandpa had about, oh, I don’t know, three or four acres there. So we built a house. My mom and I lived on the bottom floor and he was upstairs with my grandma. And it was just this kind of natural outdoor space that I had as my playground every day. And when I was eight, he sold it. All the land kept the house to a developer.
So I watched from the deck. It was on this big hill as the bulldozers came in and basically a clear cut my forest and the stream went away and the deer went away. Everything went away and became kind of asphalt and dirt lots. And then Really crappy cookie cutter houses that went up. So I told my mom when I was eight that I wanted to grow up and build things that didn’t destroy nature because I saw that man could make really bad choices about that. And then beyond that, the same time I was doing a report on Julia Morgan, who was the first female architect in California to be licensed.
So it’s this confluence of things where my eight-year-old brain, oh my gosh, I can be a female architect and follow in Julie Morgan’s footsteps and change the world and build things that are good for the environment. So that’s really where it started. And I did all the things I needed to do to become an architect. I went to University of Washington, got my architecture degree, did architecture for 10 years. Designed a project, a living building project, which is a very stringent certification system for buildings. It’s the fourth in the world and Skanska was the contractor.
And I saw all of a sudden that the contractor actually touches way more stuff than the architect does in terms of what you control and what you’re procuring in terms of materials and how you build things. So I asked to join them and they let me come on board at Skanska. And then I kind of worked my way into the sustainability role full time.
Ross Kenyon: Wow. So are you investigating their supply chain and making sure you can appease your eight-year-old self?
Stacy Smedley: Oh, yeah. She’s constantly in there in my brain. Like, are you doing enough? Are you really doing what you said you were going to? It’s a commitment.
Ross Kenyon: You’re not disappointing her, are you?
Stacy Smedley: No, not right now. Thank goodness. Yeah. Yeah.
Christophe Jospe: Yeah. And that’s really exciting to also, you’re a mother and you have an eight-year-old now. So maybe it’s like seven.
Stacy Smedley: Seven. But yeah, he acts like he’s 13. So...
Christophe Jospe: And it’s really important, I think, to think about the children here because the planet that we live in today, it’s like we have this choice. We can do the right thing or we can do something that will continue us on a path that’s... Completely unsustainable. And one of the exciting points that we’ve learned about Skanska is you’re, as a company, really trying to walk the talk. And you look at the construction industry as an architect and you say, OK, well, we can do a lot more and we have to do a lot more and we can set these far reaching targets that relate to sustainability.
Can you talk to us about what some of those targets are in 2030 and 2050?
Stacy Smedley: Sure. Yeah. So Skanska is, I think, really special. I mean, I love it. I worked there. I’ve been there for five years. But, you know, it’s a Swedish-based company. And we call that the mothership or Mother Skanska. Mother Skanska, if you want to say it appropriately. And there’s this perspective, I think, that we get coming from Europe that’s a little more progressive in the first place. We’ve got 36 offices nationally in the U. S. But the Swedish perspective of really pushing things, and they’ve done more over there than we have here in some instances.
So You know, a lot of our mandates come from that European mothership. And, you know, when the climate agreement happened in Paris, Skanska said, we’re going to sign on as a business. We understand that emissions are one of the biggest factors in climate change. Building emissions are 40% of that. Construction plays a huge part. They committed to zero emissions by 2050. And then when the U. S. government pulled out of it, they said, okay, we’re doubling down. This is a true commitment. We’re actually going to start tracking and benchmarking and leveraging it more than just signing something.
So it was kind of like, yes, this is a good idea a few years ago, and now it’s imperative because if businesses doesn’t lead that, then we’re not going to get there. So there’s a strong commitment by Skanska to really understand as a construction company what it means to get to zero carbon emissions by 2050. And I don’t know of any other construction companies that are committing to that. There’s different parts of construction, so I can get into that too in terms of how we track and what we track. A lot of the times building emissions are thought about from the operational side of things.
So we think about the energy that we’re consuming once the building’s put in the ground and operational. But as energy gets cleaner, especially in places like Washington State where I’m based and buildings get more efficient based on code, that embodied carbon of all the stuff you’re putting in the ground in the first place becomes a much bigger chunk of the pie. You know, that’s the stuff that a contractor touches and quantifies and can impact.
Ross Kenyon: And how important is it to you to do things within your own supply chain and make sure that they are not emitting versus buying offsets or doing something else that is not directly related to the products you’re using?
Stacy Smedley: Well, it’s a much more direct impact to reduce first. So it’s reduce first and offset second. In the construction industry, there’s things that are always going to be utilized where it’s never going to be zero carbon. There’s really progressive goals of removing concrete and steel and going to wood, and we think that’s a great approach. But concrete and steel are never going away. And there’s an emissions associated with them that’s just part of their process. There’s no way that’s ever going to be zero. So it’s a balance, I think, of really impacting what you can and reducing what you can, and then finding really responsible, transparent ways to offset what you can’t.
And that’s where we are.
Christophe Jospe: So I’m curious, let’s get into the geeky details about emissions that are within the construction industry. And you also threw out a term that I know has come up in previous podcasts with Andrew Himes, but I’d like to define it again, embodied carbon. What does that mean?
Stacy Smedley: Yes, so embodied carbon is really the carbon associated with the manufacture, transport, and construction of a material in a building. So anything like steel, you’re talking about the manufacturing process of making that steel, the transportation cost and emissions of getting it from that manufacturing facility to the job site, and then the emissions associated with the contractor actually putting it in place.
Ross Kenyon: And you’re starting to measure that, but it sounds quite difficult to measure all of those things.
Stacy Smedley: It’s complicated. Yeah.
Ross Kenyon: And we don’t even make steel in the US anymore. That sounds like an extra.
Christophe Jospe: We do too.
Ross Kenyon: Don’t we like remake it or what’s the term for what we do with it? I don’t know. It’s recycled steel.
Christophe Jospe: Yeah, a lot of it’s recycled. Perhaps an ignorant question or a presupposition that we don’t make steel. Of course we do, but there’s a good deal of steel coming from China, which is sometimes A funny anecdote from a past life was an associate director at a small nonprofit and there was a whole bunch of junk in the basement that I needed to get rid of. And I ended up calling the junkyard and someone paid me about 100 bucks. And then when you really get into the emissions of all of that, it’s kind of crazy because...
Stacy Smedley: Yeah, absolutely. Sure. Yeah. So just in terms of materials, if you’re looking at a building, the core and shell of a building, which is really kind of the structural components are what make up about 80% a building’s emissions. So if you look at concrete, steel, glazing, aluminum, And gypsum board. If you look at those five things, you’re getting about 80% of the pie. So that’s really where we’re focused right now. And then if you dig down into each of those, you know, steel, it’s the process of making the steels, what’s emitted at the factory.
It’s the transportation of all the components and where you’re getting the content of the steel from. In concrete, it’s the cement that’s got the biggest component of emissions, where that cement’s coming from, how it’s made, how much cement you put in your concrete. You have control over that when you’re making a concrete mix. And then, you know, gypsum and glazing and stuff is just the process of making those things. There’s ways to... You know, if you’re looking at steel, for instance, this is going to get kind of nerdy, I think.
Hopefully people won’t turn the podcast off if I start to go down this path. So for steel, like specifically, if you’re looking at steel and you’ve got a plant in Washington, which we have, whose emissions factors are controlled by Washington state legislation. So they’re already the cleanest steel plant in Washington. And then you’re looking at steel from China. You have a choice as a procurer of that steel to pick the Washington state supplier versus the Chinese supplier. And there may be a cost associated with that in terms of how much it’s costing.
And that’s the thing you take back to the owner and they have to make a choice on really. But it’s really going to that level of thought in the design process when you’re selecting these things, which is not how it’s currently done in the design construction industries. You’re not thinking that way necessarily.
Ross Kenyon: People just think about what’s the lowest cost available to them.
Stacy Smedley: Correct. Yeah. What we’re trying to do at Skanska is actually build a mission factor into the data that we’re giving to owners. So when we’re doing our pre-construction estimating, creating the cost model for a project and design, they get the cost, they get the schedule impacts, and they also get the emissions factors associated with those choices. So they’re seeing it. And we can say, hey, if you choose this, it’s twice as much as if you choose that. It’s your choice. What are you going to do?
Ross Kenyon: Was it Andrew Himes or maybe it was someone else who’s talking about on the podcast about how people are willing to pay a premium oftentimes just to think of themselves in the clear? And maybe owners don’t necessarily care, but oftentimes the people who are buying those units or renting those units get excited about it. Would you agree with that?
Stacy Smedley: I would, but I think the owners care too. I mean, if you look at some of the clients and folks that are building things in Seattle or Washington and the commitments they may have on the carbon reporting on the operational side, where they’re committing to zero carbon and saying all these things about offsets, if they don’t care about what they’re emitting to build the buildings they’re putting all of their employees in, and they’re really not zero carbon in my mind or net zero, however we want to call it to truly get to zero carbon, they’re only looking at a certain component of it.
So owners that care about that, once they understand the amount of emissions associated with building that building is gonna take 250 years of that building operating to equal what we’re building and putting in the ground. Once you give them that kind of data, if they don’t have some kind of positive response to wanna at least think about it, there’s kind of a problem.
Christophe Jospe: So I moved to Seattle from New York City in October. And in New York, we like to build really big buildings. We have the ego for it. And it’s also geographically limited. So we need to build up. But when you build really tall buildings, that creates enormous energy constraint. And it also is something where architects are saying, whoa, okay, we realized the emissions of building this really big building is going to be bad. What can we do to make it look good? And so I want to qualify this. Anything you say is your opinion does not have to be that of Skanska’s.
But to what extent are some of the things happening in the construction industry, putting lipstick on a pig versus where are meaningful emissions reductions actually occurring that aren’t just trying to satisfy the hubris of someone saying, I want to live on the 112th floor so I can get a view of Central Park and out to the Catskills on a clear day. Because clearly, if you’re building a really tall building, there’s no way that’s going to look good on your emissions side. Or is it?
Stacy Smedley: I mean, this is going to get farther than just emissions. I mean, there’s tradeoffs about a building in the city that’s 100 stories and has that many people living in a very urban place. And this gets into kind of on the people side, you’re going down the emissions wormhole, right? That person’s living in the city, so they’re not driving 30 miles from a suburb where they’re in a smaller place that doesn’t take as much emissions to build a single family house out in, you know, wherever they are coming from.
Christophe Jospe: Maybe. They could be a Russian oligarch and are just flying to Moscow on their private jet the last month.
Stacy Smedley: Yeah, that’s true too. I have to think about New York City.
Christophe Jospe: I think it’s just another weird hypothetical layer that was tacked onto this question. We were supposed to throw soft pitches. That was maybe unfair.
Stacy Smedley: I’m trying to think of lipstick on a pig when it comes to missions because the first thing is you don’t know what you don’t know. So there’s just this ignorance about it. You’re not putting lipstick on anything. You’re not even... Dressing the pig up, it’s just not there. And I think that’s the first problem when it comes to the embodied side of things. Operational side of things, I think it’s just a matter of good design and being efficient. And there’s ways to get pretty close to zero emissions on that side of the table now.
Ross Kenyon: Just through emissions and cost savings on, you know, using less energy to heat the building, etc.
Stacy Smedley: Design choices, yeah. Yeah, we’re seeing the EUI, which is the energy use intensity of buildings going from, you know, in the hundreds down to in the forties, which is great. So we’re getting there on that side. We’ve been thinking about it a long time. We have not been thinking about embodied carbon for very long at all. So, you know, buildings that are getting built over there, they probably have no idea what their embodied emissions are. They’re not even tracking it. So it’s not even a discussion point.
Christophe Jospe: Skanska has been around for a long time. There’s a lot of operational experience. What sort of lessons have informed what it’s doing today? And particularly as it relates to reducing emissions, but really building new buildings of the future?
Stacy Smedley: This is really what brought me to Skansen in the first place. There’s an approach of you’ve got to lead. If you want to make change, you have to lead. You can’t always follow. So whenever there’s a new... So I think that’s the first thing is just Skanska taking this kind of first adopter role when it comes to these things. And then I think it’s just, you know, the practice of it, right? You have to find clients that are, owners are the ones that pay the bills and pay the design fees and all those things.
So you have to find owners that are like-minded, that want to kind of take that leap with you and try something. And become a first adopter as well and then kind of grow those movements. We’ve seen that in the certification side of things with buildings, with LEED or Living Building Challenge, starting, you know, being there when it started and then now seeing where they are. So I think it’s just applying that to the mission side of the table for us right now. We’re creating an open space. So there’s just leading and not feeling like it’s us against the rest of the industry, I guess, too.
That makes sense.
Ross Kenyon: And you’d like to have them emulate you and join you.
Stacy Smedley: Join us, yeah.
Ross Kenyon: Maybe look up to you a little bit. It’s nice to be the first one to do something. If someone has a question, they’re going to maybe come to you first. Or if they’re passionate about it, they’re going to want you to build their building. So there’s a marketing side of that too.
Stacy Smedley: But it’s really, if we have the ability to do something, why wouldn’t we share that and just make the industry better?
Ross Kenyon: Yeah, we love the open source ethos and love seeing that sort of sharing happen. Because, yeah, you could be really proprietary and secretive about that, too. And then would it really be as effective? You’d probably be doing it in isolation. Would you still qualify as a leader? You might just be having that competitive advantage internalized.
Stacy Smedley: Well, and if you compete on it, then there’s all these sources of data that aren’t the same. And it’s not the data is not as good when you’ve got 20 people making up their own data sets around emissions or whatever it is. I’m getting a little nerdy again because we’re dealing with this right now.
Ross Kenyon: You could just easily be a member of Nori the way you’re talking. This is exactly how we view data and open source methodologies as well.
Christophe Jospe: Well, also on standardization, because we can see the writing on the wall. It’s going to happen. Maybe the construction industry will be writing. Yeah, yeah. It’s particularly exciting because at Reversa Palooza, I’m not sure if it’s exactly the same or similar, but it’s kind of related to what Kate Simen and its group is doing at UW, where they are sort of collecting a whole number of other industries to talk about this. How are you related to that group?
Stacy Smedley: That’s funny. I love Kate. She’s one of my favorite people. I’m on the advisory board for her carbon leadership forum group. And I’m also the construction chair for the Embodied Carbon Network, which is a national group that’s pulled in over 200 people that are kind of thinking and passionate about this to get on task force and actually figure out how to work together.
Ross Kenyon: Is this like the lifecycle analysis crew?
Stacy Smedley: Yes.
Ross Kenyon: Oh, okay.
Stacy Smedley: Yeah, yeah. Skanska funded a benchmarking study that they completed two years ago to just get as many data sets as we could around LCA and try to figure out if we can normalize the data. Can we? Well, the data is coming from different sources. And I guess that’s the issue that we’re running into right now is if we want to get emissions factors for things. And there’s five different entities setting those emissions factors in their silos, you know, and they’re all doing it with the best intentions. I think, but you know, one’s different than the other, you know, building uses this one versus that one.
And then you try to get their results and, and normalize them against each other. It’s just not transparent. You don’t really understand how close they are. Our benchmarking study gives you kind of a 20 to 80% range of embodied carbon per building type based on LCA is coming from different data sources, which is something, but it’s not as good as it could be.
Ross Kenyon: It sounds like a coordination game, theoretic problem. Like you should all just agree on one standard. It doesn’t matter necessarily whose it is. Maybe it should be yours. But I’m sure you would like that. It’s probably better that everyone just agree on one. So it’s actually you can normalize it. But I’m sure there’s debates on which is more accurate. And I’m sure some people’s buildings look better under some than others. And is that part of the discussion of how to solve problems like that? Is it politics?
Stacy Smedley: It’s politics. I think it’s, you know, competition too. People can’t do all this stuff for free. You’ve got to have a way, you know, if you have good intentions, you have good intentions, but unless you’re getting paid to create that data and put it somewhere, it’s hard to do it, right? You can’t just do it in your free time. So people are creating businesses around it and finding ways to make a living off of it. And that then needs them to protect the data because it’s proprietary to them. And then that’s what’s valuable.
Ross Kenyon: And then you’ve outflanked them by it being open source and trying to aggregate this together.
Stacy Smedley: Right. But I mean, we’re still trying to find the source of the data is the hard part. I mean, we’re talking about going, you know, if we know we’re going to procure this deal from this place or this concrete, this mix, we’ll go to the source and get our own emissions factor that’s specific. But right now, if we want to provide a client with an embodied carbon number, we would be using one of those data sets to give us the emissions factors quickly. So which one’s better? How do we partner with them?
Can we talk to more than one? How do we access their data? All these different nuances. And we’re working through that right now, honestly, and running into roadblocks about how far they’ll let us look into the spreadsheets.
Ross Kenyon: Oh, that’s complicated. I want to talk about wood buildings. Are you okay with that?
Stacy Smedley: I’m ready to talk about wood buildings.
Ross Kenyon: I’ve long been interested in this and think it’s so beautiful. Every building I’ve been in, there’s a couple of pretty, pretty large buildings in Seattle that are wood. And I’ve been in a few of them and they are quite lovely. Where’s that going? What are the problems? Skanska, are you guys trying to do that? Do you build wood buildings now?
Stacy Smedley: We have a little bit. Our portfolio is larger buildings typically, but we have a development arm where we commercially develop our own work. We self-fund, self-develop, self-build. And those projects is where we’ve actually looked at the costs associated and kind of the comparison of costs and emissions and everything on buildings up to 10 stories.
Ross Kenyon: How does it stack up?
Stacy Smedley: It’s still more costly. And, you know, this is just like anything that’s new. Costs go down as efficiencies and availability grows. So as more folks come online that are providing things like CLT, mass timber.
Ross Kenyon: What is CLT?
Stacy Smedley: It’s cross-laminated timber.
Ross Kenyon: I think if you heard that and you never heard of that, that wouldn’t help you know what that is.
Stacy Smedley: Can be produced quickly. They’re smaller profile trees, right? So they’re not going to give you huge beams. So how do you make a strong wood component out of small trees? So they take those trees and put them into two by fours or two by sixes and they cross them over each other back and forth to create these cross laminated panels that are very structural.
Ross Kenyon: They like weave parts of trees and then they put plastic over it. Is that the lamination is?
Stacy Smedley: It’s not plastic, it’s like a glue.
Ross Kenyon: A glue.
Stacy Smedley: Yeah, that binds it together and they press it.
Ross Kenyon: Okay, and you’re saying right now it just isn’t cost effective. Are you taking into account the embodied carbon in that calculation?
Stacy Smedley: Yeah, it’s really complicated. There’s debates going on right now about that too.
Ross Kenyon: Is it because there’s no price on carbon?
Stacy Smedley: That could be part of it. But even just because when you think about embodied carbon, you’re going all the way back to the source, right? So that in that case, it’s all the way back to where the trees are being harvested from and how you’re harvesting the trees and, you know, what that’s doing to emissions, which is a huge complicated thing that hasn’t been very well understood yet. Like if you go to a forest and you clear cut it and you build consolidated timber out of it, then what’s happening at that source location in terms of all sorts of things, emissions included, but runoff and forest health and all that.
Ross Kenyon: That sounds probably worse than just using steel or something, potentially, but maybe not.
Stacy Smedley: Depending, yeah. I mean, there’s advocacy around just, you know, there’s folks in Washington that go into forest thinning for forest fires, and that’s where they’re sourcing this wood. So it’s something they’re doing anyway.
Ross Kenyon: That’s good.
Stacy Smedley: To help with fire prevention, which is, of course, emissions related. How do you quantify that into an actual emissions number for CLT? So there’s all these kind of nuances of it. But if you can source the wood from a responsible source, then it’s a very good thing. But as the industry grows, how do you ensure that’s what’s happening?
Ross Kenyon: There’s a bunch of projects that are blockchain related that focus on provenance and supply chain transparency. So we’ll see if some of those pan out. I’m sure there are non-blockchain projects that are trying for provenance. Is that so? I don’t know anything about those, though.
Stacy Smedley: I don’t really either, to be honest.
Ross Kenyon: Oh, OK. People are working on it and everyone wants this thing to exist. So someone’s going to make a lot of money figuring it out. I just haven’t picked a horse in that race.
Stacy Smedley: Maybe you should. It’s not even about the money.
Christophe Jospe: It’s about where do you draw the boundary so that you can be honest in your life cycle. Because if bad things are happening in my forest, but I’m like, oh, getting my wood sustainably harvested and I paid some guy over I mean, that’s really the underlying issue or opportunity around all of this, right?
Stacy Smedley: It’s just transparency and honesty all the way back to the source of whatever it is you’re tracking. And that’s what we’re trying to get to when it comes to those core materials right now.
Christophe Jospe: We could figure this out on the podcast in like two minutes. I’ll tell you how it’ll work. You’ll have satellite imagery, which can tell you exactly what trees are where, and you can correlate that to when you cut those trees down. And then you have some on the ground data and it tracks in some large supply chain and it’s all interoperable with data that might relate to getting paid for storing carbon and that would it well, which nobody cares about, but like we’re all in this together. Let’s figure it out because there’s a limited amount of carbon budget left until we’re really in deep water.
We try not to focus on the doom and gloom, but I agree with Ross. I think having the provenance right or at least good enough and in a way where the data can grow with and get better as you just put it out there. And I think that really embodies what it is that we’re all about. No pun intended in bodies. There was a pun intended at all.
Stacy Smedley: Okay.
Unknown speaker: You intended that?
Christophe Jospe: I intended that pun. Yeah, I don’t want to buy it, but okay. So, okay. Cross-laminated timber. It’s sexy. It’s cool. It’s a trend. What else? What are the other opportunities that are, when we look ahead to like sustainable construction, what does that mean?
Stacy Smedley: Carbon sequestering concrete. Things where you’re actually taking materials and you’re embodying the emissions in them.
Ross Kenyon: How does that work? I heard there’s some curing process or something like that?
Stacy Smedley: Yeah, it’s in the aggregate. So it’s basically you’re replacing the cement that has a high emissions factor with something else that’s actually containing carbon emissions, basically embodying them in the aggregate material.
Christophe Jospe: It makes sense. And I love it. But I also want to like jump up and down and say, don’t forget that you’re still getting the lime from the limestone, which is responsible for 50% of the emissions. So when they say this is carbon negative concrete, I call BS.
Stacy Smedley: I’d say it’s carbon negative aggregate.
Christophe Jospe: And he’s like carbon cure and others really just making a lot of progress.
Stacy Smedley: They are. Yeah. There’s a legislation too, that’s kind of helping this, which we haven’t talked about at all in terms of kind of where things are going. You mentioned that maybe you’ll be forced to do this someday in the construction industry. And in California, we are for certain materials. We actually actually, you know, have a certain emissions factor and be tracking things from certain sources. And then Washington tried to pass the same thing this year. Didn’t pass, but they’ve got funding to help understand how they should pass it next year in terms of setting factors and things.
So around those types of things where we’re going to have a global warming potential, you know, emissions factor associated with concrete, we have to meet. Those types of things like carbon cure and other opportunities to reduce are going to be more important.
Christophe Jospe: Great. I agree. And I think it’s exciting. And that probably is just one other large piece of data that fits into this large open source project you guys are working on. That’s really exciting. What are some of the other things that the construction industry can look to?
Stacy Smedley: There’s all sorts of things. We talk about two categories, I guess. We’re talking a lot about there’s inside the fence and outside the fence. So inside the fence is stuff that we own or are doing on site when it comes to our vehicles and our equipment and how we’re building stuff and utilizing job trailers and energy and all sorts of things. That’s our scope one and two, really, emissions.
Ross Kenyon: It’s all Teslas, right?
Stacy Smedley: Oh, I wish. That would be fantastic. Skanska, are you listening? And then scope three is the embodied carbon that we’re talking about. So that’s actually something we don’t necessarily control 100%, right? We’re just providing information and kind of pushing folks to think about it and care and invest in reductions.
Ross Kenyon: You have influence with the people you procure from.
Stacy Smedley: We do. Yeah. Yeah. And that’s one of the things I love about Skanska is it’s not, again, where I think where I made the shift where, you know, I’m an architect working on one project.
Christophe Jospe: Hi, I’m Stacy from blah, blah, blah, architecture firm. I want you to change your concrete mix.
Stacy Smedley: Or it’s, hey, I’m Skanska. We have 36 offices and we procure X, you know, thousand cubic yards of concrete per blah, blah from you. And we want you to change your mix.
Ross Kenyon: People return your phone calls. Yeah. Throw your weight around a little bit.
Stacy Smedley: Yeah, it’s good. I mean, I think being smart and leveraging that is another thing that I’m proud Skanska is willing to do.
Ross Kenyon: When I think of Sweden, I think of bullies is what I think of.
Stacy Smedley: Oh, yeah. Big, tall, blonde, good-looking bullies.
Ross Kenyon: The bad guys in teenage ski movies. Ikea products that I can’t pronounce. Yeah, I like the Flurgenstomp. It’s a great product.
Stacy Smedley: You always know in like leaderships from Sweden is in the office because it’s this group of incredibly attractive, tall, blonde people that are walking in a little cluster around the office.
Ross Kenyon: Very nice.
Stacy Smedley: But anyway, so the inside of the fence scope one and two stuff is stuff that we can just do. We don’t have to, you know, have our clients tell us that it’s okay and they’re going to pay a little more for something or we can look at it. So that’s Kraftwerk of Transit and vehicles that we’re having on site that can be electric versus, you know, gas driven and things like that. So we’re working on that too. And that’s easy for us to just take care of.
Ross Kenyon: When I’m ready to build a house, are you going to design it for me?
Stacy Smedley: Yeah, I do like this. I will say I miss design A little bit. And so, yes, if there’s opportunities for me to do a little side projects and create a zero carbon home for you, I would do that.
Ross Kenyon: Yeah, I’ve seen the passive houses. That’s what they’re called, right? Yeah, those things are quite cool. And I think especially in Seattle where like seasonal affective disorder is so bad, I think being able to design an appropriate home might be quite good.
Stacy Smedley: Yeah, living buildings are also awesome.
Ross Kenyon: Yeah, I don’t understand the difference. I know there’s so many different standards and I don’t understand the difference between all of them.
Stacy Smedley: Yeah, living buildings are my favorite.
Ross Kenyon: What’s so great about that?
Stacy Smedley: I could do a whole hour on this. I will try to be succinct in my living and building love. But so it’s a certification system that’s really holistic and it goes kind of beyond just reductions into net positive. So you have to be net positive on energy and water, which means that you’re producing more energy on site than you’re using and you’re treating all the water on your site without any connection to a pipe. So... You know, toilet water, gray water, anything that you’re using for potable water has to be something that you’re collecting on site.
It’s based on the metaphor of a flower. So however a flower would act in nature is how a building should. It should be made of natural stuff. It should be beautiful. But yeah, it’s really pushing you to be net positive, which is, I think, emissions is part of that, right? But it’s holistic about that.
Ross Kenyon: It’s called net metering when you can sell the electricity back to the grid. Does that exist here?
Stacy Smedley: Yes, that’s how it works here. Yeah.
Ross Kenyon: Okay. I mean, I would love that. I think it appeals to me almost more for the efficiency sake. I like the idea of producing stuff just without even much effort at all. I’m sure plenty of people would like the cost savings of that too. But I assume you have to amortize the cost of this over a longer period of time versus a conventional building. Or is it becoming cost competitive?
Stacy Smedley: So it was becoming cost competitive until there were tariffs on solar panels that came up.
Christophe Jospe: We hate tariffs.
Stacy Smedley: Yes.
Christophe Jospe: But we love built in America.
Stacy Smedley: We love America. Built here. But don’t squash kind of innovation at the same time. Anyways, that’s a whole other thing, right?
Ross Kenyon: If you want to complain about tariffs, well, we will let you.
Stacy Smedley: Well, steel is a problem too, although it’s good because it’s making us procure it here instead of from far away.
Ross Kenyon: For your transparency purposes.
Stacy Smedley: For the transparency purposes, but from a cost perspective on projects right now that need it. It can’t just be an immediate thing where you say, hey, tomorrow it’s going to be more expensive. Let’s just see how it happens. It should be something that’s kind of planned, right?
Ross Kenyon: But the solar panel tariff is just pure bad.
Stacy Smedley: In my opinion, it’s doubling the cost of the payback. So we were getting to the point where here they’re on a project that maximized solar, you know, is a 10-year payback on the system based on incentives and the cost of the panels. Now it’s back up to 20 years again based on what’s happening with the tariffs.
Ross Kenyon: That’s a long time, especially the life of a mortgage is what, like 30 years typically. So that’s a pretty big increase for... Life of your home. What were you going to say, Christophe? You going to jump in there?
Christophe Jospe: Oh, I was just going to ask a kind of geeky energy question. So living buildings, you’re sort of net positive, producing more energy than you consume. And I imagine you’re doing that mostly with solar on your rooftops or around the building, wherever. But it’s only really going to produce energy about eight hours of the day. So is the rest of the time, are you just... In those eight hours, producing more energy as a net that building consumes, and then still getting energy from the grid? Or, okay, you’re nodding. So that’s what I thought.
But is the kind of the long term vision of living buildings to have these kind of completely resilient off grid buildings, which truly are Sort of powerhouses.
Ross Kenyon: Maybe they’ve got some power walls or fuel cells and electrolyzers to make carbon neutral fuels. It’s like, did you play SimCity and they had the Arcologies where they had like those like towers that were totally, you know what I’m talking about? Yeah. Yeah. There’s like the Arcology, right?
Stacy Smedley: Kind of. Yeah. I mean, so right now they’ve gotten to the point now where it’s net metering where you’re giving back and taking, you know, you’re taking it when you need it. You’re giving back when you’re not using it in terms of energy, but they do require battery storage for certain things right now. So they’re kind of ramping up That and the standard, you know, here, if you’re talking about net metering, we have such a clean energy grid right now.
Ross Kenyon: It’s all hydroelectric, right?
Stacy Smedley: Yeah. In terms of emissions that the net metering kind of makes sense. But as, as energy changes, there’s much more kind of district, you know, personal scale that we’re going to be looking at in terms of storage. Yeah. Battery technology is getting way better too.
Ross Kenyon: Yeah. I’m looking forward to those advances. I think every time I check it’s some sort of major milestone is passed for that.
Stacy Smedley: Yep. I think it’s a good lesson. So that’s where I talk about operational versus embodied. If you think about where we were operationally 10 to 30 years ago, just take the scale all the way back. We’ve innovated so much now in terms of how efficient we can be and how we can actually get that close to net zero, net positive. We can talk that language without being like, you’re crazy. You’re never going to get to net positive energy on a building. Now it’s happening, right? And we’re like at that zero to five year mark on the embodied side.
And that’s what I’m really excited about is I think it’s We’re not going to get to zero emissions unless we take care of that, too. So let’s innovate on that side now.
Ross Kenyon: I have a question. And because I’m asking this question, I know the podcast is almost over. Increasingly. You got something, Kristoff?
Christophe Jospe: No, I want to talk about Nori. So I don’t want to end this podcast just yet. Ask your question.
Ross Kenyon: We should talk about Nori. Oh, man. I might have to cut this. What’s with those buildings in Seattle that are like those three story like square ones that are all like metal and hard lines and they exist everywhere?
Stacy Smedley: Like I need an example of what you’re talking about.
Unknown speaker: Are you talking about the townhomes that are everywhere?
Ross Kenyon: Yeah.
Stacy Smedley: Oh.
Ross Kenyon: Why are they everywhere in Seattle? Why is that the choice we’ve made?
Stacy Smedley: We’ve got like five podcasts right now that we could branch out on. This is density related and just show zoning changes where they’re taking single family areas and making the ability to make them denser, which is going to this kind of low rise townhome approach.
Ross Kenyon: Like building up a little more, not craftsmen.
Stacy Smedley: Yeah, you know, four homes on a site versus one. So it really did define the city. And the developers see an opportunity there to buy a single family lot and kind of quadruple their money. And that look that you’re talking about is a very cost effective way to do that, if I’m being politically correct here.
Ross Kenyon: Yeah. Sleek, modern, clean lines.
Stacy Smedley: Clean boxes with, you know...
Ross Kenyon: My wife hates them. She’s like, I want a craftsman. I just want like a totally redone craftsman on the inside. That’s like our aesthetic that we...
Stacy Smedley: Oh, we have one that went up. There’s also the problem of people coming in and demolishing that craftsman that could be renovated and just building one big box on a single family site, which happened two doors down. My husband calls it the great white. It’s this wall of white that we look up at every morning. Oh, no. But I call it boxitecture. So it’s not architecture. It’s boxitecture. It’s happening a lot.
Ross Kenyon: Throw in some architectural shade there. Yeah. Yeah.
Christophe Jospe: So that’s a local problem. I’d like to take a step back to a global problem, global climate change. You’re on the Reversing Climate Change podcast. As you know, it’s a function of there being too many greenhouse gases in the atmosphere. We crunched some numbers the other day and we thought, all right, we want to get down to around 300 parts per million carbon dioxide in the atmosphere, which requires removing 1. 5 trillion tonnes. And Nori, there’s no way we’re going to even get close to removing all of that. But we’re creating a new market mechanism, a financial instrument.
So if you’ve put up a metric ton of carbon dioxide, you can buy a carbon reduction.
Stacy Smedley: And just to pick up on something that you said earlier is we at Skanska are focused to get to zero by 2050, zero emissions. And in order to do that, we are going to reduce everything that we can and offset, even though we try to stay away from the word offset. We realize ultimately we can’t. That’s what we’re doing.
Christophe Jospe: But we’re not calling our instrument an offset. Maybe negate, maybe reverse, but whatever. Balance out your emissions with the rest. So here comes Nori. We’re a new company. We’re trying to just build this in a trustless way that can scale much more quickly. Well, first of all, how would that work theoretically to help Skanska meet its goals?
Stacy Smedley: Yeah. So there’s two parts to that. There’s our internal goals where we’re looking at our scope one and two emissions and how we can get to zero, right? And we’re not going to get to zero by just reducing. There’s just no way. Construction has emissions associated with it. So yes, as a company that’s committed to responsibly getting to the target we set, doing that in a way where it’s actually, I’m trying to think of a cool word for you to use, negating the carbons.
Ross Kenyon: We’ve been debating this actually.
Stacy Smedley: Yeah. There’s gotta be a cool word for this. It’s not sequestering it. It’s basically, it’s not removing it. You’re negating. I guess you’re kind of negating it.
Ross Kenyon: Some people said reversing, but Kristoff kind of hated that one.
Christophe Jospe: I mean, there’s so many like second level.
Stacy Smedley: It’s not reversed because it’s there, right? Carbon’s there, but what do you do? Obviate. Anyways, doing that versus, you know, kind of what’s out there right now, which is helping, you know, build a wind farm or there’s all these things that we can do that’s offsetting really in terms of, you know, where energy is coming from or whatnot. I think it’s a more... Transparent and directional way to do it. So that’s exciting, I think, as an option. And for clients, too, where we’re telling them, you know, hey, you know, client X, your construction is going to produce 800,000 tonnes of emissions.
What are you going to do? We’re going to reduce as much as we can. But what about the 500,000 tonnes that are left? Let’s find a way to make what you’re doing there a story. To tell, right? Instead of just, hey, we bought an offset over there and, you know, it’s certified and I have no idea what it’s doing. So there’s something exciting about what you guys are doing around that I think we’ll want to know more about and stay on top of as you continue to build it. I’m excited about tomorrow, honestly.
Christophe Jospe: Yeah, we are too. I think it’s cool because this podcast is actually going out after the event. So it’s like our listeners will be like, oh my God, what happened at Reversa Palooza? And they’ll just have to wait for future podcasts.
Stacy Smedley: Well, there you go.
Christophe Jospe: Yeah, we’re all very excited.
Ross Kenyon: And all the videos, we’re going to be recording all the panel discussions and talks and putting those up online afterwards.
Stacy Smedley: Yeah, you have a great group of attendees. I looked at the list. Yeah, in terms of who you’re bringing in, perspectives.
Ross Kenyon: Although I walked into the bathroom and saw Kristoff crying in a little ball this morning. Are you nervous?
Christophe Jospe: Yeah. Very, very. I’m staying at the Marriott, you know, brought my bathing suit, going on like a three-day vacation. I’m not even going to show up to the conference. I’m just going to wave. I’m just going to cross the street.
Unknown speaker: Can you just wave from the pool or something?
Christophe Jospe: Yeah, I think so. Okay, on that note, this has been wonderful. Thanks so much, Stacy. We’re really looking forward to hanging out the next two days. And this has been incredibly insightful. So thank you.
Stacy Smedley: Of course. Thanks.
