The Regulatory Landscape for Embodied Carbon & The Impact for Owners

Aug 20, 2025

In our last blog, we explored embodied carbon and how profoundly the early understanding and coordination around carbon goals can improve project outcomes across the board.

Contemplating the right issues early—about life cycle assessments (LCAs), Environmental Product Declarations (EPDs), or carbon intensity benchmarks—can uncover risks before they have an impact. This discussion is not only significant for sustainability outcomes, but for supporting with and anticipating current and future investor goals, public funding opportunities, and regulatory disclosures.

As a continuation to our last piece, it’s important to know that embodied carbon is now part of the regulatory landscape, and how embodied carbon is rapidly becoming a formal part of building policy and permitting frameworks across the U.S. California has taken the lead with the first mandatory code, and several other jurisdictions are moving toward formal requirements. Here’s a snapshot of where are gaining traction:

California: CalGreen (Title 24, Part 11) is the nation’s first mandatory green building code to include embodied carbon requirements, effective July 1, 2024. Developers of large commercial and school buildings must choose compliance routes focused on whole building LCAs, material reuse, or EPD-based prescriptive limits.

Oregon (House Bill 3409, Section 7): Low Embodied Carbon Housing Program & Buy Clean Legislation - Oregon’s Department of Environmental Quality offers incentives for low embodied carbon housing to reduce material Global Warming Potential (GWP) by 10%, and House Bill 4139 requires LCAs for select state infrastructure.

Washington (House Bill 1458): Embodied Carbon Appendix & Upcoming Code Changes - Washington’s Building Code Council has proposed Appendix Q to benchmark and reduce embodied carbon during design and construction. HB 1458 seeks a 30% reduction in embodied carbon by the 2030 code cycle.

Denver (Green Code, Chapter 9): Denver’s 2022 Green Code includes embodied carbon limits and reporting for structural materials like concrete and steel.

New York (Executive Order 22 & Buy Clean Public Works Mandate): New York State’s GreenNY Council issued embodied carbon reporting guidance under EO 22 (January 2025), including EPD disclosure. New York also passed Buy Clean standards for concrete in public contracts.

Vermont, Massachusetts, New Jersey: Exploring or piloting carbon disclosures in building permits includes embodied carbon limits and reporting for structural materials like concrete and steel.

While each state is taking a slightly different approach, the shared trend is clear: embodied carbon is becoming a factor in how materials are selected, reported, and regulated, particularly for public and large-scale projects.

Building life cycle assessments follow recognized international methodologies. The U.S. General Services Administration references EN 15978 (European Committee for Standardization, the go-to standard for whole-building LCA methodology in practice) for life cycle stages and aligns with ISO frameworks like ISO 21930 and ISO 21931 (International Organization for Standardization—standardizes how product-level environmental data is created and shared) in its guidance.

What Financial Institutions and Owners Should Know

Embodied carbon is no longer just a design team consideration. For financial institutions and building owners, it’s becoming a meaningful factor in long-term asset planning, climate risk exposure, and project evaluation. The questions are shifting—from “Is this building energy efficient?” to “What are the carbon impacts of how it’s built, and how might those impacts affect permitting, regulatory compliance, investor reporting, or long-term asset value?”

At Marx|Okubo, we’ve seen how early coordination around carbon goals can improve project outcomes across the board. Our role is to support that dialogue, offering data-driven insights that help owners, capital partners, and designers make more informed, resilient decisions without disrupting design intent or delivery timelines.

While embodied carbon policy is still gaining traction in many jurisdictions, we’ve already helped clients respond to performance-based code changes in states like California and Washington—interpreting requirements, reviewing compliance documentation, and identifying where early analysis could reduce future risk. That regulatory fluency now extends to embodied carbon as LCA requirements move from optional to expected.

As embodied carbon regulations continue to evolve, so will the expectations for what projects must measure, report, and reduce. Teams that are preparing now, rather than reacting later, will be better positioned to navigate the shift with confidence. Understanding where your project or portfolio stands today is the first step. Marx|Okubo supports that process through lifecycle-focused assessments that bring carbon, cost, and compliance into alignment at every stage. Questions? Please get in touch.

Contributors: Dustin Casper, Robert Phinney, Noelani Maylad, Annie Chang, and Erin Walrath