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Even before projects reach the shovel-ready phase, a “business as usual” mindset can stunt sustainability goals, says John Delaney, sustainability director at Beyer Blinder Belle Architects & Planners. While owners consider project costs in dollars and cents, “carbon cost” adds another standard to how they can think more green, he says.

Materials and supply chain decisions that have “the most impact on carbon cost” often come early in the design process, says Delaney, “so more effort and rigor must be allocated to this stage.” To do so, owners, designers, contractors and subcontracting partners must understand how greenhouse gas emissions generated during production, transportation, installation and disposal of building materials, known as embodied carbon, can affect the carbon footprint throughout a project’s lifecycle.

“The regulatory environment has thankfully pushed the industry to adopt more stringent performance requirements,” says Delaney. “But as the quantity and complexity of data increases, a literacy gap can slow implementation.”

Overall, revenue for Top 100 Green Design Firms remained relatively flat from 2022-23, rising slightly to $9.37 billion from $9.36 billion. International green design revenue fell slightly, to $1.79 billion from $1.82 billion, and median design increased slightly to $28.1 million, from $27.9 million last year.

For the Top 100 Green Contractors, revenue rose 6.4%, to $91.41 billion in 2023 from $85.88 billion in 2022. International green contracting revenue increased to $3.92 billion from $3.55 billion, and median firm green contracting revenue came in at $345.4 million, up 4.9% from last year’s $329.2 million.

With third-party sustainability certifications evolving—such as LEED, WELL, BREEAM, Green Globes, and the Living Building Challenge—and decarbonization incentives baked into recent federal spending packages, Top 100 firms say there is a disconnect between growing policies and the knowledge needed to put them into practice on jobsites. As a result, Top 100 firms say many owners are finding themselves at a fork in the road over managing third-party certification requirements or maintaining the status quo.

Knowledge and know-how is key to keeping project and carbon costs low, says Delaney. Beyer Blinder Belle is ranked No. 29 on the design list this year.

“In this case, knowledge must flow up to leadership,” he says. “Awareness is a crucial first step.”

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Challenging the Status Quo

Gilbane Building Co.’s executive sustainability officer, Tabitha Scott, says the rapid evolution of sustainability is pushing the green building market forward. Regulations and technologies challenge businesses to “stay current,” adds Scott. The firm is ranked No. 7 on the green contractor list.

“This accelerated pace of change requires continuous learning and adaptation, which can be resource-intensive,” explains Scott, but not impossible. “In the United States, the requirement for validation of sustainability practices is still emerging, so there’s a significant amount of catching up to do to meet these standards.”

In the survey results, Top 100 Green Design Firms and Contractors named a mix of near-term and long-term challenges impacting the growth of the green building market. Yet as companies and projects set decarbonization targets, firms say cost and schedule crunches can be barriers to action without early sustainability integration.

Fiona Cousins, Arup’s Americas chair, says the firm is focused on “a whole systems approach” to design that accounts for organizational, social, governance and policy-related issues. An example of this approach is the firm’s recent Rail Resilience Framework, “which aims to protect and adapt our infrastructure to deliver for transformative outcomes for people and economic growth, and co-benefits such as greenhouse gas emissions reductions” explains Cousins. Arup is ranked No. 3 on the green design list.

“The giant challenge ahead of us now is how do we truly get to zero emissions.”
Eric Corey Freed, Sustainability Director, CannonDesign

Firms ranked in the Top 10 of the green design list account for $5.34 billion, or 57% of the total design revenue. Last year, the Top 10 accounted for 53.7% of the total. Firms ranked between 51 and 100 accounted for $639.43 million in combined revenue, down 2.2% from $653.64 million last year.

“We have been able to produce buildings that generate more energy than they consume. Our challenge now is in the emissions stemming from the construction of the buildings themselves,” says Eric Corey Freed, sustainability director at CannonDesign, ranked No. 12.

Freed says embodied carbon costs, from the manufacturing, transport, and assembly of buildings, are pushing the firm’s clients to explore low carbon and biogenic materials such as mass timber and hemp.

“The giant challenge ahead of us now is how do we truly get to zero emissions,” says Freed. “Given the massive embodied carbon footprints of concrete, aluminum, steel, and glass—how do we build toward zero carbon at scale?”

For Curtis + Ginsberg, the firm’s ongoing challenge has been to keep its clients committed to the “long view,” says Director of Sustainability Crystal Ng, with investments in low carbon materials and sustainable technology such as photovoltaics, rainwater harvesting, energy-efficient facade and window systems. Such additions can frequently have a higher up-front cost but add value in the long-term, says Ng, who has been implementing C+GA’s sustainability, resiliency and wellness goals in accordance with the American Institute of Architect’s 2030 Challenge to make all buildings net-zero carbon by 2030.

Key Market Sectors

Top 100 design revenue shows the airports market saw the largest gains in green design revenue between 2022 and 2023, up 72.9% over last year. The sports, entertainment and civic market rose substantially, up 37.8%. The largest decreases included the retail market, which fell 32.4%, and the hotels/hospitality market, down 27.5%. Both markets previously saw substantial growth between 2021 and 2022.

Green contracting revenue rose 75.9% between 2022 and 2023 in the industrial/manufacturing market. Design revenue in that market fell each of the past two years. The multi-unit residential market also rose significantly, up 19.2%. As with the design firms, revenue totals in the retail market (down 29.9%) and hotels/hospitality market (down 18.4%) fell the most.

“Decarbonizing the built environment is one of the most urgent priorities of our time. Yet, many challenges remain in adopting sustainable approaches and technologies to change course,” says Elliot Glassman, building performance leader at CannonDesign. “We cannot defer action now as it will mean the rate of change will need to be more dramatic in the future to avert the worst environmental consequences.”

Cultivating Collaboration

Yet with stringent standards and growing demands to meet third-party certification, the industry must also supply the tools and knowledge resources to help get everyone on the same page, says Beth Tomlinson, discipline leader, carbon and climate, at Stantec Inc. The firm is ranked No. 8 on the green design list.

“The building industry is targeting net zero emissions by 2050 across the whole life cycle,” says Tomlinson. “Consultants need to know how to document performance and compliance. Those that review and issue permits need the right resources to verify designs. The industry needs a consistent methodology that it can reference, and it must be repeatable, as well as code enforceable.”

“Navigating the labor market comes with its own set of challenges, including securing specialized talent.”
Sarah Rosen, Chief People Officer, Arup

In order to break down knowledge silos and scale up green building practices, Top 100 firms say more collaboration is needed across the AEC industry. There is “fear of client pushback across all scales of the design and construction team,” says Rives Taylor, global resilience research leader, Gensler. The firm is ranked No. 2 on the green design list.

“While more of our clients are beginning to understand the importance of sustainability, the challenge often lies within their project management teams,” says Taylor. “Partnering effectively with the client’s operational teams is crucial for achieving both operational and long-term sustainability.”

Design-build and other alternative project delivery methods are helping to bring project partners in early, Top 100 firms say. Yet amid industry-wide labor challenges, a sustainability-minded workforce adds another layer of complexity.

“Navigating the labor market comes with its own set of challenges, including securing specialized talent such as electrical and mechanical engineers that can deliver innovations specific to health care, energy and rail infrastructure, for instance,” explains Sarah Rosen, Arup’s Americas chief people officer. However, Rosen says the emergence of green jobs adds “another critical piece to talent acquisition.”

At HOK, ranked No. 5, the design firm says all of its jobs are treated as green building related, says Anica Landreneau, global director of sustainable design.

“Every design professional at HOK has a responsibility to participate in sustainable design,” says Landreneau. “We have deeper-dive expertise to help set the vision and manage the process (including certifications), but fulfillment comes through the day-to-day commitment, optimization and thoughtful design by every professional and every discipline.”

Landreneau says the firm combines regular sustainability training for its project managers and project administrators with its efforts to recruit design professionals with a “passion and expertise around sustainability.”

“We require that all design professionals obtain a minimum LEED or BREEAM credential within six months of employment,” says Landreneau. Additionally, “Every project must set aside at least 40 hours to assess opportunities and strategies for passive design, decarbonization, resilience, health, well-being and equity,” she adds.

Training Trade Partners

Tracking real-time carbon emissions on jobsites down to the contracting and trade partner level presents knowledge and skill challenges, explains Steven Burke, senior director, sustainability, at Suffolk Construction. The contractor is ranked No. 8.

“There is a shortage of highly qualified technical consultants to guide more rigorous certification programs, such as Passive House,” says Burke. “To address this challenge, at Suffolk we have increased our internal technical capabilities that were typically the responsibility of third parties. This has allowed us to add more value for clients while having more total control over project outcomes.”

“There is a shortage of highly qualified technical consultants to guide more rigorous certification programs. ”
Steven Burke, Senior Sustainability Director, Suffolk Construction

Pepper Construction says an increased interest in tracking Scope 3 emissions has increased demand for general contractors to collect jobsite emissions.

“The challenge lies in being able to collect accurate data from trade partners and deliveries,” says Susan Heinking, senior vice president, high performance and sustainable construction. “In most cases, this request is something that they have not been actively tracking to date and may require our assistance to establish a standard process.”

The top 10 green contractors reported $43.16 billion in green contracting revenue, approximately 47.2% of the total. In 2022 the top 10 accounted for 49.5% of the total. Firms ranked between 51 and 100 combined for $7.58 billion in revenue. That is up 12.0% from $6.77 billion last year.

Skanska, ranked No. 17 on the contractor list, says it has scaled up its sustainability educational resources to ensure its employees are knowledgeable on green practices. The contractor also recently led the AGC task force to create the “Decarbonization & Carbon Reporting Playbook,” designed by contractors for contractors to help track and report greenhouse gas emissions for the projects they build, explains Steve Clem, Skanska USA Building senior vice president of project planning services and sustainability.

Skanska points to its work on JFK Airport’s Central Terminal Roadways, Utilities and Ground Transportation Center in Queens, New York, as an example of sustainable success. Clem says reusing materials such as existing bridges and lighting vault infrastructure, “kept our costs down and helped the customer achieve their carbon reduction goals.”

Clem adds, “The project includes many sustainability aspects: It has an Envision goal, a green roof, rainwater harvesting, as well as provisions for future photovoltaic panels on the roof.”

Policies Driving Sustainability

As much as megaprojects can raise the bar on sustainability goals—such as Alphabet’s all-electric campus in Mountain View, California and JP Morgan’s reported $3 billion all-electric tower planned for New York City, —Top 100 firms say federal, state and local regulations are helping to drive sustainability from the ground up.

“Building performance standards are the biggest deal in public policy for supporting greener buildings and are currently having the greatest impact,” says Stet Sanborn, vice president, director of climate impact, SmithGroup. The firm is ranked No. 18.

Patty Lloyd, sustainability director at Leopardo Construction, calls the Federal Buy Clean Initiative a “game changer” in advancing low carbon cement, steel, asphalt and flat glass.

“When the federal government takes up a program, often you will see states and municipalities follow after a few years,” says Lloyd. “So, it is encouraging to see this federal recognition and action around lowering the embodied carbon of key construction materials.”

Along with federal incentive programs, local laws are also creating incentives that drive adoption and implementation, adds Lloyd. “This gives developers and owners a great opportunity to look past the first cost, and see an ROI that wasn’t there before, while empowering them to significantly reduce their emissions over time,” she says.

Decarbonation incentives baked into the Inflation Reduction Act and the Bipartisan Infrastructure Law, and guidelines from the General Services Administration are a combination of “carrot and stick” policies, says Scott Brideau, a Regen CoLab director at Little Diversified Architectural Consulting.

“At the local level, some jurisdictions give owners increased density for more sustainable buildings. Others require owners to meet escalating thresholds of energy efficiency for both existing and new buildings,” says Brideau. “Cities like New York, Boston, Washington, D.C., Minneapolis, Philadelphia and Portland have policies and programs that continue to aim higher every year.”

“Building performance standards are the biggest deal in public policy for supporting greener buildings and are currently having the greatest impact.”
Stet Sanborn, VP Climate Impact, SmithGroup

Among several carbon reduction provisions, the Inflation Reduction law includes a $6.4-billion program that provides states with funding to develop carbon reduction strategies and reduce transportation CO₂ emissions. The Dept. of Energy’s decarbonization plan aims to reduce greenhouse gas emissions from buildings 90% by 2050.

Codes and standards set by trade professional associations are also having an impact, says Jeff Kuhnhenn, director of architectural design at Gresham Smith. The design firm is ranked No. 88.

“ASHRAE has significantly influenced energy efficiency by adopting a robust approach to improving standards, which typically form the baseline for code adoption,” says Kuhnhenn. “Numerous building products are now adopting strategies to guarantee healthier content and more equitable production practices. The push to normalize heavy or mass timber construction within building codes is having a relatively broad impact.”

Yet Brideau says the most pressing challenge for the AEC industry is to “come to a national (and global) consensus about what and how to measure the efficiencies and reductions that will most benefit our communities and the planet.”

He adds, “It seems like every year or two we chase a new buzzword or process when we have not fully implemented the last one.” The next challenge “is staying the course,” he says.

Following the LEED

To keep on track with climate goals, firms and third-party-certification managers must continue raising the bar, says Vickie Breemes, a Regen CoLab director and national director of advanced building technologies at Little Diversified Architectural Consulting. She adds, “Today, certification platforms have exploded.”

The U.S. Green Building Council’s (USGBC) LEED certification program “changed the industry with its published performance compliance thresholds,” says Breemes. WELL, Fitwel, Living Building Challenge, PHIUS, Zero Carbon and Zero Energy “provide certification pathways for any project type and client priority.”

“USGBC just raised the bar again by launching LEED v5, which broadens the typical building performance metrics to include health, expansive carbon measurements, resiliency, and equity,” she says.

In order to increase rates of adoption, third-party certifications should be mindful not to include “items that don’t have a significant impact or truly create a difference in energy consumption,” says Emily Tilgner of McCownGordon Construction. The firm is ranked No. 97 on the contractor list.

Adding bike racks to projects in areas inaccessible by bike “becomes a chasing points exercise with no real benefit,” says Tilgner. “If green building standards want to be effective, they need to be simple, accessible, easy to understand and associated costs evaluated.”

She adds, “The biggest reasons clients don’t pursue these standards are the effort doesn’t justify the costs, the rules are complicated, the savings don’t equal what was forecasted, and they don’t see any ROI.”

As AEC professionals work together to decarbonize the building sector, “We can’t let green building standards get in the way of taking whatever steps are necessary.” says Jim Hanford, principal at the ranked No. 41 design firm, Miller Hull Partnership. He adds, “Don’t let perfect get in the way of doing something [good].”