Problem Definition
Your client is a real estate developer who wants to answer a Request for Proposal (RFP) for the development of a new residential district in a Middle Eastern country. This new district should be a landmark in terms of environmental impact.
They would like support from us to be competitive in this RFP. The priority is to demonstrate how they would minimize the greenhouse gas (GHG) emissions of their project while maintaining a competitive cost structure relative to other bidders.
How could you support your client in achieving this objective?
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If asked at this stage or later, please share that:
- We consider emissions during construction and during the use of the district by residents. We also have to consider emissions from suppliers. We can neglect emissions during the design phase of the project and at the end of the life of the buildings.
- There is no specified target for overall emissions. We will discuss specific targets while we work through the case.
- The client does not have its own capabilities in the Middle East. They would subcontract work to engineering, construction management, and construction companies.
- The client is purely focused on GHG emissions; they are not currently looking at other forms of environmental impact.
Question 1Structuring
What drivers can our client consider to reduce the GHG emissions of this project?
Hint · Structuring
Build 3–4 branches that are specific to this client and question, not a generic framework. Check they don't overlap and together cover the problem.
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Reducing emissions during construction, within cost constraints
- Construction materials (lower carbon footprint materials)
- Transportation of materials (local sourcing options, more sustainable logistics)
- Construction process (equipment, on-site energy generation)
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Reducing emissions during use, within cost constraints
- District energy consumption (underground links between buildings to reduce cooling requirements)
- Energy efficient building design (passive cooling, better orientation, smart meters, better insulation and HVAC systems)
- Renewable energy integration (on-site solar panels)
- Sustainable transport systems and infrastructure (EV charging stations, public transport)
- Carbon capture (nature-based solutions or technology-based solutions)
What the interviewer is looking forShow guidanceHide guidance
There are different ways of structuring this case. If the candidate is familiar with how companies report GHG emissions, they could use a framework considering Scope 1, 2, and 3 emissions:
- Scope 1: direct emissions from the company
- Scope 2: indirect emissions from the company related to energy consumption.
- Scope 3: other emissions: generally, emissions from the company's suppliers and clients.
For a generalist candidate, a logical structure following the lifecycle of the project would be appropriate.
Question 2Judgement & Insights
Our client has already analyzed potential emission reductions through energy-efficient design and construction processes. They now seek support in reducing emissions by sourcing more sustainable materials.
Hint · Judgement & Insights
Read the exhibit title, axes and units first. Lead with the ‘so what’, then back it with one or two numbers.
Which criteria would you need to consider in selecting the most promising materials to recommend to our client?
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Environmental impact
- Carbon emissions generated during material production, transportation, and installation
- Resource renewability
- Energy efficiency
- Local availability
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Economic viability
- Initial costs
- Lifecycle costs
- Scalability
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Practicality
- Performance and durability
- Compatibility
- Constructability
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Market and regulatory considerations
- Supplier network
- Compliance with safety and building standards
- Government incentives
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Social and aesthetic factors
- Aesthetic appeal
- User comfort
Question 3Numeracy
Our client has provided a table showing the project's proposed emission reductions with alternative materials (see Exhibit 1). While pleased with the emission reductions achieved, they are concerned that higher costs may affect competitiveness.
Hint · Numeracy
Write the formula before you plug in numbers, keep units and zeros explicit, and sanity-check the order of magnitude at the end.
Which low-carbon materials could be removed to keep costs under 110% of the baseline and what would the impact be on cost and emissions?
Exhibit 1Comparison of emissions and costs for baseline materials with low-carbon materials
Baseline materials
| Baseline material | Total Mass (Ton) | Emission Factor (kg CO2/ton) | Cost per Ton (USD/ton) |
|---|---|---|---|
| Concrete | 90,000 | 450 | 110 |
| Steel | 15,000 | 1,900 | 700 |
| Bricks | 10,000 | 275 | 150 |
| Mineral wool | 7,500 | 70 | 225 |
| Total Emissions (t CO2) | Total Cost (million USD) | ||
| 72,275 | 23.6 |
Low carbon materials
| Low-carbon material | Total Mass (Ton) | Emission Factor (kg CO2/ton) | Cost per Ton (USD/ton) |
|---|---|---|---|
| Low-Carbon Concrete | 90,000 | 150 | 120 |
| Recycled Steel | 15,000 | 1,200 | 750 |
| Low-Carbon Concrete Bricks | 10,000 | 200 | 175 |
| Hempcrete | 7,500 | 40 | 600 |
| Total Emissions (t CO2) | Total Cost (million USD) | ||
| 33,800 | 28.3 |
Source: Low-Carbon Housing case file
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Solution: Keeping mineral wool instead of using hempcrete would bring the cost of the project to $25.5 million, which is under 110% of the baseline cost. This would have an impact on emissions of <1%.
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Maximum cost for low-carbon alternative:
Max cost = 110% x Total cost (Baseline)
Max cost = 110% x $23.6 million
Max cost = $26 million
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The strongest contributors to emissions reduction are concrete and steel which represent a significant share of materials, with a cost premium <10%, so these two sustainable materials should be kept.
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However, hempcrete has a significant cost premium so I would estimate the impact on costs and emissions of keeping 'baseline' mineral wool.
a. Contribution to costs of using hempcrete vs mineral wool:
Cost delta = (Cost per ton (Hempcrete) - Cost per ton (Mineral wool)) x Total mass (Ton)
Cost delta = (600 - 225) x 7,500
Cost delta = $2.8 million
Keeping mineral wool vs hempcrete would bring the cost of the project to $25.5 million (28.3 - 2.8), hence within 110% of the baseline cost our client is willing to bet on for this RFP.
b. Contribution to emissions:
Emissions delta = (Emissions factor (Hempcrete) - Emissions factor (Mineral wool)) x Total mass (Ton)
Emissions delta = (40 - 70) kg CO2/ton x 7,500 tons
Emissions delta = -225t CO2
It represents less than 1% of emissions (225/72,275). The reduction in emissions will still be approximately 50%.
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As a consequence, replacing mineral wool with hempcrete does not contribute enough to total emissions reduction to justify the significant cost increase it represents for the project.
What the interviewer is looking forShow guidanceHide guidance
If a candidate begins going through the tables line by line to calculate the total cost and emissions of each material, prompt them to look for shortcuts. If they are struggling to do this, walk through the relative cost per ton of concrete and low-carbon concrete as an example.
Question 4Creativity
As part of the RFP, our client would like to include a series of initiatives to enable and encourage future inhabitants to reduce their emissions.
Hint · Creativity
Brainstorm in buckets (e.g. internal vs external, short vs long term) so ideas stay structured and you can see gaps.
What ideas can you suggest?
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Sustainable mobility infrastructure
- Partner with local authorities to design fast, reliable, convenient and cheap public transport systems.
- Build slow mobility infrastructure walkable streets, shaded pathways, and cycling lanes.
- Install a strong network of EV charging stations and incentives for EV ownership (free parking, etc.)
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Energy consumption reduction
- Partner with energy players to allow residents to subscribe to renewable energy providers.
- Install smart systems to track energy use.
- Create urban gardens to promote local food production to reduce food transport emissions.
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Awareness and education
- Develop a gamified mobile app for residents to encourage reduction of their household energy use.
- Organize social campaigns to teach residents about sustainable lifestyles.
- Involve residents in collective goals through sustainability challenges.
- Provide residents with easy access to carbon offset programs.
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Circular Economy
- Design shared resources repositories for tools, appliances with limited daily use.
- Provide residents with infrastructure for sorting waste at home.
- Create community composting hubs for organic waste.
- Introduce recycling reward programs for residents who meet recycling targets.
Question 5Synthesis
What is your final recommendation to your client?
Hint · Synthesis
Answer first: the recommendation, two or three reasons with numbers, then risks and next steps.
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We have been asked to help create an answer to the RFP that will demonstrate how the project will minimize GHG emissions while maintaining a competitive cost structure.
Our client has already optimized the building's design and construction process. We believe that they improve their response by reviewing their material selection strategy and by enabling future inhabitants to reduce their emissions.
Retaining mineral wool while replacing concrete, steel, and bricks with low-carbon alternatives would reduce GHG emissions of materials by 50%, whilst keeping costs within 110% of the cost of conventional materials.
Our client should also propose a range of initiatives to enable and encourage future inhabitants to reduce their emissions, including by providing a robust sustainable mobility infrastructure, sustainable energy solutions, as well as energy frugality programs.
Moving forward our client should assess the most promising initiatives in terms of their impact on emissions.
Contributed by CaseDrill practice community