To combat global warming, it is crucial to eliminate CO2 emissions by 2050, especially since a third of global emissions are attributed to the building and construction industry. This sector's carbon footprint comprises operational emissions from daily activities and embodied carbon throughout a building's lifecycle. However, as buildings become more energy-efficient, embodied carbon increasingly dominates total emissions. In the Netherlands, few residential projects align with the Dutch Climate Agreement's. This is due to various challenges hindering large-scale carbon reduction efforts, with financial barriers being a prominent issue. However, limited research focuses on financial barriers from the perspective of investors, often lacking in-depth analysis and offering few practical solutions for these challenges. Recognizing the need for carbon reduction, the industry must adopt a new approach to investment decisions, prioritizing embodied carbon considerations. This study delves into these financial barriers and how strategies to reduce embodied carbon impact real estate investment decision-making, focusing on the traditional Discounted Cash Flow (DCF) model. Therefore the main research question is: “In what way does reducing embodied carbon in residential building projects impact the investment decision-making process from an investor's perspective?” To explore this, the study first conducts a literature review and exploratory interviews, followed by three case studies with semi-structured interviews. The findings reveals that the integration of embodied carbon in the investment decision-making process is still in its early stages. Although there is growing awareness and interest, embodied carbon is not yet a standard consideration in investment decisions. This integration depends on the flexibility of investors and the specific sustainability goals of projects. Traditional financial models and evaluation methods have largely remained unchanged. The study concludes that there is a need for further standardization and integration of carbon reduction in all aspects of investment practices to encourage the construction sector to achieve the goal of carbon net-zero by 2050.