The design and assessment of net-zero buildings commonly focus exclusively on the operational phase, ignoring the embodied environmental impacts over the building life cycle. An analysis is presented on the consequences of integrating embodied impacts into the assessment of the environmental advantageousness of net-zero concepts. Fundamental issues needing consideration in the design process – based on the evaluation of primary energy use and related greenhouse gas emissions – are examined by comparing three net-zero building design and assessment cases: (1) no embodied impacts included, net balance limited to the operation stage only; (2) embodied impacts included but evaluated separately from the operation stage; and (3) embodied impacts included with the operation stage in a life cycle approach. A review of recent developments in research, standardization activities and design practice and the presentation of a case study of a residential building in Norway highlight the critical importance of performance indicator definitions and system boundaries. A practical checklist is presented to guide the process of incorporating embodied impacts across the building life cycle phases in net-zero design. Its implications are considered on overall environmental impact assessment of buildings. Research and development challenges, as well as recommendations for designers and other stakeholders, are identified.