August 2024

This week, the Science Based Targets initiative (SBTi) launched its decarbonisation framework for a net-zero building sector.

The criteria takes a “whole building approach” and calls for an end to fossil fuel installations, a reduction in in-use operational emissions and upfront embodied emissions, and the retrofitting of inefficient buildings.

Indeed, the built environment is resource-, energy- and emissions-intensive, already responsible for over a quarter of energy-related emissions, 40 per cent of materials use and 39 per cent of global emissions.

But looking ahead, global floor area is set to grow further, by around 15 per cent by 2030, with nearly 80 per cent of that growth in developing countries.

Against this backdrop, the SBTi says decarbonisation efforts must now ramp up.

Emissions Must Fall Dramatically

Indeed, according to the International Energy Agency (IEA), emissions must fall by 9 per cent on average each year until 2030, more than halving by the end of the decade to get the world on track with the NZE scenario.

“Decarbonizing both old and new buildings is paramount to tackling climate change. We call on these businesses to lead the net-zero transformation,” said Alberto Carrillo Pineda, Chief Technical Officer of the SBTi, in a statement this week.

The framework—which was developed in consultation with an independent Expert Advisory Group (EAG) of companies, financial institutions, and non-profit and multilateral organisations—outlines that companies must set a target to reduce their upfront embodied emissions derived from raw materials, manufacturing, transportation of materials and the like.

Meanwhile, for in-use operational emissions—those related to building energy consumption—it collaborated with the Carbon Risk Real Estate Monitor (CRREM) to develop region-specific pathways that reflect local variations in power grids and building usage, included in the Buildings Target-Setting Tool.

Companies Must Halt New Fossil Fuel-Based Installation

The SBTi also outlines that, from 2030 at the latest, companies should make a public commitment to halting the installation of new fossil fuel-based installations, from heating and cooking, to power generation and hot water equipment.

Moreover, with 80 per cent of current building stock set to remain standing until 2050, the framework underlines the importance of retrofitting inefficient buildings, with companies committing to implementing energy efficiency improvements.

Estimates put the average energy retrofit rates in buildings at less than 1 per cent in most major markets.

Here, the SBTi spotlights the IEA’s Net Zero by 2050 Scenario, which shows that retrofitting needs to more than double by 2030.

Actioning the Framework

Peter Heymann Andersen, COO at Ramboll said the the guidance “demystifies” ‘Paris-aligned’ for the sector.

SBTi worked in collaboration with the global engineering, architecture and consultancy company to develop the 1.5°C global embodied emissions decarbonisation pathways.

“[It] also fortifies our discourse with partners and clients, steering us toward a sustainable future in unison,” added Andersen.

Patrick Ho, Head of Sustainable Development at Swire Properties, echoed this, arguing that the “whole building approach” employed within the framework “enhances accountability” for emissions reduction and encourages collaboration between landlords and tenants in decarbonisation efforts.

However, while progress is being made within the building sector, experts warn that this progress is not happening fast enough.

Indeed, as outlined by UNEP’s recent global status report on buildings and construction, while energy intensity must drop 37 per cent from 2015 levels by 2030, in 2022, it remained 15 per cent above the target trajectory.

Finance isn’t accelerating at the speed required, either. The UNEP report outlined that recent investment in decarbonising buildings has fallen short of the net-zero targets for 2030 and 2050 and likely declined in 2023.

More broadly, CO2 emissions from building operations and construction reached new highs in 2022.

In a statement on the report earlier this year, Inger Andersen, UNEP Executive Director, noted that half of the buildings that will exist by 2050 have not yet been built, calling this a “major opportunity” for the sector to “reimagine the buildings of the future.” These buildings, Andersen said, must prioritise resilience, renovation and reuse, renewable energy generation and low-carbon construction, “all while addressing social inequalities.”

“There is no credible path to address climate change without a fundamental shift in the building and construction sector,” UNEP’s Andersen noted.

Commenting on the launch of the framework this week, the SBTi’s Chief Technical Officer said: “This sector now has the tools to build towards net-zero – companies and financial institutions must take immediate action.”

The organisation noted it will be hosting two global webinars in October, during which SBTi’s experts will explain the criteria further and answer questions from stakeholders.

By Madaline Dunn, Editor, ESG Mena.