The SBTi’s new guidelines for the construction and property sector: what does this mean for your business?
In the last week of August, the Science Based Targets Initiative (SBTi) reached a significant milestone in making the construction and property sector more sustainable. The final version of their sector-specific guidelines is now available, providing companies with a clear framework for decarbonisation. These guidelines offer the most comprehensive guide to reducing emissions within the property sector and provide direction for companies that are serious about achieving their climate targets.
Who are these guidelines intended for?
The new SBTi guidelines apply to various stakeholders within the property sector, such as:
- Property developers
- Owner-occupiers
- Owner-lessors
- Property managers
- Banks and financial institutions
Companies in these categories where more than 20% of their total Scope 1, 2 and 3 emissions (direct and indirect emissions) are related to the operational emissions of their buildings are covered by these guidelines. Even small and medium-sized enterprises (SMEs) that meet these criteria have the option of either following the general SME targets or adopting these sector-specific targets.
What are the key changes?
The guidelines address four key areas that affect both the construction and operational phases of buildings:
- Phasing out fossil fuel-based installations: SBTi states that companies must stop installing fossil fuel-based technologies, such as gas boilers and heating systems, by 2030 at the latest.
- Reducing operational emissions during use: By collaborating with the Carbon Risk Real Estate Monitor (CRREM), SBTi has developed regional reduction pathways. These pathways take into account local differences in electricity grids and building usage.
- Reducing embodied carbon: Global floor space is expected to grow by 15% by 2030. Companies must therefore set targets to reduce the embodied carbon of materials, production, transport and construction.
- Renovating inefficient buildings: As 80% of current buildings will still be in use by 2050, renovation rates must double by 2030 to remain in line with the International Energy Agency’s (IEA) Net Zero by 2050 Scenario. Companies are encouraged to focus on specific energy efficiency improvements.
Why is this relevant?
These guidelines will play a vital role in the decarbonisation plans of construction and property companies. Not only do they provide concrete targets, but also the tools to enable companies to significantly reduce their CO2 emissions. This means that property companies leading the way in this area can gain a competitive advantage, as sustainability plays an increasingly prominent role in investment decisions.
Companies within the sector should certainly include these guidelines in their discussions about future sustainability strategies. It offers them an opportunity not only to comply with regulations but also to actively compare and improve their strategies.
