Meeting Science-Based Targets in the Real Estate Sector

As the pressure to mitigate climate change grows, the real estate sector must step up and align its activities with global climate objectives. The Science-Based Targets Initiative (SBTi) provides clear, actionable guidance for reducing greenhouse gas (GHG) emissions, tailored specifically to the real estate industry. The challenge for property developers, managers, and investors is to understand these guidelines and implement them effectively. This is where CarbonTool can come in handy.

SBTi and the Real Estate Sector

With buildings accounting for a significant portion of global emissions, the SBTi has outlined targeted criteria to help companies reduce operational and embodied carbon. These include:

• Stop Fossil Fuel Installations: Companies need to publicly commit to stop installing new fossil fuel-based systems (for heating, cooking, power, and hot water) in their buildings by 2030.
• Reduce In-Use Operational Emissions: Reducing emissions from energy use in buildings is very important.

As Răzvan Nica, CEO of CarbonTool, explains, “Real estate investors and developers are integrating sustainability across the entire property lifecycle, from initial planning and permitting to construction, leasing, management, and exit strategies.” This approach ensures that sustainability is at the heart of real estate development, with a focus on reducing both operational and embodied carbon.

• Cut Embodied Emissions: As new buildings are constructed, emissions are produced from materials and construction activities. With global building space expected to grow by 15 percent by 2030, companies must set targets to reduce these “embodied emissions.”
• Retrofit Inefficient Buildings: Since most buildings today will still be around in 2050, it’s important to make them more energy-efficient. The rate of these upgrades (or “retrofits”) needs to more than double by 2030 to meet global climate goals. The SBTi encourages companies to commit to these energy-saving improvements.

How to Simplify the Path to SBTi Compliance

Meeting science-based targets may seem complex, but the right tools can greatly simplify the process. Real estate businesses must track both operational and embodied carbon across their portfolios to gain a clear understanding of their current emissions profile and identify areas where improvements can be made.

In this context Răzvan Nica highlights, “Tools like Carbon Tool help measure, manage, report, and reduce the carbon footprint of buildings. By enabling real estate investors and developers to decarbonize their portfolios, Carbon Tool supports the achievement of sustainability targets and accelerates the path to ESG compliance.”

With tools like Carbon Tool, businesses can easily align their targets with SBTi methodologies, simplifying the process of setting realistic, science-based goals. Transparency is a key aspect of the SBTi framework, and tools that streamline emissions reporting make it easier for businesses to track progress and meet their climate goals.

By integrating these tools into their operations, real estate companies can confidently pursue ambitious sustainability objectives, ensuring both compliance with global climate goals and long-term value for their properties.

New SBTi Targets in Real Estate

In August 2024, the Science Based Targets Initiative (SBTi) unveiled a new series of ambitious emissions reduction targets for the construction and real estate industries. These goals are set to transform the design, construction, and management of buildings, highlighting the importance of cooperation between landlords and tenants

Landlord and Tenant Collaboration

The new SBTi targets mandate that landlords include tenant energy consumption in their carbon footprint reporting. Landlords and tenants now share accountability for reducing emissions, pushing them towards cooperation.

These agreements may act as a structural foundation for achieving emissions reductions, facilitating a cooperative framework between both parties. Such collaboration is expected to drive investments in energy-efficient technologies and operational practices, transforming traditional business models in the sector.

New SBTi Targets: Personalized and Precise

The SBTi guidelines also incorporate Carbon Risk Real Estate Monitor (CRREM) targets, with a scientific adaptation at the asset level. This asset-specific approach allows for more targeted and precise emissions reductions, providing developers and property managers with clear, actionable data on how individual buildings must adapt.

One of the most significant aspects of the new targets is the focus on embodied carbon, which refers to emissions produced by the materials and construction activities themselves.

For the first time, embodied carbon has clear benchmarks. Reducing embodied carbon by 40 percent by 2030 is an ambitious goal but achievable if developers and materials producers embrace sustainable practices. This new focus will challenge traditional construction methods, driving the industry toward greener, more sustainable materials and techniques.

Supply Chain Pressure

Meeting these new targets will impact the whole supply chain, highlighting sustainable procurement and teamwork. Everyone involved, from material producers to developers, must give accurate, current emissions data to comply with these strict goals.

This is where CarbonTool brings value. Developed by BuildGreen, a sustainable real estate consultancy leader, CarbonTool provides a comprehensive solution to measure, manage, and report emissions. From developers to suppliers, and even to certification bodies like BREEAM and LEED, CarbonTool ensures that all parties involved in a project can easily share and access real-time emissions data.

Although sustainability managers and consultants remain key for compliance, CarbonTool eases data management, streamlining emissions tracking over time. This transparency is crucial in the SBTi framework, allowing landlords, tenants, suppliers, and auditors to monitor progress and work together toward decarbonization.

A key feature of CarbonTool is its capacity to provide transparency throughout real estate management and development. Its real-time data sharing lets landlords, tenants, suppliers, and third parties track emissions accurately together. This transparency is crucial under the new SBTi framework, relying on collective efforts to reduce emissions.

Razvan Nica, Managing Partner at BuildGreen and CEO of CarbonTool said: “The new SBTi targets require both landlords and tenants to be accountable for emissions, doubling the pressure already placed by corporate climate objectives. With fossil fuel installations banned by 2030 and embodied carbon benchmarks set, the entire supply chain must adapt now to meet these requirements.”

The construction and real estate sectors are being transformed by the new SBTi targets. Now, landlords and tenants must collaborate, and embodied carbon is gaining much-needed attention. Managing these changes requires the right tools.

CarbonTool supports this shift with a transparent, data-driven platform that simplifies emissions management, reporting, and collaboration. Using CarbonTool, real estate companies can meet the new SBTi targets, reduce their carbon footprint, and ensure long-term sustainability.