As the global race to decarbonise intensifies, the building and construction industry faces increasing pressure to adopt sustainability strategies that align with climate science. The Science Based Targets initiative (SBTi) has taken a bold step in guiding companies within the sector towards climate-resilient operations with the launch of its new sustainability targets. These targets are designed to bring construction activities in line with the Paris Agreement, aiming to limit global warming to 1.5°C above pre-industrial levels.

The new SBTi framework encourages companies in the building sector to set and meet science-based targets. These targets include clear, actionable goals that focus on reducing carbon emissions across the entire building lifecycle—from design and material selection to construction processes and building operations.

A major focus of these targets is addressing Scope 3 emissions, which encompass indirect emissions that occur throughout the supply chain. This is a critical factor for the building sector, where embodied carbon—emissions associated with materials and construction—is a significant contributor to a project’s overall carbon footprint.

SBTi also emphasises the importance of adopting renewable energy, improving energy efficiency in buildings, and integrating circular economy principles (such as using recycled materials). Companies are encouraged to track and report their progress transparently, thereby holding themselves accountable and ensuring continuous improvement.

1. Carbon Reduction Goals: One of the core SBTi targets is for companies to achieve net-zero carbon emissions by a specified date (typically 2050, though many are pushing for earlier deadlines). This involves a radical shift in how buildings are designed, constructed, and operated.
2. Energy Efficiency: SBTi targets promote a reduction in energy intensity per square meter in new and existing buildings, aiming for energy-efficient designs that reduce long-term environmental impacts.
3. Sustainable Materials: Another target includes the use of low-carbon or carbon-neutral materials. SBTi encourages the use of alternatives such as timber or recycled steel, which can reduce the carbon impact of a building during its construction phase.
4. Supply Chain Collaboration: The construction industry is fragmented, and the SBTi encourages businesses to collaborate across the value chain to reduce Scope 3 emissions. Working with suppliers to ensure they adhere to sustainable practices will be key to meeting these goals.

While the SBTi framework sets out voluntary targets based on scientific best practices, companies must also navigate mandatory government regulations that are increasingly being rolled out in response to the climate crisis. It’s important to understand how these two systems—voluntary targets and mandatory regulations—work together.

• Industry Best Practices (SBTi Targets): These are voluntary commitments made by companies to align their business operations with the latest climate science. By setting SBTi-aligned targets, companies are positioning themselves as industry leaders in sustainability. Best practices might include adopting green building certifications such as LEED or BREEAM, incorporating energy-efficient technologies, and proactively reducing emissions far ahead of regulatory deadlines.

Voluntary targets allow companies to push the boundaries of sustainability and prepare for future regulatory requirements. Achieving these targets not only helps the environment but can enhance a company’s reputation, making it more attractive to investors and customers who prioritise sustainability.

• Government Mandatory Regulations: In contrast, government regulations are non-negotiable and must be followed to avoid penalties. For instance, regulations such as the European Union’s Energy Performance of Buildings Directive (EPBD) or the U.S. Green Building Standards (part of the Energy Independence and Security Act) impose mandatory energy performance requirements for new buildings. These regulations may include minimum insulation levels, building energy codes, and emissions standards for materials.

Government regulations often set a baseline for sustainability. For example, carbon reduction regulations may require all new buildings to be net-zero by 2030, with hefty penalties for those who fail to comply. These rules are legally binding, and failing to meet them can result in fines or other legal repercussions. While SBTi targets are more ambitious, mandatory regulations ensure that all players in the industry meet a minimum standard.

While government regulations ensure a level playing field, the SBTi framework allows companies to go beyond mere compliance and become leaders in sustainable building practices. For organisations already working toward SBTi targets, upcoming government mandates can feel more like stepping stones than hurdles.

By aligning with both SBTi targets and mandatory regulations, companies can future-proof their operations and mitigate risks. The long-term benefits of this approach are immense—enhanced reputation, reduced operational costs due to energy efficiency, and a significant reduction in environmental impact.

The new SBTi building sustainability targets provide a roadmap for the construction industry to meet the global climate goals set forth in the Paris Agreement. By focusing on carbon reduction, energy efficiency, and sustainable materials, companies have the opportunity to lead the charge toward a more sustainable future. However, it’s crucial to distinguish between these voluntary best practices and the legally binding government regulations that will shape the industry over the coming decades.

Ultimately, those companies that embrace both voluntary targets and mandatory regulations will not only secure a competitive edge but also play a vital role in building a more sustainable, low-carbon world.