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Sustainability and Climate Solutions

Science-based climate targets:

Challenges and Opportunities for Real Estate 

Science-based targets are the gold standard for decarbonisation strategies, increasingly also in real estate. However, the sector’s complex ownership structures and distinctive emission profile raise challenging questions, particularly: If we commit to a science-based target, can we realistically achieve it? Early action and a robust implementation strategy will be critical to success.

The real estate sector faces growing pressure to decarbonise at a pace that maintains asset competitiveness, protects value and contributes meaningfully to climate mitigation. Across industries, companies are committing to science-based climate targets, with participation in the Science-based Targets initiative (SBTi) growing rapidly. Yet for real estate owners and developers, translating corporate ambitions into building level actions is far from straightforward.

Science-based targets reflect climate necessity, but economic and technical challenges require innovative solutions. Embodied carbon from new developments materially impacts Scope 3 emissions, while operational reductions depend on tenant engagement, grid decarbonisation, and renovation cycles. Ownership structures and capital planning add further complexity.

New developments offer more clarity. The 2024 release of the SBTi Building Sector Guidance and the recent publication of the Corporate Net-Zero Standard v2.0 will reshape how real estate actors set, track, and achieve climate targets. The key lies not only in setting a target, but also in defining a credible pathway and implementing measurable, investment-ready actions.

What should real estate actors do now?

The immediate priority is to establish a clear direction, not to achieve perfection from day one.

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    Start with a robust organisational footprint (Scopes 1–3)

    Understanding the contribution of buildings to your total emissions profile is essential before defining ambition levels.

     

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    Establish a building-level baseline

    Assess both operational and embodied emissions at asset level. Representative carbon profiles per building type will help you to prioritise action. 

     

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    Use the SBTi Building Sector Guidance to define a clear strategic direction

    The SBTi now provides a reference for how fast different building types have to decarbonise. Even before formally committing to a target, it can help clarify what good performance should look like in 2030 and beyond.

     

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    Test feasibility early

    Identify and address the gaps at an early stage. With v2.0 of the Net Zero Standard, you gain more flexibility in what targets to set and how to achieve them. Nevertheless, early scenario analysis reduces the risk of committing to targets without a credible implementation plan.  

     

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    Prepare for evolving standards

    Ensure that your data systems, procurement criteria, and investment plans are aligned with forthcoming SBTi developments and updates to the Greenhouse Gas Protocol.

     

With the right data, guidance and strategic sequencing, science‑aligned decarbonization becomes both achievable and investable. The task ahead is significant, but clarity and momentum today unlock tomorrow's competitive advantage.

"Science-based climate targets are far more than a commitment for the real estate industry – they provide a strategic framework to secure long-term value and remain competitive."

Linus Grob Senior Sustainability Consultant

"Early action is the key to successful decarbonization. Organizations that establish a robust emissions baseline, assess feasibility from the outset, and align investments with science-based pathways will be best positioned to turn climate ambition into measurable business value." 

Pieter Flamand Real Estate Lead at South Pole

South Pole is a climate consultancy specialising in science-based target setting, GHG accounting and decarbonisation strategy for real estate investors and developers.