Construction’s Path to Net Zero: ING’s Role in Emission Cuts

According to the United Nations Environment Programme (UNEP), the construction sector is responsible for 37% of global emissions.

If construction companies want to be climate conscious and reach carbon neutral by 2050, they need comprehensive plans.

One company doing this is ING, enhancing its targets to be more sustainable and reach net zero.

Carbon emissions in construction 

ING is planning to reduce GHG by 55% by 2030 as well as be carbon neutral by 2050, complying with the Paris Agreement.

Construction companies have relatively low direct emissions of greenhouse gases. 

Of total EU emissions, only 1.7% is directly attributable to construction — mainly coming from construction vehicles as well as passenger cars and trucks under their own management. 

If construction companies want to be climate neutral by 2050, they need to look beyond just reducing emissions from their own operations. 

“The urgency of climate change is becoming more evident all the time and ING wants to play a leading role in accelerating the global transition to a low-carbon economy,” says Steven van Rijswijk, CEO of ING.

“We all have a part to play and we can all make the difference for present and future generations if we work together towards the same goals. I am proud to see our climate approach keep on developing every year.”

The vast majority — more than 90% of total EU emissions — of greenhouse gas emissions from construction activities take place in the value chain, at suppliers and clients.

Construction company goals

To achieve emission reductions, builders must first start by mapping their own greenhouse gas emissions and set reduction targets.

Large companies, which the UK defines as a company with more than 250 employees, are obliged to do so by legislation. 

ING analysed 25 large European construction companies and found that 70% of the companies have published concrete climate targets for Scope 1 and 2 emissions.

Almost 50% of contractors have a reduction target for Scope 3 emissions.

Out of the 25 companies analysed, almost 90% have published a reduction path, not necessarily leading to net zero, for Scope 1 and 2, in which they indicate how much they want to reduce their greenhouse gas emissions. 

For Scope 3, the number almost halves with only 48% doing so. 

The Scope 3 data is often harder to collect, companies have to collect information from the entire value chain and work with suppliers and customers to achieve these objectives — explaining the lower percentage.

IGN also states that reduction targets set by the companies are difficult to compare because the reference years vary from 2009 to 2023. 

“In the past year, we’ve taken several important steps to sharpen the way we engage with clients on their transition towards net-zero,” Steven says. 

“We assessed the sustainability disclosures of around 2,000 of our largest clients with an online tool we’ve developed.

“This gives us the foundation for more data-informed discussions with our clients about their progress and how we can support them in their transition and drive down their emissions.”

Out of the 10 largest construction companies IGN surveyed, BAM and Skanska have the most ambitious reduction targets. 

BAM is hoping to reduce Scope 1 and 2 emissions by 90% by 2030 and Scope 3 emissions by 50% – aiming to reach net zero by 2045.

As well as this, Skansa is aiming for a 70% reduction in Scope 1 and 2 emissions and 50% for Scope 3 emissions, hoping to achieve net zero by 2050 globally.

Circular construction 

When Scope 1 emissions decrease due to electrification, Scope 2 emissions often rise due to increased power consumption. 

To mitigate this, IGN suggest companies can take the following measures:

Reducing Scope 2 emissions

• Self-generation of renewable energy: Installing solar panels or other on-site renewable energy sources can reduce reliance on fossil fuels and lower CO₂ emissions
• Renewable energy procurement: Switching to an electricity provider that supplies 100% renewable energy helps cut emissions. Swedish construction firm Skanska already sources 93% of its electricity from renewables
• Energy efficiency: Implementing smart meters and energy management systems optimises energy use and reduces emissions.

Regulations, pricing and incentives

• Corporate initiatives: Companies can set reduction targets, but higher costs may impact competitiveness
• Customer demand: Many government tenders now include sustainability requirements, driving change. However, not all clients prioritise sustainability
• Government regulations: Stricter environmental laws create a level playing field, ensuring all companies reduce emissions
• Carbon pricing: CO₂ taxes or emissions trading schemes, such as ETS, create financial incentives to cut emissions and drive innovation
• Subsidies: Government support accelerates the transition by funding green technologies. However, subsidies can be costly and may not encourage broader efficiency improvements.

Most emissions in construction occur upstream in materials supply and downstream in building use, making Scope 3 the hardest to tackle due to the need for collaboration.

IGN states that the following can help to tackle Scope 3 emissions in construction:

Upstream: Supply chain emissions

• Sustainable materials: Using less energy-intensive materials like timber instead of concrete or steel significantly lowers CO₂ emissions
• Circular construction: Reducing waste by renovating instead of demolishing, recycling materials and separating waste streams minimises environmental impact
• Supplier collaboration: Engaging suppliers in carbon reduction targets and adopting low-carbon alternatives for key materials, like concrete, steel and plastic, can drive industry-wide change.

Downstream: Operational emissions

Buildings must achieve net-zero emissions during their use phase. Strategies include:

• Energy-neutral buildings: Implementing insulation, heat pumps and on-site renewable energy generation ensures minimal energy consumption
• Strategic development: Companies can reconsider what they build, prioritising low-energy structures over high-consumption facilities like wellness centres and data centres.

The construction industry must take a holistic approach, integrating sustainable materials, efficient design and regulatory compliance to achieve meaningful emission reductions.

“Our aim is to be the catalyst to enable the industry to decarbonise,” says Stephen Fewster, Global Head of Shipping Finance at ING. 

“The foundations are very much there for the industry to successfully manage an energy transition.

“The biggest question is the pace at which the fuel mix of the future will take shape and scale up. I’m confident we’ll arrive at that answer soon enough.”

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