Peeling plaster, broken windows, sunken sidewalks—how often do we pause in front of such buildings and think: when will they finally tear this down? Yet the situation is far more complex. The majority of worn-out, outdated, and abandoned properties could not only be salvaged through deep renovation, but could also serve vital environmental goals.

We spend 90 percent of our time indoors—67 percent of that within the four walls of our own home. It’s no coincidence how much responsibility this places on the construction industry and building operations, not just in providing comfort but also in achieving the 2050 climate neutrality targets. Around 80 percent of the buildings currently standing in the European Union will still be in use decades from now, while 75 percent of them are already in poor condition from an energy efficiency perspective.

What Do We Need for Net Zero?

Greenhouse gas emissions must be reduced as close to zero as possible, and the remaining minimal amount should be removed from the atmosphere or offset through methods such as carbon capture technologies or afforestation. This approach is key in the fight against climate change and in limiting global warming. Achieving this goal often involves increasing energy efficiency, widely applying renewable energy sources, and transitioning to a circular economy.

“The tens of millions of buildings currently standing across the continent will still be in use in 2050—the target year for climate neutrality. However, they face major energy, structural, and functional challenges—making renovation, modernization, or even functional transformation inevitable. The question is: how do we handle them sustainably? Today, most investors instinctively think of demolition when facing an outdated building. Tear it down and build a new one? But we must recognize that the carbon footprint of demolition and reconstruction is massive—and in many cases, there’s no need to remove a solid reinforced concrete structure if we’re going to build something new in its place anyway. At CÉH Inc., as one of the key players in the Hungarian design market, we believe that reinterpreting, transforming, and making buildings sustainable is often not just a better, but a more necessary choice. Demolition would re-release the embedded carbon into the atmosphere, and construction waste also poses a significant environmental burden,” summarized Ákos Takács, Vice President and Director of Sustainability.

Meeting this goal requires a multi-step, system-level approach. Reducing emissions is the first and most crucial step. In buildings, this includes minimizing energy demand through insulation, replacing windows and doors, and addressing thermal bridges. Energy-efficient systems like heat pumps, condensing boilers, and heat recovery ventilation—as well as integrating renewable energy sources—are also essential.

“Of course, at first glance renovation often appears more expensive. But the tightening EU regulations, carbon quotas, and ESG expectations are steadily closing the cost gap between renovation and new construction. And that’s just one aspect. What we offer is a holistic approach: from concept development to technical supervision during execution, every step happens in-house—with a green mindset, engineering precision, and full consideration of business objectives. It’s vital that all disciplines—architecture, mechanical, electrical, structural—are available in a coordinated system, ensuring faster and fully compatible solutions. When you have to gather these experts from different places, it often leads to misunderstandings, delays, or suboptimal decisions. This is not just a technical issue, but a system of economic, legal, comfort, and societal considerations,” said Szabolcs Riesz, Deputy Head of the Project Management Office at CÉH Inc., in an interview with G7.

Why Is Demolition Not the Answer?

Globally, the building sector accounts for around 36–40 percent of energy use and nearly one-third of carbon dioxide emissions. It’s no surprise that deep renovation projects play a crucial role if we are serious about the net-zero mission. According to the principles of the circular economy, it makes sense to retain anything usable or valuable and only replace what is truly outdated or environmentally harmful—this can significantly reduce the burden on living spaces.

“Client demands for buildings are also evolving. More and more examples show office buildings being transformed into residential spaces—whether due to work habits changed by COVID, or for sustainability and economic reasons. Functional change is no longer the exception, but a new reality,” added Szabolcs Riesz.

What Can the Construction Industry Do?

If a building’s condition allows it—or if demolishing it would cause more harm than value—it is worth preserving and preparing it for the needs of the coming decades using modern, environmentally friendly systems and materials. While modernization is the top priority, it’s not just about improving comfort and energy efficiency; residential buildings also need to move closer to the net-zero goal.

A well-designed renovation process should incorporate systems that reduce the building’s carbon emissions to nearly zero. Energy management approaches—such as storing cheap daytime green electricity—can be cost-effective and efficient even without on-site generation. Although EU sustainability directives already encourage the renovation of existing buildings, the associated financial resources are not always sufficiently available. Time, however, is pressing: it may be wiser to opt for practical, near-net-zero technologies that can be implemented sooner and more affordably—even decades ahead of “perfect” solutions.

“The first step is a quick, cost-effective building audit to determine whether it's worth proceeding. If yes, then comes the detailed assessment: lifecycle analysis, intervention mapping, value-added calculations, and—if needed—ESG analysis. The latter is particularly important for companies, as frameworks are becoming increasingly strict. We always recommend a phased renovation plan that remains financially manageable and aligns with environmental expectations that aim for continuous improvement rather than instant perfection. According to EU directives, by 2050 not only residential and office buildings will be in focus, but all property types: schools, hospitals, theaters, sports halls, and museums. What to do and how depends largely on the building’s era—and this must be taken into account during assessments,” said Ákos Takács.

What Does ESG Mean in Construction?

ESG stands for Environmental, Social, and Governance. In the construction industry, this means ensuring that a project is not only technically and economically sound, but also sustainable in terms of environmental impact, social equity, and ethical governance. This includes energy efficiency, environmental footprint of building materials, working conditions, equal opportunities, and responsible project management. ESG principles are gaining prominence in regulation, investment, and tenant expectations—making them not just green considerations but a business imperative.

What Do the Numbers Say?

Measurability and traceability are crucial: the net-zero goal is only credible and achievable if supported by precise monitoring systems. Annual carbon footprint calculations, energy audits, and ESG reports all contribute to transparency and accountability.

“In the near future, tightening regulations—similar to the automotive sector’s penalty mechanisms—will usher in a new era for real estate. Owners will be motivated by specific obligations to renovate, and EU support may assist these efforts. Regulation and financing are still evolving, but those who act early may gain a competitive edge. While legal frameworks can drive change, market demand is equally influential. ESG-conscious tenants now expect sustainability performance—forcing property owners to adapt. Rising energy costs also push the market toward smarter, more efficient buildings. Most renovations must be carried out while buildings remain in use—synchronized with the lifecycle of various building systems,” said Gábor Molnár, Senior Project Manager.

Beyond the Walls

Compensation—or carbon offsetting—matters in cases where emissions cannot be technically or economically eliminated. This includes carbon capture and storage, enhancing natural absorption through urban tree-planting programs, or purchasing carbon credits. It’s crucial to remember that these do not replace emission reduction—they merely complement it.

This is not just green PR or CSR window-dressing, but a commitment aligned with the Paris Climate Agreement, which aims to limit global warming to below 1.5°C. Exceeding that threshold could trigger devastating ecological and economic consequences: extreme weather, desertification of arable land, collapse of marine ecosystems, and disruption of food chains. Net zero is one of the most vital tools for climate mitigation.

In new buildings, lifecycle assessments (LCA) and Global Warming Potential (GWP) calculations are becoming increasingly common to guide the use of truly sustainable technologies. Conscious sustainability is built from many small choices—not only in energy consumption. Reusing rainwater and greywater can significantly reduce urban water demand. In cities, it's also essential to conduct renovation and demolition sustainably at the local level—for example, replacing disused buildings with green spaces to reduce the proportion of paved areas. Given that climate change is making lawns increasingly unsustainable, introducing more trees and shrubs is a better approach.

Currently, the forward-looking renovation of buildings is not yet a widespread mindset, so raising awareness among the general public and developers remains a key task. Fortunately, the banking sector has already recognized the challenge and is adapting its financing systems: prioritizing sustainable projects is on track to become the new standard.

“Many believe that most of the environmental impact occurs during operation, but in fact, the carbon footprint of materials used during construction can be much higher. That’s why every decision counts—even seemingly minor ones like where we source the flooring. If it comes from a Hungarian or Polish manufacturer instead of South Africa, we save a huge amount of CO₂ just on transport. For example, a life cycle management (LCM) analysis of our own headquarters showed that the carpets had the highest embedded carbon,” emphasized Ákos Takács.

During renovations, it’s worth prioritizing low-emission or recycled materials and assessing their full lifecycle impact. Post-renovation monitoring and optimization are also essential—it’s not enough to build something “well,” we must also understand how it performs. The rise of climate-neutral construction solutions and achieving net-zero targets is our shared responsibility, because the houses of tomorrow are already being built today—and it is our duty to ensure they are built on the right foundations.

The article was published on G7.hu on July 24, 2025, with the active contribution of our expert colleagues.