SUSTAINABLE INVESTMENT, new horizons in the construction industry by Raiffeisen Capital Management

November 2023

SUSTAINABLE

INVESTMENT NEW HORIZONS IN THE CONSTRUCTION INDUSTRY

PAGE 04 PROPERTY CERTIFICATIONS

PAGE 10 DISCUSSION: SUSTAINABILITY ASPECTS IN PLANNING AND CONSTRUCTION

PAGE 12

A marketing communication of Raiffeisen Kapitalanlage GmbH

CONTENTS PUBLICATION INFORMATION

PREFACE

LEAD ARTICLE

www.rcm.at/nachhaltigkeit

NEW HORIZONS IN THE CONSTRUCTION INDUSTRY

10 10

SPECIAL PROPERTY CERTIFICATIONS

12 12

RESEARCH DISCUSSION: SUSTAINABILITY ASPECTS IN CONSTRUCTION AND PLANNING

BEST PRACTICE SUSTAINABLE REVITALISATION

CORPORATE VOICES ON THE TOPIC OF CONSTRUCTION MATERIALS

COMPANY SPOTLIGHT

28 28

Media proprietor: Zentrale Raiffeisen Werbung A-1030 Vienna, Am Stadtpark Published and created by: Raiffeisen Kapitalanlage GmbH Mooslackengasse 12, A-1190 Vienna Responsible for the content: Raiffeisen Kapitalanlage GmbH Mooslackengasse 12, A-1190 Vienna

INSIDE FOOTPRINT TEAM LAUNCHES CYCLECHALLENGE

CONTENTS

General orientation: Information on the topics of investment funds, securities, capital markets, and investment; additional information pursuant to the Austrian Media Act can be found in the publication information at www.rcm.at. Project coordination: Irene Fragner, Sabine Macha Authors: Christoph Drdla, Bernhard Grubhofer, Alfred Hajdu, Pia Oberhauser, Herbert Perus, Alexander Toth, Mathias Zwiefelhofer Photos: iStockphoto (p. 06, p. 15, p. 22, p. 27) Delta, Andreas Hafenscher, private, Roland Rudolph (p. 12, p. 14) Raiffeisen KAG (p. 03, p. 05, p. 09, p. 11, p. 12, p. 15, p. 19, p. 20, p. 25, p. 29) Graphic design: [WORX] Multimedia Consulting GmbH Editorial deadline: 23 October 2023 This is a marketing communication of Raiffeisen Kapitalanlage GmbH. Raiffeisen Capital Management ist the umbrella brand of the following companies: Raiffeisen Kapitalanlage GmbH Raiffeisen Immobilien Kapitalanlage GmbH Raiffeisen Salzburg Invest GmbH Disclaimer Investments in funds involve higher risks, up to and including loss of capital. This document was prepared and designed by Raiffeisen Kapitalanlage-Gesellschaft m. b. H., Vienna, Austria (“Raiffeisen Capital Management” or “Raiffeisen KAG”). Despite careful research, the statements contained herein are intended as non-binding information for our customers and are based on the knowledge of the staff responsible for preparing these materials as of the time of preparation and are subject to change by Raiffeisen KAG at any time without further notice. Raiffeisen KAG assumes no liability whatsoever in relation to this document, in particular with regard to its timeliness, accuracy, or completeness. Similarly, any forecasts or simulations of earlier performance presented in this document do not provide a reliable indication of future performance. This document is neither an offer nor a recommendation to buy or sell, nor an investment analysis. It is not intended for use in lieu of investment advice or other consultation. If you are interested in a specific product, we and your bank advisor will be happy to provide you with the complete prospectus or the information for investors pursuant to § 21 AIFMG prior to purchase. No specific investments should be made until after a consultation and discussion, and after having reviewed the prospectus and the information for investors pursuant to § 21 AIFMG. It is expressly noted that securities transactions can involve significant risks and that taxation of such depends on personal circumstances and is subject to change in the future. Reproduction of the information or data, in particular the use of texts, text sections, or graphic material from this document, requires the prior written consent of Raiffeisen Kapitalanlage GmbH.

PREFACE

Dieter Aigner Managing Director of Raiffeisen KAG, responsible for fund management and sustainability

Dear Readers,

According to a UN report, 38% of glob-

thermal insulation, or electrical and digi-

brick buildings create a good interior cli-

al carbon emissions stem from the con-

tal building infrastructure will profit from

mate and the deep window inset provides

struction and building industry. That is

this initiative. Along with reducing carbon

natural shading. In any case, everyone in-

a very high share and it means that ex-

emissions, this initiative should also help

volved in construction and building needs

traordinary efforts are needed to make

to create new jobs.

to be planning and implementing measures that improve sustainability.

the building stock climate-neutral by 2050. The political will to do so is there.

Outside of politics, we have a myriad of

In its Green Deal, for example, the Euro-

players in the construction and building

The financial industry is also part of this

pean Commission announced a significant

industry, such as clients, architects, prop-

great undertaking. It must support the in-

increase in investments to improve the

erty developers, construction companies,

dustry in this process of change, promote

energy efficiency of buildings, since cur-

scientists, and many other stakeholders.

the circular economy, and temporarily

rently around 35% of buildings are older

The decisions they make also have and

withhold capital from companies that have

than 50 years and 75% are considered to

will continue to have a great impact on

not yet recognised the need for a new par-

be energy-inefficient. With a renovation

whether we are able to significantly re-

adigm. It is also vital to maintain and initiate

initiative, the EU wants to invest an ad-

duce carbon emissions from the construc-

dialogue with companies, working cooper-

ditional EUR 275 billion annually in this

tion sector and the building stock. There’s

atively together to reduce the industry’s

area up until 2030. These are enormous

no need to constantly reinvent the wheel,

ecological footprint. Sustainable invest-

sums of money. They also underline the

and bonds issued by construction clients

ment 2.0 means investing responsibly in

huge investment opportunities in various

from the past can also support sustain-

the future and moving forward together

sectors, because, among others, industrial

ability and a good climate. For instance,

on the path of transforming the built en-

and IT companies active in fields such as

the building physics of thick walls in old

vironment.

PREFACE

NEW HORIZONS IN THE CONSTRUCTION INDUSTRY

NEW HORIZONS IN THE CONSTRUCTION CHALLENGES AND Predicting the future based on past events is something of an Olympic sport among investors, as it can lead to the timely recognition of trends, promising business areas, and the challenges of the future. When it comes to assessing the sustainability of buildings and the construction industry, it is important to analyse all of the opportunities and challenges in this very diverse area.

In order to arrive at a solid ESG assessment

mographic change are also driving demand

of buildings, all of the components have to be

for housing. Cities are growing and the trend

taken into consideration, from the beginning

towards more residential space per capita is

of a structure’s lifecycle until its demolition.

also rising. As a result of all of these factors,

This includes the selection of building mate-

there is more and more construction activity.

rials, utilisation of the building, aspects of the

According to Statistics Austria, in 2012 hous-

circular economy, and dismantling. Ultimate-

ing completions amounted to around 50,000

ly, as with the sustainability assessment of so

new dwellings per year, with this figure climb-

many other investment goods, the situation

ing to roughly 70,000 by 2021, and the trend

is rarely black and white when it comes to

is accelerating. Viewed from an investor per-

what is “green”. For example, some emis-

spective, all of this indicates a growing sector.

sions-intensive construction materials have very long lifecycles and cannot be substitut-

Residential buildings promote good social

ed in many projects. You can’t build wind

cohesion and contribute strongly to people’s

farms without cement. Nevertheless, it is

sense of well-being. Suitable housing is a ba-

possible and necessary to improve sustaina-

sic need for everyone and thus also repre-

bility in construction, while at the same time

sents an important contribution to fighting

not losing sight of the “big picture”.

poverty. Along with residential construction,

MORE AND MORE DEMAND FOR BUIDLINGS

infrastructure, and administration. Economic growth and ensuring prosperity are also

residential space is increasing. A growing pop-

driving forces in the construction industry.

ally, families are becoming smaller and more people are living alone. Urbanisation and de-

LEAD ARTICLE

tion resources are also used for industry,

A number of trends suggest that demand for ulation needs more room to live. Addition-

a large portion of the available construc-

ENVIRONMENTAL IMPACTS

Erecting buildings, however, generates a

INDUSTRY: OPPORTUNITIES FOR INVESTORS number of problems. First and foremost:

hind soil sealing. Once the soil is sealed, it is

high carbon emissions. The construction of

very difficult to return it to normal conditions,

a conventional masonry house generates

and this has wide-ranging consequences, as

approximately 40 tonnes of CO2 emissions.

biodiversity is reduced and ecosystems are

Scaling this figure up to the European level, the construction industry alone accounts for 9.4% of domestic carbon emissions, and this does not even include the environmen-

destroyed.

SOIL SEALING

Soil sealing also leads to higher tempera-

tal impacts of the subsequent use phase.

tures, which results in more hot days and

Around 40% of the energy consumption

tropical nights. That is the reason, for ex-

in the European Union can be traced back

ample, that an outdoor temperature of

to the use of buildings and 38% of global

30 degrees Celsius feels much warmer in

carbon emissions stem from buildings. With

Vienna than it does in more rural areas.

due consideration of these challenges, the

Not only is CO2 emitted directly by con-

EU initiative “Fit for 55” requires that all new

struction projects, due to the lack of green

structures must be zero-emissions buildings

areas less photosynthesis, i.e. the transfor-

by 2030 and that all existing buildings must

mation of carbon dioxide into oxygen, also

be turned into zero-emissions ones by

takes place. From 1995 to 2021, there was

2050. In light of these figures, it is important

a 53% increase in developed settlement

to look for alternative construction materi-

area in Austria, while the population only

als. Because one of the most common and

rose by 12%. As a result, Austria is perma-

cheapest materials is concrete.

nently losing around 0.5% of its agricultural

CONCRETE AS A PROBLEM

To use concrete as a building material, you need a binder: cement. Above and beyond this, reinforcing steel bar is also needed for

Mathias Zwiefelhofer Sustainability Office at Raiffeisen KAG

land every year.

WASTE CONSTRUCTION RUBBLE

Waste is also produced where resources

masonry construction. These materials are

are used. The construction industry is re-

usually used on the basis of cost consider-

sponsible for much of the waste generat-

ations, but they have a particularly negative

ed at the global level. The demolition of

impact on a building’s emissions footprint.

buildings literally results in mountains of construction rubble. In terms of waste

The substantial emissions are not the only

generation within the EU, the construc-

problem. New structures and the related

tion industry tops the table with a share

road construction are the biggest factors be-

of 36%, and a large part of this waste goes

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NEW HORIZONS IN THE CONSTRUCTION INDUSTRY

LEAD ARTICLE

SUSTAINABLE INVESTMENT | November 2023

into landfills. This in turns involves travel-

able in other aspects of the circular econo-

ling long distances and more soil sealing.

my, such as the reuse of construction ma-

Recycling options for construction mate-

terials and durability.

rials vary widely, but fundamentally there

CONSTRUCTION IN THE FUTURE

is still great potential in this field. For instance, the share of construction waste recycling in Germany is quite high, at 75%.

The wide-ranging sustainability risks in the

Considerable opportunities are also avail-

building industry

Chart: Environmental impacts

CEMENT

Construction industry generates

9.4%

of domestic

BUILDING MATERIALS

CO2 emissions

SUSTAINABLE MATERIALS

Source: Raiffeisen Kapitalanlage-Gesellschaft m.b.H. 2023

LEAD ARTICLE

„

NEW HORIZONS IN THE CONSTRUCTION INDUSTRY

“8% of global carbon emissions stem from cement production.”

must addressed in a variety of ways. Tech-

With “green” construction, the focus is on

nical innovation should integrate circular

sustainable materials without toxic problems,

economy aspects and the ideal selection

that are biodegradable, recyclable, and sus-

of construction materials. Pragmatic solu-

tainable, and which are available and trans-

tions are needed, and a construction in-

portable at the regional level when possible.

dustry that is fit for the future can only be created by combining different measures. The most important aspect is the selec-

CIRCULAR ECONOMY

The circular economy brings great hopes for

tion of the best construction material.

a turnaround in the construction industry

Concrete and cement are irreplaceable

and involves much more than just recycling.

for the energy transition (cf. wind turbines,

Aspects related to the circular economy

hydroelectric plants, etc.). However, from

must already be taken into account during

a sustainability perspective, these ma-

the planning stage of a project. The circular

terials are no longer the best option for

economy is very important if the goal is to

private residential construction and new

make construction materials reuseable in the

public structures. Solid wood solutions or

event of later dismantling. In this regard, the

brick masonry are practical alternatives for

principle of re-use can be a game changer,

many building purposes, even though con-

because from the planning phase through to

crete is currently still cheaper.

construction there are numerous possibili-

Chart: Circular economy in the construction industry

Reduce material use Make products last longer

LEAD ARTICLE

Re-use principle

Keepin-use principle

Build long-lasting buidlings Renovate old buildings

SUSTAINABLE INVESTMENT | November 2023

ties to reduce the use of materials and make products last longer. The principle of “keep in use” is also very important. Long-lasting buildings reduce the amount of soil sealing

CONSTRUCTION MATERIAL CEMENT

Thanks to its tried and trusted track

and the use of resources; and old structures

record, cement is the standard bin-

can be given a new lease on life with ren-

ding agent of choice in the cons-

ovation. It is vital to keep buildings, building

truction industry. However, over

components, and materials in use as long as

its entire lifecycle, this material has

possible and to recycle them at a high level

its drawbacks: First, it takes a lot of

of value. In line with this, the reconstruction

energy to make so-called reactive

and renovation of existing buildings is a very

cement clinker, which is produced

ground storage facilities. Concrete

promising option as a way to integrate sus-

by heating limestone to 1,450 de-

rubble generated from the demoliti-

tainability into the construction industry.

grees Celsius. In the future, it will

on of buildings is generally “re-used”

be possible to reduce this energy

as a filler, but this is not a closed-cyc-

The renovation of buildings not only in-

consumption through technical opti-

le solution. Accordingly, in the future

creases the lifespan of real estate, it also

misation, and in an ideal situation the

concrete should only be used very

helps to improve energy efficiency and

production facilities would be opera-

selectively and in long-term applica-

reduce the consumption of resources.

ted using renewable energy. Second,

tions, for which there are currently

Energy-optimised new structures are par-

the chemical process involved in fi-

no technical alternatives.

ticularly important from a sustainability

ring the limestone generates large

perspective. However, existing buildings

amount of CO2, which accounts for

also need to be considered if one is to

around two-thirds of the emissions.

take a holistic view of sustainability in this

Alexander Toth Fund Manager at Raiffeisen KAG

When discussing concrete as a construction material, it is also necessary to take into account the rein-

industry. In an ideal case, there would only

The cement industry’s solutions to

forcing steel used to provide tensile

be energy-efficient, perfectly sealed build-

reduce emissions are to partially sub-

strength, as this is also the basis for

ings. In reality, however, this is generally

stitute the clinker with additives such

technical progress like other indust-

not the case, and old buildings can often

as blastfurnace sand or fly ash, but

rial metals. Steel has good recycling

only be restored to new, sustainable glory

these materials are only available in

properties, as this metal can be reu-

through cost-intensive renovation work.

limited quantities and also generate

sed as often as desired and can be

carbon emissions, or alternatively to

recycled without quality loss using

More at

separate the carbon dioxide that is

far less energy than needed for new

www.rcm.at/kreislaufwirtschaft

produced and sequester it in under

production.

LEAD ARTICLE

SUSTAINABILITY CERTIFICATES FOR PROPERTIES

The definition of clear, comprehensible standards should contribute to a high level of objectivity and transparency. On the one hand, independent certification can strengthen the awareness of sustainability issues, and

PR PERTY CERTIFICATIONS Sustainability certifications for properties are intended to help real estate companies to develop, maintain, manage, and in some cases reposition their properties in a sustainable manner, by promoting environmentally and socially sustainable practices, ideally over the entire lifecycle of a property.

on the other hand it makes it easier for building users (tenants, for example) and investors mobility. The klimaaktiv building standard of-

Sustainable Building Council (DGNB,

fers various levels of certification (Bronze,

Deutsche Gesellschaft für Nachhaltiges

The most commonly found certifications are

Silver, Gold) for buildings, concentrating on

Bauen) also takes into account econom-

those issued by the providers LEED, BREEAM,

infrastructure quality, high energy efficiency,

ic factors, assessing, among other things,

and DGNB/ÖGNI, while the klimaaktiv certi-

the use of renewable energy, the utilisation

energy and resource efficiency, ecologi-

fication is frequently used within Austria. The

of environmentally-friendly materials, and

cal and technical quality, and user-friend-

large providers certify both new buildings and

thermal comfort.

liness. It offers several certification levels

to identify sustainable properties.

existing structures (according to different cri-

(Bronze, Silver, Gold, Platinum), as well

teria), and distinctions are also made between

as special certifications such as DGNB

different utilisation profiles.

Diamond (for outstanding design quality) or ÖGNI Crystal (for outstanding social

The following certifications are found most

sustainability). It is also possible to obtain

commonly on the European real estate mar-

bauXund

another

certifications for entire neighbourhoods

kets. It should also be noted that each certi-

Austrian certification system that focuses

schadstoffgeprüft

that are planned and implemented with

fication has different focal points or different

on building materials. This certification is

sustainability in mind.

emphasis in various areas (such as environ-

awarded to buildings whose chemical and

mental, social, and economic aspects).

product management aspects are assessed in an in-depth review and which are erected in accordance with environmentally-sound construction requirements. The results are also checked by way of interior air sampling.

The klimaaktiv certification is an initiative

In Austria, buildings are certified by the

of the Ministry of Climate Action, Environ-

Austrian Sustainable Building Council

ment, Energy, Mobility, Innovation, and Tech-

(ÖGNI).

nology, and is part of the Austrian climate strategy. This programme promotes sustain-

able construction and renovation, the use of

In addition to ecological and social aspects,

renewable energy, energy conservation, and

the certification system of the German

SPECIAL TOPIC

LEED

The LEED certification system (Leadership in Energy and Environmental Design)

Christoph Drdla Transaction Manager at Raiffeisen Immobilien KAG was developed by the U.S. Green Building

of a property, which are assessed in terms

Council (USGBC). It establishes stand-

of the following ten categories: air quality,

ards for energy-efficient, environmental-

water quality, nourishment, visual comfort,

ly-sound, sustainable buildings. Here again,

movement, thermal comfort, interior and

there are several certification levels (Cer-

building acoustics, low-emissions and re-

tified, Silver, Gold, Platinum) and various

source-efficient construction materials,

criteria are assessed, such as environmen-

HQE (Haute Qualité Environnementale) is a

satisfaction, community, and innovation.

tal performance, water efficiency, energy

French sustainability certification, which is also

Again, the certification levels range from

efficiency, materials and use of resources,

fundamentally applicable at the internation-

Bronze, Silver, and Gold to Platinum.

interior quality, and innovation. As it often

al level as well. It is used for buildings under

references US standards, it is mainly found

construction or in use, as well as sustainable

One common feature of all of the building

in the USA, or used when US tenants lease

neighbourhoods and infrastructure. The main

certifications is that the sustainability as-

larger areas.

focal points are environment, quality of life,

pects of a property are analysed by inde-

economic viability, and responsible manage-

pendent third parties and documented in

ment. The certification levels are Good, Very

accordance with a standardised assessment

Good, Excellent, and Outstanding.

system, generally featuring several different

BREEAM

The BREEAM programme (Building Research Establishment Environmental As-

quality levels (such as Bronze, Silver, Gold,

sessment Method) was developed in the

etc.). Some of the certifications (such as

United Kingdom and assesses buildings

WELL and bauXund) consciously focus on

in terms of their ecological, social, and

individual subcomponent aspects, while

economic sustainability on the basis of

others take a broad, holistic approach to the

criteria such as energy, water, materials,

topic of sustainability and also consider eco-

health, and well-being. The certification

nomic criteria (such as DGNB for example).

levels range from acceptable, satisfactory,

WELL is a building certification that

good, and very good to excellent. In the

concentrates on the human health and

Since the EU Taxonomy Regulation en-

German-speaking area, the certifications

well-being of building occupants. This sys-

tered into force, some of the providers

are issued by the organisation TÜV Süd.

tem focuses strongly on the interior spaces

listed above also perform reviews of real estate for conformity with the Taxonomy. The EU Taxonomy is a classification system

Chart: Certification level, based on the example of DGNB

for economic activities which make significant contributions to the achievement of

FROM PLATINUM TO BRONZE Total score Minimum score

defined environmental objectives. One can expect that this topic will receive greater from 80%

from 65%

from 50%

from 35%

65%

50%

35%

–%

Source: DGNB

* This level is only available for certification of existing structures or for the certification “Building Operations”.

attention in the future in relation to property certifications and that, over the medium term, these two kinds of assessments will overlap or even merge together.

SPECIAL TOPIC

Round-table discussion on the integration of sustainability aspects

Moderated by Dieter Aigner, Managing Director of Raiffeisen KAG

Marc Guido Höhne Managing Director, Delta Projektconsult Wien

Johann Marchner Managing Director, Wienerberger Österreich

Karin Stieldorf Technical University Wien, Institute for Building Construction

Alexander Toth Raiffeisen KAG

ROUND-TABLE-DISCUSSION

in planning and construction

For many decades, speed, profit, and effi-

Are your customers open to more sustainabil-

ciency were the key factors in the construc-

ity in their construction projects?

tion industry. Is the focus now shifting more

Marc Höhne: Unfortunately, I have to say

towards ESG?

that many of them simply don’t understand

Marc Höhne: The topic on everyone’s

why it is so difficult. And now, with energy

minds right now is energy, obviously also

prices lower again, the question arises as to

as a result of the war and the related ener-

whether the measures taken are the right

gy crisis. In particular, the goal is to reduce

solution from a long-term perspective. In

primary energy consumption, amongst

particular, when I am working with industrial

other things by using more renewable en-

customers and we have a depreciation pe-

ergy. Naturally, in relation to this, it is also

riod of more than four years, then the top-

important to achieve much higher energy

ic is irrelevant anyway. There is no further

efficiency for buildings, because otherwise

discussion about it. And even though prop-

it doesn’t do any good. With modern

erties in the industrial sector play a major

buildings, this is not the major challenge

role, the emphasis is often on the core busi-

and there are solutions, but there are

ness, while the property itself is a second-

significant difficulties with older buildings.

ary consideration. Of course, very different

And when we talk about energy produc-

approaches are taken by property owners.

tion, we mean using geothermal and solar.

The big institutional players have had this

In this regard, however, the options are

topic on their radar for the last three or

very, very limited when inner-city are-

four years. They are well prepared and have

as are involved, where the rooftops and

at least a rough idea of what they want to

lots are very small. So, what can one do?

achieve, and that’s important. On the other

What we see is that a lot of our customers

hand, I still run into plenty of public sector

think that all they need to do is check off

housing developers who are just getting

5 points on a list of 10 checkpoints and

started and have not formulated any strat-

then they’re done. If it was that easy, we

egy at all about how they want to approach

wouldn’t all be constantly working on this

this topic. They are still in the dark. In our

topic. In our experience, it’s ultimately a

opinion, it is currently extremely important

combination of different measures that

to raise awareness about this topic, in or-

leads to success. And for every project, it

der to point out the criteria and the ways

might be a similar solution, but it’s real-

they can move towards more sustainability.

ly never exactly the same one. So, a lot

Sometimes they are simply overwhelmed by

of time and energy has to be invested in

the variety of options. Unfortunately, when

every project to really find the right solu-

they don’t have a strategy it’s often the case

tions, with the right cost-benefit ratio.

that they immediately focus on what they

SUSTAINABLE INVESTMENT | November 2023

“ESTABLISH THE PRINCIPLES AT AN EARLY STAGE” think has the biggest impact on the climate.

figure out if the building works or not.” This

straw and loam being used in new buildings

Instead of doing exactly the opposite: look-

is just not the way it works anymore. Even

in the future. However, you can use straw

ing at what is easiest to implement. And

at the planning stage, I have to know that

mats, which work well as an insulation ma-

where they can achieve the biggest impact

the project is moving in the right direction

terial. A lot of research remains to be done

with small, focused measures. To some de-

and won’t have to be scrapped in the end.

for loam construction to be economically

gree, there is a lack of orientation about

Networked thinking has become a very im-

and ecologically successful, so that it is also

how to handle the subject of sustainability

portant goal. And because construction is a

finally accepted. There also needs to be

and how to expand the horizon.

highly diverse field, this ranges from region-

some development in terms of design. And

al planning and urban planning all the way to

of course, people’s awareness and under-

Ms Stieldorf, you’re head of the programme

details such as considering what construc-

standing needs to be enhanced, so that they

“Sustainable Building” at the Technical Uni-

tion materials to use. Ultimately, however,

accept buildings that are made of loam.

versity of Vienna. What is your experience of

the first decision at the start of the planning

this paradigm change, if it is indeed one, and

process is whether I want to build using

Mr Marchner, as managing director of the

where do you still see deficits?

wood, concrete, straw, other regenerative

world’s leading brick manufacturer Wiener-

Karin Stieldorf: Our programme provides a

materials, or out of bricks. Every construc-

berger – what do you think about buildings

very good overview of this subject. We’ve

tion material is justified, if it is used correct-

made out of loam?

recently seen a shift that is very exciting. In

ly in the right location and is the best solu-

Johann Marchner: I’d like to emphasise that

the past, participants were mainly interest-

tion there. Networked thinking, from very

we already have everything we need for

ed in supplementing their existing knowl-

large to very small dimensions, is important.

sustainable construction: there is no need to

edge of the subject. Now, we have a lot of

But the location is also crucial for finding

really invent anything new. We simply have

young academics and architects who want

the right solution, in regional, topographical

to define our requirements for the buildings

to expand their knowledge and work to-

and geographical terms.

and their utilisation. If we decide to go with

gether more confidently with property de-

loam construction, then we just have to ac-

velopers. They don’t want to get bogged

Will wood, loam, and straw play a bigger role

cept that certain applications and require-

down in discussions; they want to be able to

in the future?

ments are not possible. For instance, with

present solid arguments. In principle, I think

Karin Stieldorf: One of the things we fo-

a normal wall thickness, you just won’t be

this is a great basis. In my opinion, I think it

cus on is the construction and renovation

able to hang kitchen cupboards on the wall.

is really important to reach a consensus on

of historical loam structures. But things

We have to be clear about our expectations

the criteria for sustainable construction, so

change, and loam will have to be used differ-

for each individual structural unit. The only

we don’t end up saying, “Well, I have my

ently in the future on order to be econom-

reason for this is that we always try to plan

focus, and you have yours”. That was pretty

ically successful. For this to happen, a new

each building individually, from the ground

typical in the past. An architect designed a

approach is needed in terms of production.

up. If you look at the automotive industry

building and then said, “OK, I’ll pass this on

This may also include how the connection

though, you can see that it uses platforms.

to the structural engineer now, and this on

with insulation looks. The traditional insu-

And then it builds variants based on these

to the construction engineer, and this on to

lation material in loam construction was

platforms, thousands of variants on an in-

the building physics engineer, and they can

straw, but I can’t really imagine the mix of

dividual platform. But we are always trying

ROUND-TABLE-DISCUSSION

to invent each building new every time. This

don’t ask where the wood comes from. It’s

transport routes are short. And if we are

results in more work and higher costs.

really important to get the whole story.

also able to decarbonise our production process, then I think that bricks can beat

What strategies are you pursuing to make

How are you working to make brick an envi-

practically any other construction material

your products more suitable for a sustainable

ronmentally-sound building material?

in terms of the ecological footprint.

construction industry?

Johann Marchner: We are building the

Johann Marchner: Sustainability is a highly

world’s first-ever carbon-free brick facto-

What is the investor perspective on this topic?

motivating topic for us. And two big parts of

ry in Uttendorf right now, which doesn’t

Alexander Toth: If one looks at the global

this issue are energy and CO2. At the same

use fossil gas; it only uses green electricity.

carbon footprint of the construction sector,

time, I have to say that up to now we have

The plant is already under construction.

cement accounts for around 8% of it. That

not faced any supply problems or any prob-

This means that in the future there will be

is very high. Of course, we are interested

lems with energy costs, because we have

a brick that essentially has no carbon foot-

in identifying which innovations can help to

long-term contracts and thus we are not

print from production. I can only underline

reduce this ratio, and what technical options

impacted by the fluctuations. But it is clear

what Ms Stieldorf said: the point is to work

there to press forward with the transfor-

that manufacturing bricks still results in car-

together, frankly, so that we can achieve

mation of this sector. And there are a large

bon dioxide emissions, because on the one

results together and not make our plans

number of very small components involved.

hand we use natural gas and on the other

without people. First of all, we all have the

Technology plays a major role. As for the

hand as a raw material clay contains dolo-

responsibility to be transparent with the fig-

materials themselves, a lot of work has al-

mite or carbonate, for example. Of course,

ures, data, and facts, and secondly we have

ready been done in the field of producing

if I take a look at the Ringstraße in Vienna,

to make the lifecycle of the building the

cement and clinker. Production has already

it’s clear that masonry buildings last 100, 150

centre of attention. For us, sustainability is

become a lot more sustainable and some

or even 200 years, and so they are sustaina-

something that we are putting in practice.

of it can be substituted. But when we are

ble simply based on their lifespan. And if you

For decades now we have only used green

talking about substitution, we quickly arrive

compare the energy data for an old brick

electricity for our production. We are re-

at the issue of the regulatory framework,

building with an identical structure built with

habilitating our quarries and our clay mines.

which only allows certain qualities for specif-

modern construction techniques, you often

Not just because of the legal regulations,

ic applications. And if I have to take delivery

find that the old building substantially out-

but because biodiversity is a key topic for

of different batches of concrete and pre-

performs the new one in terms of energy

us. And of course, we are working to con-

mixed concrete, it quickly become difficult if

efficiency. If we do not attempt to distort

serve the raw materials as much as possible

not impossible to get any work done.

things that are dictated by building physics,

and to fire them with the highest possible

then we have everything we need to be

level of energy efficiency. For several years

What innovative developments play a role in

able to build sustainably. And of course, it’s

now, many of our companies have been us-

this regard?

a question of transparency as well. While

ing construction rubble as a valuable source

Alexander Toth: The big solution that is

people are happy to say that wood is an en-

of material. We are also producing locally;

currently a topic aims at net zero by 2050.

vironmentally-friendly building material, they

our value chain is rooted locally, and the

This means that unavoidable carbon emis-

“ESTABLISH THE PRINCIPLES AT AN EARLY STAGE”

NACHHALTIG INVESTIEREN | Juni | Ausg. 39

Discussion with Marc Höhne, Johann Marchner, Karin Stieldorf, and Alexander Toth

sions will have to be used elsewhere or ex-

new construction. I am sure of that. What’s

of a 100-km race, we’ve maybe run five. If

tracted from the air. Carbon capture may

more important is that we really need to

that much. The main reason for this is that

then become a major issue, and there is

significantly increase the renovation rate

the stakeholders in the construction indus-

already a lot of capital flowing into this area.

from the current level of 1%. We have to

try are not yet cooperating with each other

It would be great if cement were only used

get to 3–4%. Otherwise, we won’t come

strongly when it comes to manufacturing

where it is necessary, for certain construc-

even close to achieving the EU’s climate

their materials and components. Many of

tion projects such as hydroelectric power

targets, because too much of our existing

them are too focused on their own little

plants or other special applications. Possible

stock of buildings is just too energy-ineffi-

market niches. There needs to be a lot

future alternatives to cement are naturally

cient. As for new construction, careful use

more communication with each other. Af-

also interesting for investors. And the top-

of resources is the key point, in particular

ter all, what is the circular economy about?

ic of energy is very interesting. Because in

that we prioritise the selection of building

We want to reuse materials, but not in a

Europe a large amount of energy resources

sites completely differently than we have

downcycling process, for example that I

are pumped into buildings, and this could be

in the past. It’s simply the case that far too

crush concrete after demolition and then

significantly lowered, for example with re-

much is done backwards when it comes to

use it as foundation layer for infrastruc-

cuperation. Water consumption could also

zoning. For instance, I think it is sad that the

ture construction. The idea is to reuse the

be lowered. From an investment perspec-

city of Vienna is rezoning really excellent ag-

component, i.e. the material, in a kind of

tive, building engineering is also a major area

ricultural land in Rothneusiedl for construc-

upcycling, in the condition it was before.

of interest. Along with smart cities: How

tion purposes. The use of other brownfield

And right now there is simply not enough

is it possible to shorten transport routes?

sites in Vienna and the vicinity would be a

of this. There are good approaches, but I

How can resources be used more optimal-

better alternative. What’s really important

think there is too little sharing among the

ly? Everywhere you look, development and

for me, and this brings me to the investor

parties; for instance, when we ask our cli-

innovation are driving forces. And our focus

perspective is that brownfield investment

ents to consider standardised, modularised

is always on things that can be measured. In

should always be preferred over greenfield

technologies, a lot of them are not willing

this regard, not everything can be measured

investment. Greenfield sites should only

to pay the additional costs in the planning

in quantitative terms; you also need quali-

be an option if certain conditions are met,

phase and/or to do the development work

tative assessments from experts within the

for example unproductive soils that can no

as first movers.

field. For orientation, we use the data that

longer be used. Every single square metre

the companies provide to use, and the an-

of land that is sealed is just one too many.

swers that we get directly from the compa-

How would it be possible to improve or initiate communication?

nies in dialogue as part of our shareholder

What role does the circular economy play in

Marc Höhne: There just have to be fo-

engagement activities.

the construction industry?

rums where the various stakeholders can

Marc Höhne: I’ve been studying the subject

exchange ideas. And the legislator also

Is it true that renovation beats new construc-

of the circular economy for more than eight

needs to be involved. Because a lot of

tion when it comes to sustainability?

years now. Unfortunately, we are still really

the aspects of the circular economy are

Marc Höhne: There is always going to be

just at the very beginning in this field. Out

well-intentioned, but they can’t be im-

ROUND-TABLE-DISCUSSION

ROUNDTABLEDISCUSSION

plemented due to legal regulations. For

frame” construction. This is essentially a

instance, if I want to reuse an insulation

framework with concrete floors, that can

board from an existing building, some-

have quite large spans and can also be ac-

times I am not allowed to do that. I am

tivated. This is a big advantage. I could also

forced to dispose of it. The stakeholders

use recycled concrete for this. It results in

involved have to talk to each other and

a load-bearing structure which has a long

there has to be an understanding that

lifespan and can be adapted all around,

things have to change. This extends deep

inside and out, to the needs of the local

into the regulatory framework. If we ap-

climate or the local building characteristics.

ply some of the current standards and in-

Between the load-bearing elements, I can

terpretations, then some of our buildings

use wood, I can build it myself, or of course

are just simply overdimensioned, in terms

I can also use brick masonry. Ultimately, I

of the technical aspects. We clearly have

have a long-lasting load-bearing structure,

to move in the opposite direction. When

which is surrounded by more flexible, re-

it comes to designing technical facilities,

placeable components. This is really a sus-

sometimes we only need 40 to 50% com-

tainable approach.

pared to the standard, in order to be able to operate economically. So, there’s a very

What role does the circular economy play at

wide range of factors at play, and they all

Wienerberger?

have to be addressed in parallel.

Johann Marchner: For a long time, construction just consisted of putting one

Ms Stieldorf, I guess you agree?

stone on top of the other. But nowadays

Karin Stieldorf: Yes. But for me, what’s

we have five plants manufacturing prefab

missing from this is the climate. When

brick components in Austria to make it

we look at which building materials are

easier for people on construction sites and

being used where, we can see that a lot

to save time. But aside from bricks, there

more wood is used in western Austria.

is no construction material that works

This makes sense too, because the higher

completely on its own, and I think I pretty

up I am, the fewer problems I have with

much know them all. Wienerberger is cur-

summer conditions. In the eastern part of

rently building the project Wildgarten at

Austria, wood does not have such a strong

the Rosenhügel, which has eight stories. It’s

tradition in building, and I just need more

monolithic construction, using only brick

mass to make buildings fit for summer. We

masonry. It can be completely dismantled

have done a lot of research on this issue

at the end of the lifecycle. The principle,

and developed some solutions. One ex-

a well-known, large property developer,

ample, which I really like for multi-floor

is building it like this, because it will retain

residential buildings, is so-called “space-

ownership. And it knows what it is doing,

“ESTABLISH THE PRINCIPLES AT AN EARLY STAGE”

„

SUSTAINABLE INVESTMENT | November 2023

“With regard to the circular economy, we will have to pay a lot more attention to the selection and management of construction materials.”

because this building will have significantly

used before 1996, before the regulations.

cle looks like will become increasingly im-

lower maintenance costs, at least for the

These old materials are nothing at all like

portant. This may even result in a new de-

walls. It’s this kind of thing that demon-

the insulation that is used nowadays, which

sign look, which is not just possible but also

strates that we don’t need to invent any

is integrated directly into the bricks. Some

very desirable. In any case, we will have to

thing new. What we need to do is bring

companies have made a lot of progress

work with building materials differently in

all of the stakeholders together to make

in this field. Our standpoint is to use old

the future, and more consciously. I think

more progress with sustainable building.

buildings as long as possible, when it is

that Building Information Modelling offers

In Vienna’s Seestadt district, we are erect-

technically feasible. Because even if I gut a

great opportunities, because the individual

ing a structure based on a 10-year old idea

building and have to reconstruct it, say be-

materials can be included in the planning

from the architects Baumschlager Eberle,

cause I have an office building and I want to

process, together with their specific prop-

called ROBIN. The buildings essential-

make it into residential space, this is still far

erties. This may result in better coopera-

ly do not have heating or cooling. It has

better in terms of the emissions and eco-

tion going forward and a higher degree of

dual-layer, massive walls, using 2 x 38cm

logical footprint, and ideally it’s combined

digital networking as well. I think that new

bricks. But after many years of experience,

with the installation of modern technol-

forms of production will emerge, maybe

I can tell you: it works. What makes this

ogy for heat recovery and ventilation. Of

not in brick production, but in other areas.

approach so successful? It exploits normal

course, we are also interested in the most

And so I see opportunities for loam, straw,

building physics effects, such as deep win-

effective possible use of resources.

and other regenerative materials in specific projects.

dow recess, which leads to natural shading, and it also utilises the natural thermal mass

Do you have any final requests, interests or

Marc Höhne: People often think that sus-

of the brick.

remarks?

tainability and architecture are inseparably

Johann Marchner: I have a request directed

linked with each other, but this really isn’t

What opportunities does the circular econo-

at the legislators. Please get rid of the exces-

the case. But the situation is improving

my offer on the capital markets?

sive subsidies for specific construction ma-

and especially the young generation of ar-

Alexander Toth: Circular economy means

terials based on ideological considerations.

chitects is very keen on the topic of sus-

that at the end of their lifecycles, build-

If we are supposed to use wood, then let’s

tainability. That said, they are often totally

ings can be dismantled into their compo-

use Austrian wood, from sustainable for-

frustrated, because in 90% of the projects

nent parts without generating any toxic

estry. And that has to be transparent and

that happen, sustainability is often the first

waste and that these parts can then be

demonstrated with certification of origin.

thing to be sacrificed to economic consid-

reused for new construction again. From

Karin Stieldorf: With regard to the cir-

erations. In order for this not to happen,

an investment perspective, there’s a lot of

cular economy, we will have to pay a lot

sustainability has to be anchored in corpo-

complicated topics to unpack here. For ex-

more attention to the selection and man-

rate strategy and working on that basis it

ample, the bricks: for regulatory reasons, I

agement of construction materials. This

has to be developed at the project level, so

am not allowed to reuse bricks. Or com-

is a new element in the planning process,

that it can ultimately be implemented in all

ponents like the ceiling elements, which

which is linked to the other parameters of

of the key processes. What this also means

are poured and cannot be separated. Leg-

sustainability. This means that which ma-

is that one has to establish the principles at

acy pollutants are also a major topic. One

terials one selects, which characteristics

an early stage, which can only be changed

need only think of the insulation materials

these materials have, and what their lifecy-

with great difficulty later on.

* Neue Grundschulen

Edited by: Pia Oberhauser

ROUND-TABLE-DISCUSSION

TRANSFORMING THE JEUNEURS PROPERTY INTO UFO PARIS

BEST PRACTICE: SUSTAINABLE R VITALISATION mo-KAG was interested in certifying its

The story of the “Jeuneurs” office building and Raiffeisen Immobilien KAG got off to a slightly frightening start in 2006, when a fire broke out in a 5th-floor kitchenette on the day of closing, when the purchase price was to be transferred. Ultimately, however, Immo-KAG was able to successfully complete the transaction for one of the real estate funds it manages, albeit with a slight delay.

properties in the interests of sustainability, as a long-term investor. However, before the project could be carried out, it was necessary to go through a very meticulous process of agreeing with the majority of the roughly 120 co-owners of the car park and also terminating the

The six-story building was originally erected

of the building, in 2014 there was an ar-

existing leases to enable timely execution.

in 1972 with approximately 5,800 square

chitectural tender for the renovation of

Once this work was done, the project de-

metres of floorspace, as well as a separate,

the property, which was won by Axel

velopment and construction permitting

seven-level underground car park providing

Schoenert Architectes. The very good

could get underway.

300 parking spaces, which – rather unusually

construction quality of the load-bearing

– was jointly owned. Basically, the property

structure from the early 1970s and the

In 2016, an application for the renovation

was in its original condition when it was pur-

fact that the building plot was already fully

including a completely new glass façade

chased, i.e. it had never been thoroughly ren-

utilised made it easy to decide in favour of

was submitted to the authorities. Howev-

ovated. The massive concrete curtain-wall

full renovation, rather than a new build.

er, the Commission du Vieux Paris (a com-

façade was typical for the architecture of the

Along with economic considerations, the

mission of experts advising the construc-

1960s and 1970s. Despite the condition of

following sustainability aspects were also

tion authorities on historical preservation

the building, it was fully leased out thanks

defined as parameters for the renovation

matters) insisted that the façade from the

to the good location: it is situated in the so-

project in 2014:

1970s be preserved. At a number of meet-

called “Sentier” neighbourhood, a historical

- Preserving the existing structure as

ings, it was finally possible to convince the

part of town in the second district of Paris,

much as possible (cost savings)

Commission and the authorities that a new

near the city’s old stock exchange. Over the

- Ensuring maximum flexibility in utilisa-

façade was preferable, in particular so that

last 250 years, this part of town was mainly

tion (leaseability)

the task of removing the asbestos from the

characterised by textile trading, but start-

- Asbestos-free building (health and re-

building was not left to future generations.

ing from the 1990s it also became home to

use)

many Internet start-up companies thanks to

- Optimising energy efficiency (reducing

the good data connections. Nonetheless, at

operating costs)

the time of purchase, it was not part of cen-

- Certification of the property (quality

tral business district (CBD) in Paris, and most

certification)

of the tenants were from the IT sector. Although building certifications were not

Due to the mounting pressure on rents

such a common feature on the real es-

and considering the age and condition

tate market in 2014, even back then Im-

RESEARCH

Alfred Hajdu Senior Asset Manager at Raiffeisen Immobilien KAG

In order to establish a link to the appear-

development, in the interests of both the

ance from the 1970s, a new façade was de-

property owner and the tenant. Back then,

signed in agreement with the Commission.

it took a lot of hard work and convincing to

The project was then finally approved in

reach such an agreement.

2017, and the last remaining tenant left the

KEY DATA ON UFO PARIS: www.ufo-paris.com Address: 22–26,

property shortly before construction be-

After the project was completed, the en-

rue des Jeuneurs, 75002 Paris

gan at the end of 2017.

tire property was transferred to the ten-

Built: 1972

ant on March, 15, 2020, which just hap-

Purpose: Office

Comprehensive renovation work started

pened to be the day that the first COVID

Renovation: 2018–2020

in 2018, with only the load-bearing struc-

lockdown started. The successful transfer

Client: Raiffeisen Immobilien

ture (skeleton) being left in place. The car

amidst these difficult conditions once again

Kapitalanlage-Gesellschaft mbH

park with its roughly 300 parking places

underlines the commitment and dedica-

Architect: Axel Schoenert

remained in operation throughout the

tion of both the tenant and the lessor, as

Architectes / Paris

project. During the same year, a lease was

well as the quality of the building itself.

Certifications:

concluded with a single tenant for all of the

- BREEAM Excellent

office floorspace. One key point in this re-

Now, in 2023, the difficulties and enor-

- HQE Excellent

gard was certification of the lease contrast

mous efforts required have faded into the

- BBC Renovation

as a “green lease” for its whole duration. An

past and “UFO Paris” is one of the flagship

- Wired Score Platinum

agreement was also reached to have a say in

properties in the portfolio managed by

- Well Gold

the tenant’s selection of finishing materials,

Immo-KAG. UFO Paris ranks among the

Key facts:

so for example no PVC may be installed.

most modern office buildings in the centre

7,800 m² leasable floorspace /

of Paris and is also one of just five buildings

7 floors

Nowadays, five years later, this is complete-

with a Platinum certification by Wired-

1,360 m² per standard floor

ly normal, and certifications documenting

Score. This downtown area has developed

Subdividable into 3 variable

the quality of the property and the careful

into an excellent location and is now also a

units per floor

selection of building materials are a funda-

prime business location as part of the CBD

6.5 m² / person,

mental prerequisite for sustainable project

(“location, location, location!”).

for up to 1,000 employees Open spaces: landscaped interior courtyard / roof terrace / green wall

If you are wondering what UFO Paris means, the answer is “Unique Flexible Offices”.

Asset manager Alfred Hajdu, who is responsible for France, discusses this highly successful property development project which had some close calls.

RESEARCH

Herbert Perus Sustainability Office at Raiffeisen KAG

CORPORATE O THE TOPIC OF Due to its relatively high share in global greenhouse gas emissions, the construction industry is one of the most important areas with regard to the Paris climate objectives. The shareholder engagement activities of Raiffeisen Capital Management’s fund management on the topic of construction materials include dialogue with some of the largest producers of concrete, bricks, and cement. As part of these activities, roughly

Mathias Zwiefelhofer Sustainability Office at Raiffeisen KAG

20 companies around the world were questioned about their efforts to make the construction materials industry more sustainable. The following questions were sent to these companies: 1 How does your company contribute to sustainable building practices with the construction materials you supply, in particular with regard to the high level of carbon intensity in the construction industry? 2 What measures and strategies have you introduced to reduce the carbon footprint of your products and to have a positive effect on environmental sustainability? 3 How does your company integrate technologies or practices for carbon capture in its operations, and what effects do you anticipate from such in relation to offsetting the carbon emissions stemming from the manufacture and utilisation of your materials? 4 If your company uses technologies or practices for carbon capture, are you able to quantify the resulting reduction in carbon emissions?

RESEARCH

SUSTAINABLE INVESTMENT | November 2023

VOICES CONSTRUCTION MATERIALS 5 How does your company approach the issue of resource consumption in the manufacturing of your products, and what steps have you taken to ensure the durability and recyclability of your products in order to promote a more sustainable circular economy in the construction industry? 6 What is the significance of employee safety at your company, and what measures have you taken to reduce workplace accidents? Are you able to produce statistics or data on the frequency and severity of job-related injuries at your company in recent years?

1 & 2 (Buzzi Unicem, Italy)

could cut the company’s greenhouse gas

Cement production is one of the biggest

emissions by up to 8%. The company is

factors behind climate change, as it ac-

also focusing on carbon capture, product

counts for 8% of global emissions. There

optimisation, and the use of renewable

are a number of approaches to improv-

energy. The production of sustainable

ing the sustainability of cement produc-

construction materials is part of Buzzi

tion. One way is to reduce the ratio of

Unicem’s business strategy. The compa-

energy-intensive clinker in the cement.

ny underlines the growing demand for

Cement clinker is the component in the

low-carbon buildings and also identifies

material that is necessary for the concrete

the regulatory requirements as a business

to harden. The Italian firm Buzzi Unicem

advantage. According to Buzzi Unicem, all

has set the goal of reducing the ratio of

of this results in rising demand for its sus-

clinker from 75.4% in 2021 to 67.3% by

tainable products.

2030. This measure alone could lower the company’s total carbon emissions by up

3 & 4 (Heidelberg Materials, Germany)

to 9%. Another possible way to reduce

Since a large portion of the carbon emis-

carbon emissions is to improve the nat-

sions are generated by the chemical pro-

ural carbon uptake of the concrete. In

cesses in cement production and these

this regard, rapid carbonation is impor-

are difficult to reduce, there is often a

tant and according to Buzzi Unicem this

focus on later production stages when it

RESEARCH

ORPORATE C VOICES ON CONSTRUCTION MATERIALS

RESEARCH

SUSTAINABLE INVESTMENT | November 2023

comes to making the products more sus-

Holcim, the world’s largest construction

tainable. Within the cement industry, one

materials producer, already uses 20% re-

of the possible solutions is carbon cap-

cycled materials in its Swiss production

ture and storage (CCS), which involves

facilities, while maintaining the same

capturing and storing carbon emissions.

level of product quality. In its dialogue

Heidelberg Materials, which is headquar-

with Raiffeisen Capital Management, the

tered in the German city of the same

company stresses that different build-

name, sees itself as a pioneer in the appli-

ings have different quality requirements.

cation of this technology. The company is

More liberal regulations would be need-

testing the capture of high-purity carbon

ed by the construction supervisory au-

dioxide from the clinker production pro-

thorities, which would allow higher ad-

cess. The captured carbon dioxide will be

mix levels of many structures. According

used by the company in the production

to Holcim, concrete is perfectly suited

of synthetic fuels, for the cultivation of

for recycling and can be reused again and

microalgaes, and for the decarbonisation

again, by pulverising and sor ting it.

of recycling concrete. Heidelberg Materials is the first company industry-wide to

6 (Builders FirstSource, USA)

operate a large-scale facility for carbon

Workplace accidents cannot be ruled

capture, which is located in the Norwe-

out in the production of construction

gian town of Brevik and will capture 50%

materials. Accordingly, it is even more

of the plant’s annual emissions starting

impor tant for producers to take pre-

from 2024. This project has been under

ventive measures to protect employees

construction since 2021, without inter-

and to focus on continuous staff training

rupting current production, and will be

and instruction. Builders FirstSource, the

completed by 2024. The unit uses amine

second largest construction materials

technology, filtering out sulphur and ni-

producer in the USA, has lowered its ac-

trogen oxides and then storing them un-

cident rate by 15% since 2020. In order

derground.

to foster a lasting awareness of safety-related issues, all employees in production

5 (Holcim, Switzerland)

must par ticipate in a daily safety briefing.

Adding recycled materials in cement

For 2023, the company has set the goal

production can result in a lower con-

of reducing the number of accidents by

sumption of resources, but also repre-

another 10%. The company’s most im-

sents a risk for the quality of the cement.

por tant goal is to lower this figure to 0.

RESEARCH

STORA ENSO

COMPANY SUSTAINABILITY SPO TLIGHT “Our purpose statement is ‘Do good for people and the planet. Replace non-renewable materials with renewable products’. This underpins our belief that everything that can be made with fossil-based materials today can be made from a tree tomorrow, and highlights Stora Enso’s opportunity to contribute to a more sustainable future. Our goal is to offer fully regenerative solutions by 2050 – products that remove more carbon than they emit and support biodiversity restoration. We have set science-based targets for 2030 in three areas where we have the biggest impact and opportunities: climate change, biodiversity, and circularity. These ambitions stand on a foundation of conducting our business in a responsible manner.” Hans Sohlström, CEO

COMPANY HISTORY

than 20,000 employees, goup turnover

One has to look back deep into the an-

of almost 45 billion Swedish krona, and

nals of European economic history, all

was the owner of 2.3 million hectares of

the way to the 13th century, to reach

forest (equivalent to about one third of

the beginning of the fascinating story of

the area of Austria) in Sweden, Canada,

Stora Enso. The cornerstone of the com-

Por tugal, and Brazil.

pany’s history was laid when the Swedish bishop Peter acquired a concession

The roots of Enso in Finland reach back

to mine copper ore in the year 1288.

to 1872, when the sawmill W. Gutzeit

According to many commentators, this

& Co was founded, which was later re-

means that the Stora Enso Group is the

named to Enso-Gutzeit after its home

oldest company in existence today. For

industrial town in 1924 and finally to just

700 years, copper mining was the core

Enso.

business of the company called Stora in

RESEARCH

the Swedish town of Falun. In the 17th

In October 1998, three companies –

century, it held a two-thirds share of the

Stora, Enso, and Schweighofer, an Aus-

global market. In 1997, one year before

trian firm that had developed into one

the fusion with Enso, Stora had more

of Europe’s largest sawmills and lumber

Herbert Perus Sustainability Office at Raiffeisen KAG

companies after its foundation in 1642

vision is clear: to reach a fossil-free fu-

– merged together to form Stora Enso,

ture and have a positive impact on the

one of the world’s biggest wood pro-

environment. This stands to benefit eco-

cessing and paper groups. This status

nomic regions and their societies around

was also achieved with the acquisition

the world.

of many other companies, such as the Nor th American paper group Consolidated Papers for EUR 4.9 billion in 2000.

BUILDING WITH WOOD

In our meeting with Stora Enso, we were

After this, Stora Enso continued to grow,

able to pose many questions and also

in par ticular thanks to expansion in Latin

discuss the company’s various business

America and Asia. The company star t-

areas in depth. Among other things, we

ed focusing more and more on digital

were interested in the growth in the

publishing, by expanding its printing and

field of renewable materials in the con-

publishing activities to Internet and mo-

struction industry. The company had the

bile telephone platforms. Additionally, it

following answer:

has increasingly been pursuing a business model based on the circular economy.

“Our journey star ted about 15 years ago. Back then, we were strongly concentrat-

The 2010s saw the development of prod-

ed on the market for single-family homes

ucts using biomass as a base material and

in the DACH region. The business grew

suppor t for the general issue of sustain-

steadily and nowadays we deliver CLT

ability star ted in the Group. Since then,

(Cross Laminated Timber) globally from

this commitment has been strengthened

our four CLT plants. We also offer LVL

year after year, as clearly demonstrated

(Laminated Veneer Lumber). We sup-

in the statements made by CEO Hans

ply various different customer segments

Sohlström.

(ranging from installers and general contractors to proper ty developers) and a

At present, Stora Enso has operations

broad spectrum of building types, from

in over 30 countries, with more than

single-family homes and multi-story res-

26,000 employees. It is one of the

idential buildings to schools, offices, and

world’s leading companies in the field of

business proper ties. The long-term pros-

sustainable resources and is constantly

pects look very promising, as regulatory

developing innovative solution for the

conditions and other megatrends, such

wood- and paper-based products of the

as environmental awareness, suppor t the

present and the future. The company’s

underlying growth potentials. Moreover,

RESEARCH

STORA ENSO

compared to buildings that are erected

than wood, but in turn they too are not

with fossil-based materials, wood creates

durable in the case of poor planning,

a healthier living environment for peo-

construction, and maintenance. Right

ple, and it is a flexible material, both in

now, we are building our new headquar-

terms of its use in construction and as a

ters in Helsinki, which should guarantee

material in its own right, for example for

a lifespan of 100 years, and we think that

ear thquake-prone areas. Wood prod-

it will last even longer.”

ucts store CO2 over their entire lifetime, and depending on the type of product,

Stora Enso estimates that the construc-

i.e. the building, this can be very long.

tion timber segment accounts for roughly

Building with wood using our solutions is

20% of the total turnover in wood prod-

faster than with other materials and also

ucts, and the goal is to increase this ratio

saves labour, as the construction occurs

to over 40% in a few years. At present,

with components.”

Stora Enso says that it is building around

DURABILITY WITH WOOD

2,000 to 2,500 projects annually. Examples are the University of Singapore and

Many people wonder about the durabil-

a par tial new construction of the Tech-

ity and stability of wood construction.

nical Museum in Stockholm, which will

Stora Enso responded to our question

open in December. In the last 15 years,

as follows:

almost 20,000 projects have been implemented, including some award-winning

“We think that one can rightly say that

structures using the sustainable materials

many of the oldest buildings in the de-

produced by Stora Enso.

veloped world are built out of wood.

RESEARCH

What does that mean? It does not mean

Stora Enso is a very old but still highly

that wood is a durable solution for every

innovative company, which we are happy

application. It means that the lifespan of

to accompany as a constructive, sustain-

wood is almost unlimited in the case of

able investor in the years to come. On

good planning, construction, and mainte-

this journey, we will have more and more

nance. Materials like steel and concrete

to repor t on its progress on the path of

are often thought to be more durable

sustainability.

SUSTAINABLE INVESTMENT | November 2023

RESEARCH

FOOTPRINT TEAM LAUNCHES CYCLECHALLENGE and achieved some significant results:

Raiffeisen Capital Management (Raiffeisen KAG) places great emphasis on sustainability and not just in the investment solutions it offers. The company was an early mover in the field of operational ecology, for instance with its participation in the ÖKO Business meetings from 2008 to 2013. 2018 marked another milestone, when the company established its own footprint team with the primary goal of creating a dedicated group for continuous activities related to the guidance, measurement, and reduction of the company’s operational carbon footprint. The team is always working to connect the many different aspects of work life and private life and to draw on ideas from both of these spheres. One of its results was to launch the CycleChallenge initiative.

– In the month of May they cycled around 2,700 kilometres, – That’s equivalent to around 210 kilometres a day, mostly within Vienna itself! – The calculated amount of CO2 emissions that was avoided was around 500 kg.

The values for CO2 savings are based on the number of kilometres ridden and the assumption that these kilometres would otherwise have been travelled by automobile. A standard vehicle fleet was taken as the basis for calculating the average

One important aspect of Raiffeisen KAG’s

look at this and included this travel in Raif-

footprint is transport-related carbon emis-

feisen Capital Management’s climate bal-

sions. This can be easily quantified and is al-

ance, with the goal of improving this aspect

ways a balancing act for a service-oriented

along with the other measures. And ulti-

company which has to take care of its cus-

mately, actions speak louder than words...

achieving personal goals and reducing

tomers. We are committed to working to-

In May 2023, Raiffeisen Capital Manage-

gether closely with our customers as often

ment’s CycleChallenge was launched, as

CO2 emissions is that by cycling for a

and as intensively as possible, and this nat-

part of the “Austria’s cycling” campaign.

urally leads to business travel. Of course,

CO2 emissions.

PLUS ANOTHER 350 TREES

And even almost more important than

month these 13 employees supported

the planting of 350 trees, which Raiffeisen KAG donated as part of the campaign

we already have a range of measures and

13 company employees took the many

“Wald4Leben” for reforestation efforts in

principles in place in this regard, such as

good reasons to ride to heart:

Austria. One can just imagine how much

– travelling by train rather than by car,

– Reducing Raiffeisen KAG’s carbon foot-

reforestation would be possible in Austria – advocating for hybrid or completely virtual meetings, and – gradually replacing the vehicle fleet, etc..

AUSTRIA’S CYCLING

if everyone could support the planting of almost 27 trees every month by simply

– Cycling improves physical fitness

riding their bike to work, regardless of the

– Movement makes for better mood

amount of carbon emissions that would

– Only those who change themselves can

be saved.

motivate other to change

Another aspect that should not be ne-

– Success every day

Links:

glected is employees’ travel to and from

– Achieving personal goals

www.radelt.at, www.wald4leben.at

the office. The footprint team took a close

– …

INSIDE

Edited by: Bernhard Grubhofer

Top: Thanks to the CycleChallenge initiative by Raiffeisen Capital Management’s employees, another 350 trees were planted by the Wald4Leben project. Right: The CycleCommunity (Lidija Semlak, Martina Rigatti, Bernhard Grubhofer, and Claudia Palmetzhofer) is motivated for 2024!

INSIDE

LET’S INVEST TOGETHER IN A SUSTAINABLE FUTURE. PRESERVING VALUE. CREATING VALUE.

Raiffeisen Capital Management stands for Raiffeisen Kapitalanlage GmbH. created by Raiffeisen Kapitalanlage GmbH, Mooslackengasse 12, 1190 Vienna, Austria, as of: June 2022.