Hello 2025: a year of pivotal change in sustainable buildings

By Mike Mustapha, Division President of ABB Smart Buildings

As we enter 2025, it is an opportunity to reflect on how far we have come in the journey towards more sustainable buildings. The past year saw significant progress, including accelerated adoption of clean energy solutions, the transition to electric vehicles (EVs) and businesses embracing a variety of circularity and nature-positive initiatives. These milestones give us reason for optimism.

2025 isn’t just another year – it is a pivotal moment worldwide for electrification, decarbonization, and sustainability. Global CO₂ emissions are expected to peak this year¹, before beginning their decline as renewable energy is forecast to generate 35% of global electricity². However, this progress underscores both how far we’ve come and the urgent need to accelerate our efforts to meet ambitious global targets. In the fight against climate change, there is no room for complacency.

Key trends shaping the future of smart buildings

There are several megatrends leading the charge globally in 2025, which promises to be a year of transformation for buildings around the world:

1. AI and digital technologies optimizing building performance: Advanced sensors and AI are revolutionizing the way we manage energy in buildings. Smart systems now optimize lighting, heating, ventilation and air conditioning (HVAC), and power usage, reducing waste and improving efficiency³.
2. Electrification technologies taking center stage: From electrified HVAC to EV charging infrastructure, buildings are becoming key players in the energy transition. These technologies continue to reduce emissions but also enhance buildings’ resilience.
3. Sustainability and Energy Efficiency are key priorities: Enhancing energy efficiency in buildings is crucial, as they account for 30% of global final energy consumption and 26% of energy-related emissions⁵. Implementing smart energy management systems, automated HVAC controls, and adaptive lighting can significantly reduce energy waste and lower carbon footprints. By prioritizing these technologies, the building sector can make substantial progress toward global decarbonization goals.
4. The world is becoming increasingly urbanized: 68 % of the world's population is projected to be urban by 2050⁶^.This means the role of smart building management systems will continue to grow in importance. Integrated management systems are helping buildings achieve optimal performance, from energy use to tenant comfort, with technologies that predict, adapt and learn⁷.
5. The Challenges of an Aging Population: Globally, by 2050, the world's population of people aged 60 years and older is expected to double to 2.1 billion, meaning the majority of the world's population will live in countries where the absolute working-age population is declining⁸. This highlights the need to train and upskill the existing workforce, as well as support the drive for increased automation capabilities in certain areas of the world.
6. Labor shortages: Projections indicate that by 2030, more than 85 million jobs could be unfilled globally due to a lack of skilled workers. This shortfall drives the need for modular construction and automation to bridge skills gaps. Prefabricated solutions reduce reliance on specialized labor while expediting timelines, and digital tools enhance team productivity. By upskilling workers and embracing innovation, the industry can turn labor constraints into opportunities for growth⁹.

Opportunities and challenges for 2025

Despite the progress we have made, it is clear significant challenges lie ahead that highlight the need for partnerships, innovation and bold action to drive meaningful change.

Decarbonization must accelerate. The world needs to decarbonize 20 times faster than the current rate to meet the 1.5°C target outlined in the 2015 Paris Agreement¹⁰. At the same time, global CO₂ emissions will peak at around 39 gigatonnes per year (Gtpa) this year¹¹.

Pressure on infrastructure brought on by rapid urbanization is driving the need for more efficient, sustainable buildings in cities. The construction sector must respond by upskilling its workforce to retrofit and construct low-carbon buildings and use the technologies that are already here.

In addition, electricity demand is rising, and the pressure on electricity systems will only increase as economies expand and technologies such as EVs become more affordable and mainstream.

We are smarter together

These trends reflect the urgent need for the building sector to adapt to climate change challenges while leveraging technological advancements and addressing demographic shifts across key regions.

Through the power of partnerships and collaboration, I am confident we can reach these goals.

At ABB Smart Buildings, we are committed to helping industries and communities by overcoming the challenges of today with solutions that enable high performance, sustainability and efficiency.

This year, we are joining forces with the World Green Building Council’s (WorldGBC) European Regional Network as their electrification key knowledge partner. Their ‘Be Bold on Buildings’ initiative¹² is helping to drive policy that aims to cut building sector greenhouse gas emissions in Europe by 60%¹³ by 2030 in line with the EU’s climate objectives.

Through this network, we aim to collaborate with industry leaders to advance innovative customer solutions and access a robust network of experts and member organizations, fostering valuable insights and feedback. Together, we will contribute to meeting key sustainability frameworks, such as the Energy Performance of Buildings Directive (EPBD), while supporting a cohesive approach to shaping building policy across Europe.

Our smart building solutions – from integrated energy management systems to advanced electrification technologies – are engineered to deliver the best in performance and efficiency. Reports already suggest that integrating building automation systems with HVAC and lighting control can save 10–20% of total building electricity consumption, potentially contributing to a global energy reduction of around 3–5%¹⁴.

This is just the beginning, however. We will continue to collaborate with some of the world’s leading businesses to develop even smarter solutions and drive innovation in electrification.

The journey ahead

As we welcome 2025, there is much to celebrate. Low-emissions sources (including renewables) are set to account for almost half of the world's electricity generation by 2026¹⁵. The USA and Europe are on track to reduce fossil CO₂ emissions by 18% and 24%, respectively, by 2030¹⁶.

The path ahead is clear, and the outlook is positive, if we continue to build on these successes through collaboration and shared purpose. By working together – businesses, governments and communities – we can turn challenges into opportunities and make 2025 a breakthrough year for sustainable buildings.

So, let’s be bold, let’s be innovative, and let’s work together to overcome the challenges of our time. The future of smart, sustainable buildings is here – let’s build it together.

About the author

Mike is the Division President of ABB Smart Buildings and was appointed in February 2022. In this position he has full accountability for the performance of the global Smart Buildings business in ABB, which includes a broad portfolio of market leading home and building automation solutions as well as the portfolio for energy distribution systems and products. After starting his career in the U.S. in 1990 as an Application Engineer with Rotoflow Corp. Inc., a leading supplier of high-speed rotary and cryogenic machinery for process industries, Mike built global leadership experience with Altas CopCo, a multinational industrial company, where he held various leadership positions. In January 2009, Mike founded the new Pre-Engineered Buildings and Hot Rolled Structured Steel Group, headquartered in Jeddah, KSA with its own independent Board. Mike assumed overall accountability for the company, overseeing the Middle East. Mike joined ABB in August 2011 as Low Voltage Division Regional Manager for India, Middle East & Africa. In June 2014, he was promoted to Global Managing Director for the Building Products Business Unit prior to his 2018 appointment as Head of Global Markets for the Electrification business. Mike currently resides in Dubai and holds a Master’s degree in Mechanical Engineering from the University of Southern California (USC), U.S.

[1] https://www.rystadenergy.com/news/fossil-fuel-emissions-to-peak-within-two-years-as-global-decarbonization-picks-up

[2] Renewable energy will produce 35% of global electricity by 2025: IEA | World Economic Forum

[3] https://diversegy.com/energy-industry-trends-news-forecast-2025/

[4] https://www.iea.org/reports/electricity-2024/executive-summary

[5] Buildings - Energy System - IEA

[6] 68% of the world population projected to live in urban areas by 2050, says UN | UN DESA | United Nations Department of Economic and Social Affairs

[7] https://diversegy.com/energy-industry-trends-news-forecast-2025/

[8] Ageing and health

[9] The $8.5 Trillion Talent Shortage

[10] https://www.pwc.co.uk/services/sustainability-climate-change/insights/net-zero-economy-index.html

[11] Fossil fuel emissions to peak within two years

[12] Be Bold on Buildings at COP29 - World Green Building Council