Skanska EVP on Sustainability Trends in Construction

In addition to the usual challenges brought on by the need to stay competitive in an evolving market while staying committed to innovation, new points of concern arise for green building in 2025, driven by multiple factors, including changes inflicted by the new administration.  

How could shifts in building codes, policies and legislation impact the real estate industry’s decarbonization efforts? To what extent will sustainability trends be impacted by the newly imposed tariffs on basic construction materials? Steve Stouthamer, executive vice president of project planning services at Skanska, answers these questions and others in the interview below.

What has the real estate industry learned in 2024 about green building and decarbonization?

Stouthamer: In 2024, it became increasingly evident that sustainability is no longer a choice, but a fundamental requirement. The growing adoption of low-carbon materials and net-zero buildings has demonstrated that green construction is both technically feasible and economically viable.

One major takeaway is that carbon reduction strategies must be addressed early in the planning phase. This can be seamlessly incorporated into a more holistic design approach that does not necessarily increase costs but can provide healthier spaces and a more resilient product. Owners and developers are prioritizing whole-life carbon analysis to understand a project’s emissions throughout its lifecycle, from construction to delivery.

There is also growing demand for third-party certifications like LEED, WELL and Living Building Challenge, not only for environmental impact but also as a competitive advantage in the market.

Which trends will shape construction in 2025?

Stouthamer: Several trends will define construction in 2025. Cost and supply chain pressures remain a focus, as tariffs and inflation continue to impact material sourcing. The shortfall in construction labor, exacerbated by immigration policies, is also an important factor.

Sustainability trends in construction include growth in modular and prefabrication, as more projects are utilizing offsite construction to reduce costs and improve timelines. There is a heightened focus on building resilient infrastructure, with climate-driven design a priority, as flood-resistant and energy-resilient materials see increased demand. Sustainability trends are evolving in response to compliance with low-carbon materials, net-zero buildings and stricter ESG reporting.

How do you expect the current administration’s decisions to impact these efforts?

Stouthamer: The administration’s new policies could affect federal incentives for clean energy projects, potentially slow the adoption of building codes, and weaken mandates related to embodied carbon in construction materials. However, many markets and clients continue to push forward with their respective climate goals, meaning sustainability will remain a priority regardless of federal policy shifts. 

We also see many local municipalities and insurance underwriters grappling with the risks and opportunities of the expanding commercial mass timber market. Organizations like Skanska, with a presence in the E.U., will continue to push forward to meet their global legislation requirements.

How are the new tariffs on imports impacting development and sustainability trends?

Stouthamer: The tariffs on steel, aluminum and other materials have introduced new cost pressures, and we expect tariff policies to fluctuate throughout 2025. These require careful consideration by customers, developers, designers and contractors during the planning phase of projects.

While the U.S. could meet much of the industry’s demand, the tariffs will create cost impacts, and the goal for the industry is to mitigate those impacts. Our U.S. strategic supply chain will be working closely with project teams to evaluate the most economical sourcing options.

On the sustainability front, we continue to prioritize resilience, efficiency and health. For example, our focus on mass timber and low-carbon concrete remains strong, as these materials align with both long-term sustainability goals and are durable options that are beneficial from a community and occupant health perspective.  

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What specific construction materials have seen the most significant price increases due to the tariffs so far?

Stouthamer: Steel and aluminum will be among the hardest hit by the tariffs, with steel plate prices down significantly in 2024 but expected to rise again due to the new tariffs. Copper prices have also increased due to global supply shortages. Additionally, HVAC equipment and electrical gear, which rely heavily on imported components, are expected to continue experiencing price hikes and extended lead times.

Project budgets will feel the strain, but strategic procurement, early supplier engagement and material alternatives will be strategies implemented to manage these increases.

Have labor shortages amplified, are they compounding the challenges posed by the tariffs in the construction industry? 

Stouthamer: The industry is already facing a skilled labor gap, estimated between 250,000 and 500,000 workers, and tighter immigration policies could further exacerbate shortages. This leads to increased wages and longer project timelines. To address these challenges, industry players are investing in workforce development programs, expanding apprenticeships and integrating technology to optimize labor efficiency.

In all this context, what can you tell us about circularity, material reuse and mass timber solutions employed by Skanska in its projects?

Stouthamer: We actively incorporate material reuse strategies, such as deconstructing and repurposing materials from demolition sites. Many of our projects use recycled steel, reclaimed wood and repurposed concrete aggregates to minimize waste. 

In several markets across the U.S., we are engaged in helping to create more robust circularity programs in partnership with national leaders, key manufacturers and local collaborators. 

Mass timber is gaining traction as a viable alternative to traditional steel and concrete structures, driven by its lower carbon footprint and faster construction timelines. Developers and investors are showing greater interest, especially as jurisdictions update building codes to allow for taller timber structures.

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