The EU taxonomy is a regulation of the European Union (EU) that came into force in 2020 and defines the requirements for a wide variety of financial products. Accordingly, not only banks and other financial institutions have to adhere to them – the real estate industry must also follow the new rules.
The German Society for Sustainable Building (DGNB), the Green Building Council España (GBCe), the Green Building Council Denmark (DK-GBC) and the Austrian Society for Sustainable Real Estate Management (ÖGNI) collected data last year and have now published a study . It was investigated how well the real estate industry can implement the criteria of the taxonomy with how much effort, what still needs to be worked on and what potential the taxonomy has in the real estate industry.
EU taxonomy: reporting on the environmental friendliness of financial products
The study authors worked with the first version of the taxonomy from March 2020. Like the new version, this includes an obligation for all companies with financial products to report on the extent to which the product or property follows the taxonomy. The report must be openly accessible so that potential customers or investors can view it and use it to make a purchase decision. As early as this year, the criteria in the areas of climate protection and adaptation to climate change must be reported. The four other criteria of protection of water and marine resources, transition to a circular economy, avoidance of environmental pollution and protection and restoration of ecosystems will not be added until the end of next year.
Only one study participant is fully taxonomy-compliant
23 companies with a total of 62 construction projects and properties from the categories “acquisition and ownership”, “new buildings” and “renovations” took part in the study – but only one of the projects was able to demonstrate full taxonomy conformity for all criteria. Less than 15 percent of the buildings in the “Acquisition and Ownership” category were largely able to meet the taxonomy requirements, while it was a little more than half of the new buildings.
The study shows: The real estate industry has a problem with data collection
The biggest problem for the project developers, pension funds and asset managers who took part in the study with their buildings and projects is apparently with the data acquisition and evaluation: Some projects only required two hours to process the assessment, others a full 25 hours.
The data gap was greatest for those with residential buildings or particularly large properties. In her press release on the study, DGNB managing director Christine Lemaitre quotes that even the most motivated participants had difficulties implementing the taxonomy. However, it is interesting that buildings that were already certified were able to proceed faster in terms of data collection and disclosure than those that were not yet able to produce a certificate. According to the DGNB, Carl Backstrand from ACE Denmark says: “Using real case studies, the study once again underlines what we have been expecting for a long time: The construction industry has a problem and the need to improve data collection and ensure higher data security.”
According to the authors of the study, the regulation should be expanded
Lemaitre also states that all buildings performed worst on the criterion of adaptation to climate change: “If the impression arises that the [Klima-]If the requirements are not met anyway, there is also a lack of motivation to even set out to make it. ” In their own letter, which was published at the end of last year, the study authors recommend that the EU Commission introduce a transparent procedure for introducing the standards and, in particular, standardize the data: All in all, more help for the real estate industry.
The results of the study are likely to be rather sobering for climate protectors – even though, according to a study by EY Real Estate, at least real estate funds see themselves as being much better prepared for the criteria of the EU taxonomy than for the disclosure regulation that came into force on March 10th.
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