When comparing the conference themes of the latest Belgian Realty fair with the previous edition, it’s noticeable that something has changed. In this latest edition, the topics “sustainable cities”, “resilient cities”, “the social impact of real estate”, “affordable housing” and “alternative financing” were widely covered. One might have expected a strong presence of the topic “health crisis” after a cancelled edition in 2020, it is however the ‘Proptech” and “ESG” (Environment, Social & Governance) themes that clearly stood out in the 2021 edition.
The energy efficiency of buildings had of course already been a regular topic in previous Realty editions. We now see the more general environmental, governance and social impact issues come forward, particularly in the context of the EU Green Deal and the EU taxonomy.
Why are these topics so relevant to the real estate investment industry these days?
Although greenhouse gases (GHC) from buildings account for 36% of the EU’s GHG emissions, only 1 % of real estate is renovated each year. To accelerate these improvement of the Real Estate park, the European Commission published its “renovation wave” strategy in October 2020. The goal of this strategy is to renovate 35-million buildings by 2030 while creating up to 160,000 additional green jobs.
This regulation aims to classify all financial products according to the typology established by the European Commission (EU taxonomy). This classification indicates how sustainable a product can be considered.
One of the direct obligations of this regulation is that each financial product (investment funds, asset managers, insurance products, etc.), is classified based on environmental, social and management (ESG) and/or sustainable considerations.
This classification distinguishes between these different products:
“Article 8” These are products that promote environmental and/or social characteristics
“Article 9” These are products whose objectives are specifically environmental and/or social
“Other” This means financial products that do not meet the conditions of “Article 8” or “Article 9” products
Only Article 9 of the regulation refers to the term “sustainable” investments.
There is no doubt that this regulation represents a major step forward in terms of transparency and readability of the positive environmental, social and management impacts that investment products can have. This development is essential to achieving the goals of the EU Green Deal.
It is an ongoing transformation that is being felt in the financial sector, and by extension in the real estate sector.
Are you concerned about the SFDR regulation or want to integrate ESG aspects into your investment choices or into your company’s overall strategy?
TAUW is your partner to support you with your considerations, in preparing your reporting requirements and in determining how to align your investment activities and products with the EU Taxonomy.
Don't hesitate to contact Inge Brusten if you have more questions about ESG.
Email: inge.brusten@tauw.com
T: +32 471 98 28 841
