ESG Real Estate Insights 2022

#1 Real estate’s need for regulatory compliance with ESG goals

In the last years, regulations with regards to ESG such as the SFDR and Taxonomy regulation have shaped the real estate industry, says our ESG specialist from Luxembourg Dario Zambotti.

Looking forward, we see that this development will continue: One year after the effective date of SFDR, the classification of real estate funds based on their ESG characteristics and ESG objectives (article 8, article 9 funds) is a challenge the industry is facing today. Other challenges are SFDR and Taxonomy disclosure requirements as well as data management and use.

However, every item to tackle today is also an another important step in the ESG transformation journey.

#2 EU taxonomy: towards alignment

Now that large real estate companies have released their non-financial statements including the reporting on EU taxonomy, the focus is shifting towards alignment.

In this article we give an overview of the principle challenges the real estate industry is facing to prepare the reporting on alignment for the next years. This includes a physical risk analysis, a review of the IT tools and the impacts of this new regulation on the strategies of asset managers and developers.

#3 ESG: The valuer’s moment has arrived

It is an exciting time to be a real estate valuer. With the ESG agenda having taken center stage across virtually every facet of both business and daily life, it is beyond doubt that valuers can – and must – play an important role in enabling and effecting change. To date, pointing the finger at valuers in the quest to see ESG aspects recognized “in the numbers”, has been rightly responded to that their core role is as a “score-keeper” rather than a “score- maker”. In other words they’ve had neither the mandate nor the tools to oblige. However, with regulations and legislation across all jurisdictions and industries evolving to drive improved ESG standards and enhanced expectations in terms of transparent reporting of performance and risk exposure, the role of the valuer is now central to the ESG agenda.

#4 Get your real estate data straight, the CSRD is coming

Effective ESG data management is essential for complying with the Corporate Sustainability Reporting Directive (CSRD). This article discusses three key perspectives to develop sound ESG data management necessary for creating an ESG report that meets the CSRD requirements. 

#5 Science Based Targets initiative (SBTi): Decarbonizing real estate in line with climate science

Each year, an increasing number of companies consider the impact that their offices, warehouses, and other premises have on the environment – therefore, they evermore require their buildings to have minimal or zero carbon footprint. This trend, combined with stakeholders’ demand for addressing environmental issues and considerable risk of physical damage caused by climate change, puts pressure on realtors to decarbonize their ventures. As a result, Real Estate’s interest in science-based targets is growing rapidly: during the last two years the number of companies engaged in the SBTi nearly quadrupled. There’s good rationale for that – joining SBTi and actively working on reaching decarbonization targets makes the future of the business sounder and safer, both through keeping up with customers’ expectations and by curbing climate change and its effects. 

#6 Carbon Accounting

On the way to carbon neutrality the carbon footprint is one of the first issue to address for the real estate industry.

Our ESG specialist Agustín Manzano explains the main steps on the way to the transformation to a Net-Zero economy. Undoubtedly, the time for the real estate industry to establish carbon accounting within the company is now.

#7 Digital ESG Assessment for Real Estate

To achieve the targets of the Paris Climate Agreement (PCA) and reduce the carbon emissions in the real estate sector, it is essential to consider ESG criteria in real estate developments as well as in portfolio and asset management. The first step is to create transparency of consumption data in real estate projects or portfolios as well as an compliance assessment with regulatory requirements (e.g.: EU Taxonomy, CSRD, etc.), internally defined ESG targets and further ESG criteria. We provide support with our Digital ESG Assessment for Real Estate and accompany your way towards identifying and implementing specific measures designed to reduce the carbon footprint of your real estate.