EU Commission launches Proposal for Environmental Delegated Act—what does that mean for real estate?

Sustainability/ESG is currently the biggest buzzword in the real estate industry, especially for environmental objectives. This is also due to the notably higher standards under hard law, and the additional requirements—for example, regarding classification of sustainable activities, reporting, disclosure and benchmarking under the EU sustainable finance regulations. There has been an increase in green bonds, as well as an increase in companies signing up to monitor the carbon footprint, for example the Carbon Risk Real Estate Monitor (CRREM).   

The real estate industry has been focusing quite intensely on the EU Taxonomy, especially the technical screening criteria under climate-delegated acts. This has not just been for reporting or disclosure, but the technical screening criteria (TSC) are also being integrated into standards for building certification, for due diligence of real estate, for assessing the stranding date as well as for contract drafting.

The focus has been on climate goals, especially climate change mitigation. This seems to be in large part due to the fact that the technical screening criteria under the EU taxonomy existed for climate objectives. Recently, the EU Commission launched a proposal for an Environmental Delegated Act with technical screening criteria (TSC) for non-climate related environmental objectives.