Sustainable Finance

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Sustainable Finance is a crucial tool to support the finance industry in reorienting capital flows and investment towards achieving global sustainability goals. Green Building Councils (GBCs) around the world have been at the forefront of catalysing sustainable finance for many years at a local, regional and global level.

To support this movement, WorldGBC has launched the Sustainable Finance Taskforce, which will amplify and build upon the work carried out by our network in order to strategically convene the finance community and built environmental professionals, as well as leverage our influence to drive the sustainability agenda across the real estate industry.

Real estate is a major asset class accounting for two-thirds of global real assets and is at risk from both physical and transition risks. At the same time the built environment has a significant impact on our planet accounting for 37% of energy related emissions, generating approximately 100 billion tonnes of construction, renovation and demolition waste every year, and being responsible for a significant share of extracted materials and global water consumption.Tackling and drastically reducing both the risks to built assets and their impact on our planet requires large-scale transformation, backed by the upscaling of investments and funding options.

GBCs have been at the forefront of sustainable finance for many years, using tools such as green building certifications which many GBCs operate. These have become a de-facto gold standard for many sustainable investments.

WorldGBC has leveraged this pioneering work, shaped and defined green mortgage standards, influenced the recommendations of the first Technical Expert Group (TEG) on climate mitigation criteria for the EU Taxonomy, and subsequently steered the definition of technical screening criteria for the building sector in the EU Platform on Sustainable Finance.

Our recognised expertise in sustainable finance comes from decades of experience in both defining the environmental performance standards for buildings and infrastructure, as well as through GBC certification schemes and our network’s role as a catalyst for political and industry action to champion sustainable buildings through advocacy, training and awareness raising.

WorldGBC’s Sustainable Finance Taskforce comprises GBCs from around the world alongside our corporate partners. Its objectives are:

1 Strategise 2 Connect 3 Convene

Exchange on global, regional and local sustainable finance developments, opportunities and risks.

Lead strategic discussions on how to proactively address the finance sector, calling for and working towards alignment across different frameworks, metrics and targets.

Connect the finance and built environment sectors.

Foster a collaborative and direct exchange between all stakeholder types across the built environment supply chain including financial actors.

Scope areas of work that would benefit from collaborative efforts and require an in-depth exchange, as well as convene individuals with technical expertise in Working Groups.

In a wave of sustainable finance policy reform, the European Commission released the EU Taxonomy, defining sustainable economic activities to tackle greenwashing in financial and corporate reporting.

The EU Taxonomy Working Group supports the development of the sustainability criteria for the built environment and facilitates the implementation of the EU Taxonomy. Specifically it aims to:

1 Build capacity 2 Build consensus 3 Build influence

Provide simple introductory guidance on the EU Taxonomy.

Ensure the EU Taxonomy and future taxonomies in other regions are fit for purpose for the built environment.

Convene key stakeholders to agree on national interpretation of Taxonomy regulation.

Form a group of relevant sector experts, from across the value chain, that will help advise and shape WorldGBC positions related to the development of the EU Taxonomy and similar frameworks.

Ensure WorldGBC’s position continues to shape the evolution of the Taxonomy.

Strengthen WorldGBC’s position of leadership on sustainable finance policy.

Ensure that the criteria relevant for buildings and the construction supply chain are:

Aligned with WorldGBC’s global North star goals for climate, health and resources
Practically implementable and understood by the industry.

Showcased at our webinar ‘Implementing EU Taxonomy across the European built environment’ on 12 October 2023, hosted in partnership with EPRA (European Public Real Estate Association), the factsheets focus on the key energy efficiency criteria:

Nearly Zero Energy Building (NZEB): The EU Taxonomy criterion ‘NZEB – 10%’ can pose challenges to comply with. Here we map the national NZEB standards and propose recommendations to enhance usability of the EU Taxonomy.
Major Renovations: We map how European countries have implemented the term and highlight key implementation challenges, as well as make proposals to address them.
Energy Performance Certificates (EPC): We shed light on national EPC schemes, highlight how EPC methodologies can vary across Europe and recommend two ways to move forward.

WorldGBC’s activities on the EU Taxonomy build on European GBCs ongoing work to align green building certification to the EU Taxonomy, provide third-party verification, convene national working groups (e.g. in Finland, France, Ireland, Italy or the Netherlands) and offer a wide range of resources to facilitate the implementation of the EU Taxonomy.

1 1. Resources 2 2. EU Taxonomy-aligned certification

1. Resources

Europe:

EU Taxonomy Study – Evaluating the market-readiness of the EU Taxonomy criteria for buildings (DGNB, DGBC, RFBB, ÖGNI, SGNI, GBCe, 2021): The paper reveals that the property market needs to prepare itself for the implementation of the EU Taxonomy but that current barriers include a lack of information to report alignment and a lack of harmonised interpretation of the criteria. The paper proposed a set of actionable recommendations for the EU Commission and market participants.

Circular Economy Taxonomy Study – Assessing the market-readiness of the proposed Circular Economy (DGNB, DGBC, RFBB, ÖGNI, SGNI, GBCe. 2023): An evaluation of 38 real construction projects in 10 countries shows that the market is not yet operational align to EU Taxonomy circular economy criteria, among other, due the difficulty to date to reuse building components and a lack of circular products on the market.

The value of architecture in the context of the EU taxonomy (CPEA and the Architects’ Council of Europe, 2021): Based on a life cycle analysis, it explores the role architects can have to align projects to the EU Taxonomy in the development phase already and demonstrates value generation for investors, owners and users at a glance.

Finland:

Frequently asked questions about the EU taxonomy (GBCFI, 2023): The Green Building Council Finland compiles up-to-date criteria for the construction and real estate industry and related explanations and interpretations for the Finnish real estate market on its website. For example, Green Building Council Finland’s Real Estate Committee compiled a Frequently Asked Questions document.

France

European Taxonomy applied to commercial real estate – What is it, and what are the requirements? How can HQE certifications help meet these requirements? (CERTIVEA, 2023): The report decrypts EU Taxonomy requirements and impacts on the French commercial real estate sector and highlights mapped elements between the EU taxonomy and the HQE certification scheme.

Hungary:

EU Taxonomy for real estate in Hungary – The Hungary GBC developed a detailed guidance for assessing conformity with the EU Taxonomy climate mitigation criteria for real estate in Hungary. The guidance is endorsed and distributed by the Hungarian National Bank for financial institutions to consider in real estate transactions and reporting. HUGBC provides a training programme based on the guidance.

Italy:

Private and public finance for the decarbonisation of the building sector (La finanza private e pubblica per la decarbonizzazione del settore edilizio) (GBCItalia, 2023): As part of the Italian decarbonisation roadmap (Decarbonizzare il ciclo di vita dell’ambiente costruito) GBCItalia, explored financial instruments to finance the transition to a decarbonised built environment.

Ireland:

Reporting on the EU Taxonomy in Ireland (IGBC, forthcoming): The draft paper currently under review by the Irish EU Taxonomy working group explores required evidence to demonstrate EU taxonomy alignment in Ireland. Feedback received on this draft is currently being analysed before the final document is published before the end of 2023.

Netherlands:

EU Taxonomy guidance:
DGBC published a guidance that aims for a common interpretation and application of the EU Taxonomy in the construction and real estate industry in The Netherlands. The guidance highlights how the EU Taxonomy criteria relates to the Dutch real estate and construction regulations, standards and methods.
Overview EU regulations
The number of EU regulations as part of the EU Green Deal can be overwhelming. DGBC published an EU Regulation overview that informs on current or future EU regulations that will change the Dutch real estate and building sector.
More DGBC’s publications around the EU Taxonomy are available at: https://www.dgbc.nl/tools/eu-taxonomie-19.

Norway:

The Norwegian GBC offers a three-hour course on the EU Taxonomy as of August 2023. It covers a general introduction of the EU Taxonomy criteria, their implications for the Norwegian real estate sector and explores reporting on these criteria. All publications on the EU Taxonomy are available at: http://bit.ly/EU-Taxonomy_Byggalliansen.

Spain:

GBCe hosts an EU Taxonomy portal for the Taxonomy verification of single buildings and/or building portfolios.
GBCe has also launched a training programme to generate and/or improve experts’ capacity on the subject, mainly aimed at VERDE Accredited Evaluators and DGNB System ES consultants and auditors. The programme portal includes a list of experts as well as general information on EU Taxonomy verification and certification to enhance capacities and transparency amongst the finance, real estate and built environment sectors.

Sweden:

The Sweden GBC offers an introductory course three-hours long as of March 2023. It covers a general introduction of the EU Taxonomy criteria, their implications for the Sweden real estate sector and explores connection to certification schemes that we administer.

2. EU Taxonomy-aligned certification

Increasingly, GBCs run third-party certification services of EU taxonomy-aligned green buildings, accepted by financial institutions and.

Austria:

The Austrian Sustainable Building Council (ÖGNI) runs the DGNB certification in Austria and has also adopted the DGNB ESG verification service – it has performed about 800 “EU Taxo Checks” as of August 2023.

Germany:

German Sustainable Building Council (DGNB) has developed an “ESG verification” of the environmental criteria of the EU Taxonomy and its minimum social safeguards for new construction, refurbishment, acquisition and ownership of buildings. The assessment can be carried out both in parallel with and independently of DGNB certification.

Hungary:

Hungary Green Building Council (HUGBC) offers third party verification of conformity with EU Taxonomy climate mitigation criteria for buildings in Hungary. HUGBC has trained and accredited verifiers and manages the registration of verified buildings. Verification is a requirement for certain green financing instruments supported by the Hungarian National Bank.

Netherlands:

DGBC has adapted the BRREAM certification scheme to the Dutch market and BREEAM NL In-Use v.6.0 is aligned to the EU Taxonomy. An EU Taxonomy report is provided in every BREEAM-NL In-Use V6 certification for both residential and commercial buildings.

The BREEAM-NL and EU Taxonomy comparison shows in more detail how the newest BREEAM-NL technical manuals relate to the EU Taxonomy.

Norway:

In Norway BREEAM NOR New Construction v.6.0 is aligned to the requirements of the EU Taxonomy.

Italy:

GBCItalia has aligned the Italian “LEEDS protocols for reporting purposes” to the European Taxonomy for new construction and renovation (REV 0–2022).

France:

France’s HQE certification for commercial buildings run by CERTIVEA now includes tools for a EU Taxonomy alignment self-assessment for which third-party verification is available. Certivea also issues “certificate of engagement” in the planning phase of a project, which provides supporting evidence for financial institutions to demonstrate eligibility and alignment to the EU Taxonomy (e.g. Article 9 funds).

Ireland:

The Irish Home Performance Index is aligned with the EU Taxonomy and tailored to the Irish residential sector, with worldwide recognition for example by GRESB or the WELL building institute.

Spain:

VERDE and DGNB System ES are aligned with the European Taxonomy facilitating EU Taxonomy evaluation and verification of buildings. VERDE will cover all EU Taxonomy requirements as of January 2024.

Sweden:

Sweden Green Building Council aligned all certification schemes to the requirements of the EU Taxonomy: Miljöbyggnad iDrift 2.0, Miljöbyggnad 4.0, Citylab 4.0, Greenbuilding 8.0, BREEAM-SE New Construction v6.0 and NollCO2 1.1.

Financial actors looking to green their portfolios seek voluntary reporting frameworks and data to comply with environmental objectives. As a result top-down ESG reporting frameworks, including those in the real estate market, have proliferated.

The ESG Reporting Working Group seeks to drive alignment of top-down frameworks with local contexts building on GBCs’ deep understanding of local markets, environmental conditions and policy frameworks. Specifically it aims to:

1 Thought leadership on ESG frameworks 2 Foster alignment on ESG reporting

Forge a common voice

GBC’s have a global voice on sustainable finance that can help communicate with global bodies.

ESG Working Group acts as a focal point for investors and entities.

Inform the market

Investors can reach out to obtain information about the principles that should drive net zero strategies globally, the relevance of rating tools and how the WorldGBC network can help investors with their ESG reporting.

Enhance alignment between rating tools

Support GBCs’ efforts to align rating tools globally and enhance comparability between national tools and relevant international frameworks for sustainability and ESG reporting.

Build capacities amongst GBCs to drive change.