Back EU Taxonomy for Sustainable Economic Activities

On January 01st, 2022, the EU taxonomy regulation for ESG regulation came into force. This set of rules is intended to make the sustainability of investments measurable and counteract the increasing negative consequences of climate change. The climate goals of the EU are clearly defined: by 2050 the EU should be completely emission-free.

The Taxonomy Ordinance now specifies specific criteria for the assessment of achieving sustainable investing in real estate. There are still a few unanswered questions about the interpretation of the regulations, and further legal acts will follow.

  • How much will the future influence of the taxonomy, as the definition of ESG guidelines, increase on future investments? At the moment, there is still little sign of this in the tight regional real estate market, although goals such as climate protection and adaptation to climate change have been in effect since the beginning of this year.
  • With regard to future investments - in connection with the current situation on the raw materials market - the question arises as to whether it will be possible to bring the renovation objects into line with the energy efficiency level of class E.
  • Under the current circumstances, it can be assumed that the prescribed measures to achieve a certain taxonomy quota will in future lead to greater differentiation between individual buildings. For example, monument protection objects must be more differentiated.
  • In view of the high requirements for achieving a good taxonomy quota, the question arises as to whether official control will not be absolutely necessary. Or whether, from a different point of view, the regulation of the financial market or financial influences on sales prices or financing will be sufficient. This requires great trust in the environmental awareness of the owners.
  • Incentives to make owners more aware of these environmental concerns could at least be the certification of such a taxonomy conformity. However, there is currently no possibility of certification. From our point of view, this must be improved in the near future. Existing certifications should also play a role.
  • It is positive to note that there is currently no way of compensating for the hard criteria of taxonomy conformity. Even by planting trees, it would not be possible to increase the quota. Because that would soften the goals. A good example of this is the GHG quota for electromobility. To put it simply: companies can buy the non-caused pollutant emissions from, for example, private electric car owners. This weakens the policy for companies to comply with pollution limits. The climate protection measures are thus inhibited.
  • We find it remarkable that taxonomy conformity can only be achieved if the primary energy requirement is reduced by more than 30%. However, a good taxonomy rate can probably only be expected with an energy efficiency class A.

You can read more about the topic here:


Photo: unsplash

by Dagmar Klemig
25 / April / 2022
Energy, ESG regulation, MWW, Taxonomy

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