It is becoming increasingly clear that sustainable development is not just a trend, but a new way of thinking about business. We can see this in the ThinkCo report “Responsible Investments. ESG on the real estate market”, which is the most up-to-date compendium of knowledge on sustainable development in real estate. The multitude of regulations, concepts, and novelties can be overwhelming. However, it does not exempt us from having to adapt to the increasingly clearly articulated requirements of the environment. Those who manage to do so will remain competitive in the new reality, says Przemysław Chimczak-Bratkowski, partner at ThinkCo.
The report “Responsible Investments. ESG on the real estate market” prepared by the consultancy company ThinkCo, collects in one place the most important information from the point of view of environmentally and socially responsible investments. It explains what sustainable development means, what motivates it, what we struggle with, and which solutions can enable meeting the expectations of the environment. It also explains legal regulations, describes certifications and gives examples of green technologies and inspiration from Poland and the world.
The road to net-zero
The focus on the industry is primarily due to the environmental impact of its business activity. Construction is the most material-consuming sector of the economy and consumes over 50% of the world's steel production. The sector is also responsible for 30% of global greenhouse gas emissions and consumes about 40% of total energy. This is also due to the environmental costs of operating facilities - nearly 75% of buildings in Europe show low energy efficiency.
At Skanska, we are actively working to reduce our carbon footprint as part of our ambitious climate goals of achieving carbon neutrality in 2045. As the largest office developer in Europe, we consciously and consistently implement innovations that will help reduce CO2 emissions, not only when the buildings we develop are used, but also during their construction, comments Jacob Møller-Nielsen, Executive Vice President Center of Excellence at Skanska’s commercial development business unit in CEE.
Society welcomes sustainable development
Companies think they are perceived as much more sustainable than is actually the case, with 65% of organizations saying that their clients are highly aware of their environmental and social initiatives. The reality, however, is much worse, with 49% of consumers saying they cannot verify the sustainability claims made by companies regarding their products, and 44% do not believe these claims. At the same time, sustainable practices are perceived as desired by tenants, clients, and employees in all segments of the real estate market.
ESG, i.e. growing business pressure
As the authors of the report note, the need for a comprehensive approach to sustainable development is reflected in the popularity of the ESG (Environmental, Social, and Governance) concept in business. According to a study by the Association of Investment Companies, 40% of investment advisers believe that ESG-focused projects lead to higher returns. The same opinion was expressed by 5% of fund managers in the Research in Finance survey and approx. 40% of investors in the Deutsche Bank Research survey.
New regulations: EU taxonomy
The report strongly focuses on legal regulations, which have seen increasingly precise and detailed provisions in recent years. A tool that will affect the activities of many industries starting this year is the EU taxonomy. It is to ensure uniform terminology in reporting and prevent the phenomenon of greenwashing by introducing unambiguous criteria to assess whether a given activity is environmentally sustainable - and thus, the financing of which of them is more secure in the long term.
Investors must take into account that the results of taxonomic reports will form the basis of the investment risk assessment. It is estimated that starting in 2022 over 5,000 companies will be required to report and from 2026 - over 50,000. What’s important, the taxonomic obligation rests not only with companies registered in the European Union (EU), but with all organizations that want to operate within the EU borders.
This year will see the launch of the so-called green taxonomy, dedicated to six environmental goals. At the same time, it is planned to create a "brown taxonomy" that will focus on activities negatively affecting the implementation of the EU climate goals. Work on the "social taxonomy" has also started, and ultimately all these studies will create a single taxonomy tool that will fully relate to ESG aspects.
The full version of the report “Responsible Investments. ESG on the real estate market" can be downloaded at https://thinkco.pl
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Partner at ThinkCo
ThinkCo is an independent consultancy institution specializing in changes taking place in the real estate market. It helps improve old and implement new business solutions by creating comprehensive strategies, standards, and guidelines, as well as selecting appropriate communication methods. It also carries out research, publishing, and image-building activities, focusing on the needs of the changing market and society.
JW + A is a team of experts in the field of green construction, specializing in the LEED and BREEAM certification of new and existing buildings, specialist analyses, and consultancy in the design, implementation, and use of investments. In 2021, the company completed 84 LEED, BREEAM, and WELL certifications in Poland and Central and Eastern Europe, which translated into over 1,000,000 sq m of certified space.
Panattoni is a subsidiary of Panattoni Development Company, one of the largest developers of industrial space in the world, with 26 offices in North America and Europe. Panattoni has been present on the Old Continent since 2005, where it can boast projects with a total area of over 14 million sq m, of which more than half have passed environmental certification in selected BREEMA, LEED, or DGNB systems.
Skanska is an innovative developer of green, futureproof office buildings. Skanska's office projects are certified in the LEED, WELL Core & Shell, and WELL Health-Safety Rating systems. In addition, Skanska's new investments hold the "Building without Barriers" certificate. Skanska has been operating the office development business in Poland since 1997 with presence in Warsaw, Wrocław, Poznań, Łódź, Kraków, Katowice, and the Tri-City.
Torus is a development company from Gdańsk. During its 20 years of operation, it has provided over 16,000 sq m of modern office space, although its portfolio also includes hotel and warehouse investments. Ecology, social responsibility, education - these are the three pillars of CSR deeply rooted in the business strategy of Torus. They are visible in the company’s products as well as in many business-related activities.