According to Colliers EUR 7 trillion may be needed to retrofit buildings in Europe to comply with emerging environmental social and corporate governance requirements.
“ESG is no longer an option, it’s a ‘must have’”- as Colliers writes summarizing the findings of its report on the deployment of new regulations in Europe concerning the treatment of environmental, social and governance (ESG) factors in investment and corporate decision-making.
According to the ‘ESG: A Tipping Point’ report, there has still not one set of reporting frameworks been accepted worldwide as a benchmark for ESG performance, making it very challenging for real estate investors to predict future requirements and liabilities.
Colliers points to an urgent need for policymakers to agree on pragmatic, actionable targets that will support the creation of clear, consistent technical standards and benchmarks enabling the reallocation of both capital and skills as investors rush to factor new ESG realities into decision-making.
„The challenge at the moment is to understand what, exactly, needs to be done to calibrate property portfolios with the incoming requirements for decarbonisation in particular”
– Eurobuild CEE quotes Luke Dawson, managing director for cross border capital markets, EMEA at Colliers.
The report notes that emerging regulations such as the EU’s Corporate Sustainability Reporting Directive (CSRD), are poised to provide both greater clarity and new challenges.
The CSRD is expected to come into force in 2023 and nearly all commercial real estate companies will be expected to comply with it. The adjustments required as disclosure metrics and reporting frameworks are standardized in the next couple of years will lead to a potential slowdown in transactions as investors come to terms with new norms – highlights Eurobuild CEE.