In the wake of the COVID-19 pandemic, with politicians focusing on managing its impact and facilitating an economic recovery, an emerging European policy framework is set to have a dramatic impact on how the real estate sector operates. With the climate crisis driving public concern, how we build, invest and manage all aspects of the built environment is set to change.
Brussels is seeking ambitious new targets leading up to 2030, and beyond to 2050, and for the first time the EU is turning its spotlight on a sector that consumes more energy and emits more GHG emissions than any other. Emerging European regulation seeking to address this will have a dramatic impact. However, our research indicates that the sector is failing to get sufficiently engaged. To adapt and prepare for the future, manage the risk and identify new commercial opportunities, real estate businesses must get involved. In this paper, we outline the EU’s proposed legislative programme and highlight what companies should be doing.
Why is the EU spotlight on real estate?
Europe has been quietly nurturing a global role as a regulatory powerhouse and an international standard bearer for good practice, for regulators around the world. On climate change, the EU has been a firm supporter of the Paris agreement and its first Climate Law, introduced in March 2021, sets a pathway for Europe to be the first climate neutral continent by 2050. The European institutions are taking a firm leadership role in a swathe of environmental and social issues that have become front and centre. Whether you do business in Europe or not, what happens in Brussels is more likely to impact business elsewhere than ever before. Companies are advised to pay close attention. The EU Green Deal (December 2019) is a growth strategy to ‘build back better’ and is an umbrella initiative driving policy change. Real estate is now a political priority with policymakers targeting massive investment in a ‘Renovation Wave’5, as well as an ambitious legislative programme on buildings and construction, including on ESG and sustainability issues. The sector has been slow to respond,
grappling with the dramatic consequences of the COVID-19 pandemic. How prepared is it for the challenges and opportunities ahead?
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Authors: Marcus Pepperell & Raphaël Büchel are based in the FTI Consulting Brussels office.