CTPVF - Real Estate Taxonomy Disclosures: Mind The Gap
2024-06-11 12:45:00 ET
Summary
- The real estate sector finds itself in a competitive position when it comes to both alignment levels and eligibility for Turnover, CapEx and OpEx compared to most other sectors.
- Narrowing the gap between the two isn’t going to be entirely straightforward – and this may prove to be just one of a few challenges the sector could be facing.
- Real estate companies with low alignment levels may face more difficulty in terms of financing or investments in the future if there is limited capacity or willingness to improve alignment scores.
A brief overview
The EU Taxonomy took effect in 2020 as part of the EU’s Green Deal to reach climate neutrality by 2050. The EU Taxonomy Regulation introduced a detailed classification system to define environmentally sustainable economic activities with the aim of channelling private and public investments into these activities. Its aim is also to standardise economic activities that can be considered environmentally sustainable and improve transparency for companies, investors, and policymakers.
The regulation requires non-financial companies to disclose one or more of the following:
- EU Taxonomy-aligned share of turnover.
- Capital expenditure ( CapEx ) aligned with the taxonomy.
- Operating Expenses ( OpEx ) aligned with the taxonomy.