Lobbying by Deutsche Gesellschaft für Nachhaltiges Bauen – DGNB e.V.

The EU Taxonomy provides a substantial tool for gaining insight into corporate investments by classifying turnover, capital expenditure, and operational expenditure, thereby also delivering critical insight into the sustainability aspects of debt-financed investments. However, first-movers are being penalized despite having invested significant effort in understanding and implementing regulations, adapting processes, and digitalizing their operations. For the calculation and practicability of the green asset ratio, we refer to the work done by the Sustainable Finance Advisory Committee of the Federal Government of Germany, available on their website. Via our close cooperation with GBCs across Europe, particularly in Denmark, Austria, Spain, Germany, France, Ireland, Hungary, and Croatia, we have gained significant insight in the application of technical screening criteria in the construction and real estate. The focus in further developing the significant contribution technical screening criteria should be on selecting methodologies and key performance indicators that align with the strategic goal of the environmental objective, i.e. for climate change mitigation the aim is to reduce the greenhouse gas emissions, consequently the reduction of greenhouse gas real performance of buildings should be evaluated, instead of utilizing EPCs, which are based on calculations and the primary energy demand of buildings. Furthermore, the regulation should give clear instructions on the proposed partial alignment concept, to avoid green washing claims. The implementation of Do No Significant Harm (DNSH) criteria has revealed methodological difficulties, especially the inflexibility of the methodologies. Simplification would be welcomed to reduce the complexity and reporting burden. The EU Commission can however consider alternative policy instruments to achieve the environmental objectives, i.e. reducing hazardous materials production and circulation, rather than mandating reporting on the topic by parties. In particular to the DNSH Pollution Criteria and the Appendix C, two options were proposed. We strongly recommend the implementation of option 2, replacing the paragraph with the amendment given in the Annex of this Document. In conclusion, Europe must chart a strategic path forward as a global leader in climate action. This requires a collaborative approach that goes beyond traditional regulatory frameworks. EU policy should actively work with diverse stakeholders across the real economy, financial sector, and civil society to comprehensively frame and assess the materiality of environmental objectives. Critically, small and medium-sized enterprises (SMEs) must be explicitly included in this development process, ensuring they are properly addressed and equipped to participate effectively. The goal is to develop a harmonized approach that reduces individual company reporting efforts while ensuring data points are strategically defined. These metrics must be capable of effectively steering transformation, aligned with overarching EU goals, and grounded in real performance measurements. By creating supportive mechanisms that simplify compliance for SMEs without diminishing their accountability, the EU can ensure these smaller businesses are not left behind in the sustainability transition. The ultimate objective is to create a robust regulatory environment that encourages meaningful sustainability efforts, rewards proactive approaches, and provides clear, implementable frameworks for businesses of all sizes in their journey towards a sustainable future. By maintaining this nuanced, inclusive, and collaborative approach, Europe can continue to drive meaningful progress in addressing the critical challenges of climate change and environmental sustainability.

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Response to Climate change mitigation and adaptation taxonomy

18 Dec 2020

DGNB is highly supportive of the Taxonomy principles. However, we are very concerned that the recently published technical screening criteria for construction might not find the desired uptake by the market if released in their current form, and that they are not in line with Paris-compliant targets. The basis of our feedback provided here is a market readiness study (see attachment) of the construction activities criteria as proposed by the TEG. DGNB initiated this study together with three other Green Building Councils. The consortium includes 24 financial market participants, representing different stakeholder groups directly impacted by the Taxonomy regulation: mortgage lenders, financial service institutions, real estate developers, insurance companies, investment funds, pension funds, institutional investors and valuation firms. 53 real case buildings were used to test the proposed criteria. As DGNB, we recommend the following: General: The ambitions for climate change mitigation need to be better aligned with Paris-compliant targets and therefore need to be increased. The financial market communicates its support for climate-neutral Europe by latest 2050. To fulfill their role they need clear regulatory signals which enable them to decarbonize all their business activities - on a fair and level playing field. In order to be prepared, clear and reliable transition roadmaps with high ambition towards net-zero whole life carbon need to be introduced. Transparent procedures for setting benchmarks need to be established on the basis of impact assessments. Existing standards and suitable building certifications, such as the DGNB system, must to be recognized as evidence from the start so that implementation tools are immediately available on the market. New Construction and Renovation: Define net-zero operational carbon emissions as target value for 2030 latest. As an alternative to the primary energy demand, also allow proof via GHG metrics, based on final energy metrics. Individual Measures: Ensure that eligibility of individual measures depends on existence of complete renovation or climate roadmaps to avoid future lock-in effects. Acquisition and Ownership: As an alternative to the primary energy demand, also allow proof via GHG metrics, coupled with final energy metric: change metrics to GHG emissions asap. To increase the impact of the Taxonomy, an additional “transition path” should be introduced, which makes the acquisition of “light green” buildings Taxonomy eligible, if an established Paris-compliant investment plan is applied. DNSH: Less rigid alternative evidence of achieving the defined targets have to be allowed, in order to reflect the availability of data to financial market participants at different project stages (e.g. evidence via tendering documents). A development path with statements on both extent & topics of the DNSH criteria and ambition should be included, to ensure that DNSH criteria do not undermine climate change mitigation and adaptation effort. More specific criteria for the climate adaptation objective need to be developed. A more detailed specification regarding the scope of the pollution prevention and control criterion, i.e. (more details: www.dgnb.de/dnsh-pollution): 1. Which “building components and materials” are referred to? - “Do not contain” is no applicable definition for SVHCs, introduce a limit value with clear references; 2. How is “contact with occupiers” defined? Via air, skin, ingestion, etc. Depending on the definition of the scope of “components and materials”, SVHCs are either subject to declaration or not. This makes it very vague and arbitrary, if SVHCs are declared or not, thus detected or not. Carcinogenic VOCs, other VOCs and formaldehyde emissions of products need further specifications in the test conditions. Alternatively, for formaldehyde and VOCs, the criteria could be approved by an adequate indoor air testing as an instrument of quality control.

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