Royal Institution of Chartered Surveyors
RICS
With the property market accounting for as much as 20% of the Gross National Product in most countries, it is important to ensure that the sector is properly regulated.
ID: 12309911354-39
Lobbying Activity
Response to European Sustainability Reporting Standards
7 Jul 2023
The Royal Institution of Chartered Surveyors (RICS) is a global professional body promoting and enforcing high international standards in land, real estate, construction, and infrastructure. RICS is empowering surveyors to embed sustainability considerations into the way they work and better measure environmental impacts. Please find attached our feedback.
Read full responseResponse to Revision of the Energy Performance of Buildings Directive 2010/31/EU
30 Mar 2022
Please find here attached RICS feedback on the revision of the Energy Performance of Buildings Directive COM(2021)802.
Read full response18 Feb 2022
The CRR Prudent Property Valuation Approach
The Royal Institution of Chartered Surveyors (RICS) have over 134,000 highly qualified trainees and professionals, many operating globally as property valuers and appraisers. Through our respected global standards, leading professional progression and our trusted data and insight, we promote and enforce the highest professional standards in the valuation, development and management of land, real estate, construction and infrastructure in the public interest.
The subsequent comments address the new prudent property valuation approach enshrined in the proposed CRR amendment (Article 229). This approach was developed by the BCBS within its new Basel III Framework.
RICS were keen to understand the practical implications and potential impact of the proposed introduction of a requirement to report a prudent value across EU members states for secured lending purposes through the CRR amendment. To this end, RICS joined the International Valuation Council (IVSC) and the Association of European Valuers (TEGOVA) in supporting the independent research report by Prof. Neil Crosby (University of Reading) and Prof. em. Aart Hordijk (Tilburg University) entitled ‘Approaches for Prudent Property Valuations Across Europe’. The report focuses on the practical advantages and challenges to the introduction of the prudent value concept. A copy of the report is attached hereto.
The research examines concepts and definitions and possible methods for assessing prudent value and illustrates how difficult it would be to implement a harmonised prudent value approach across Europe, or indeed globally. It particularly highlights the need to develop a framework of long-term data sources to ensure that there is a consistent application of the prudent value concept across member states. The report also recommends that until this framework of data sources is developed, Market Value, as recognized by the current CRR, is maintained to avoid unintended consequences that could lead to financial instability.
RICS would welcome the opportunity to engage with the appropriate authorities to explore the practical challenges identified in the research.
Read full responseResponse to Climate change mitigation and adaptation taxonomy
14 Dec 2020
RICS proposes three areas of amendment:
1) Introduction of reference to IPMS for the measurement of floor area
2) Change of mitigation criterion applied to the acquisition and ownership of buildings built before 31 December 2020
3) Clarification on which expenses and assets are eligible
1. Introduction of reference to IPMS for the measurement of floor area
Floor area is not measured consistently across markets. Diverse boundaries of measurement can produce differences in floor area up to 24%. To ensure that property assets are measured in a consistent way, increasing transparency, public trust, investor confidence, and market stability, RICS strongly recommend referring to International Property Measurement Standards (IPMS), which is also referenced in Level(s).
More specifically, RICS recommend that the 5000m2 threshold introduced in the criteria for new constructions refer to the IPMS2 boundary of measurement, which is broadly equivalent to the reference area defined in EN ISO 52000-1, i.e. a measurement of the net internal area inclusive of shared circulation areas that are within the thermal envelope. IPMS currently covers residential, office, retail and industrial buildings, but the new edition of the standard (currently in consultation) will cover all building asset classes.
Proposed wording for Annex I - Section 7. CONSTRUCTION AND REAL ESTATE ACTIVITIES
Footnote 513 – The floor area buildings should be measured according to the IPMS2 standard (excluding balconies) as defined in the International Property Measurement Standards. […]
Footnote 515 – The floor area buildings should be measured according to the IPMS2 standard (excluding balconies) as defined in the International Property Measurement Standards. […]
Footnote 516 - The GWP is communicated as a numeric indicator for each life cycle stage expressed as kgCO2e/m2 (the floor area of buildings should be measured according to the IPMS2 standard, excluding balconies, as defined in the International Property Measurement Standards) […]
2. Change of mitigation criterion applied to the acquisition and ownership of buildings built before 31 December 2020
The benefit of using EPC ratings as thresholds is that they can be easily verified. However, there are three significant drawbacks:
• not all EU Member States have defined EPC ratings for all building types, which means the taxonomy cannot be applied in such cases;
• EPC ratings are not used outside EU Member States, which means the taxonomy cannot be applied outside Member States;
• the distribution of EPC ratings is very different across Member States. For example, in one State buildings with EPC A may correspond to 1% of the stock, while in another 15% of the stock. This depends on the conditions of the stock of each State, but also on the specific thresholds set by each State to define its EPC ratings. Thus, taxonomy thresholds based on EPC ratings cannot guarantee a level-playing field across Member States.
RICS strongly recommends the reinstatement of the criterion based on the performance of the top 15% of the stock, as formulated in the TEG proposal. By definition, this criterion establishes a specific proportion of the market as eligible, and is therefore fairer and more transparent than relying on each Member State’s thresholds for EPC ratings. Furthermore, it is applicable both inside and outside EU Member States.
3. Clarification on which expenses and assets are aligned
The current text does not specify which expenses and assets can be considered aligned to the taxonomy once the relevant criteria have been met for the building-related activities. These details were an integral part of the criteria proposed by the TEG, and are stated in pages 367 and 368 of the Technical Annex to the TEG Taxonomy Report published in March 2020. RICS strongly recommend that these details be included either in the taxonomy itself or in related guidance, in order to establish clear rules for market participants.
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