By Nicole K. Phinopoulou, Lawyer, Corporate Commercial Banking, ESG, Sustainable Finance, LLB. LLM (UCL). LPC, CISL, University of Cambridge
The path to Sustainable Development through the implementation of the 17 Sustainable Development Goals of the United Nations 2030 Agenda (SDGs) is now a reality, with an impact on all aspects of society and business development.
Two of the sectors particularly affected by this new order of things are the interlinked Real Estate and Construction sectors. The World Green Building Council estimates that buildings and structures account for approximately 39% of global CO2 emissions while operational emissions account for 22%. The construction industry is also responsible for 36% of global energy consumption. With the earth’s population estimated to increase by 30% by the end of the century, the need for new buildings and related infrastructure becomes even more acute. At the same time, the impact of the climate crisis reinforces the need for the development of greener buildings.
By the term “green building” we mean a building that, in its design, construction or operation, not only reduces the negative effects on the climate and the natural environment but can create positive green and sustainable effects. Green buildings conserve valuable natural resources and generally improve quality of life.
To define a building as “green”, there are international organizations that set specific rules by which its environmental footprint is certified. These are holistic methods of environmental calibration of buildings, which classify each building according to its characteristics. In this context, the European Commission (EC) has established regulations and obligations in relation to the reporting and evaluation of performance around the sustainability of buildings, throughout their lifetime. European Union (EU) building policies aim for an integrated approach, covering sustainability, in terms of energy and resource efficiency, as well as health and safety issues for both newly-constructed buildings and renovations of the existing building stock.
Accordingly, sustainable construction can be considered an alliance that includes all professionals involved in the various stages of construction. From developers of new solutions, investors, construction companies, professional service providers, industry suppliers and other stakeholders. Estimates suggest that greenhouse gas emissions from buildings can be reduced by 90% by 2050.
The role of the Construction Products Regulation (CPR) 16 is decisive, of which its technical standards cover issues such as: mechanical resistance and stability, fire safety, hygiene, health and environment, safety and accessibility during usage, noise protection, energy saving and heat conservation, sustainable use of natural resources. However, it is now taken for granted that there is a need for a new, more efficient model in which all construction industry professionals now have to take into account climate change and green growth.
EU aims to increase material efficiency and reduce climate impact, therefore has launched a comprehensive new strategy for a sustainable environment across all sectors. In relation to the construction sector, the EU primarily, emphasises on the principles of circular economy throughout the life cycle of buildings, and adaptability of building materials, the integration of assessment of the life cycle in public contracts, the reduction of soil sealing, the restoration of abandoned or contaminated land and the circular use of excavated soils.
Also of particular importance is the promotion of the “Wave of Renovations” initiative within the framework of the European Green Deal, which aims to improve the energy efficiency of the building stock in the EU. This is a particularly important development for Cyprus, which faces various issues regarding its old buildings. It is also clear that in several areas that have experienced economic development in recent years, old buildings are now considered landmarks.
Given the timeless importance of Real Estate and Construction for the Cypriot economy and the emphasis that international investors are now placing on Sustainability issues, the integration of international standards and Environmental, Social, Governance (ESG) criteria in all stages of the sector is considered important.
It is an undisputed fact that both for the interest of the environment and society as well as for the investment attractiveness applied through EU Sustainability Tools, the Next Generation EU is more than a recovery plan. As stated by the EU: “It is a once in a lifetime chance to emerge stronger from the pandemic, transform our economies, create opportunities and jobs for the Europe where we want to live. We have everything to make this happen. We have the vision, we have the plan, and we have agreed to invest together €806.9 billion. It is now time to get to work, to make Europe greener, more digital and more resilient.” EU plan aims to ensure coherence between industrial, environmental, climate and energy policy to create an optimal business environment for sustainable growth, job creation and innovation.
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