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Green Leases

In the ESG context

ESG Real Estate Insights 2021

In the institutional real estate market, green buildings and certificates for green buildings, such as LEED, DGNB, BREEAM, ÖGNI, are already market standard. Due to the already visible impact of the climate change and the ESG regulations enacted by the EU Commission, also the green operation of a building and green leases gain increasing importance. This raises the question of what specific provision can be regulated in such “green leases”.

In December 2019, the EU Commission introduced the “Green Deal”. Based thereon the EU Commission adopted three eminent regulations that form the framework for the implementation of environmental, social and governance
(ESG) criteria. One of those regulations is the Taxonomy Regulation that provides that only those economic activities are “green” which significantly contribute to the achievement of environmental objectives. The relevant six environmental objectives are:

  1. Climate change mitigation
  2. Climate change adaptation
  3. The sustainable use and protection of water and marine resources
  4. The transition to a circular economy
  5. Pollution prevention and control
  6. The protection and restoration of biodiversity and ecosystems

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