EU Platform: Market standards such as BREEAM or CRREM may serve as proxies
The EU Platform on Sustainable Finance advocates for the temporary acceptance of international sustainability standards such as BREEAM, CRREM, DGNB, or LEED as proxies within the EU Taxonomy. As long as there is no harmonized European system for energy performance and sustainability scores, these standards can help prevent sustainable building investments from being unjustly excluded from the Taxonomy.
An example of a market standard is the Carbon Risk Real Estate Monitor (CRREM), which is increasingly used by real estate stakeholders to assess whether a building is on track to meet the Paris Proof criteria.
The EU Platform on Sustainable Finance is an advisory body to the European Commission that supports the development and implementation of EU policy on sustainable finance, particularly regarding the EU Taxonomy for sustainable economic activities.
In a recent report, the Platform raises the alarm about bottlenecks in the application of the Taxonomy to the real estate sector. It points to divergent interpretations, limited access to data, and a systematic preference for new construction over renovation—an approach that runs counter to the EU’s climate goals.
The EU Taxonomy is a European classification system that determines which economic activities can be considered sustainable. It is designed to prevent greenwashing and to direct investments toward activities that genuinely contribute to environmental objectives such as climate mitigation, circularity, and biodiversity. Each type of activity—such as new construction or renovation—is subject to technical criteria and requirements, including the Do No Significant Harm principle.
The construction and real estate sector accounts for approximately 40% of the EU’s CO₂ emissions. To achieve climate targets, the sector must rapidly transition to whole life carbon approaches, which address not only operational emissions but also embodied emissions—the impact of materials and construction processes over the entire building lifecycle.
According to the report, the three main economic activities in the Taxonomy—7.1 (new construction), 7.2 (renovation), and 7.7 (acquisition and ownership of buildings)—are not clearly delineated. This leads to confusion among financiers, developers, and investors, with varying interpretations across Member States. As a result, unequal access to sustainable finance emerges.
A key criticism is that the current rules unintentionally favor new construction. The Taxonomy still does not sufficiently account for the climate impact of the construction phase itself (embodied carbon), while renovation is subject to the same heavy reporting requirements as new construction—even for small-scale residential upgrades.
The Platform also calls for a clear roadmap toward a zero-emission built environment by 2050. According to the report, this requires sending strong signals to the sector about future tightening of requirements and providing greater support—especially for SMEs and private homeowners—in fulfilling reporting obligations.
The report makes it clear that sustainable finance in real estate is currently hampered by unclear regulations. Only with clear criteria and harmonized implementation can the EU Taxonomy achieve its intended goal: steering capital flows toward truly sustainable buildings.
Click here for the full report from the Platform on Sustainable Finance.
