RICS Responds to CSRD: Opportunities and Challenges

RICS, the global organization of real estate professionals, has participated in the European Commission's consultation on the CSRD, to improve sustainability reporting in the real estate sector. The new regulation will have a significant impact on real estate professionals, with challenges such as data availability and reporting complexity, but also opportunities for accurate valuations and professional development, RICS concludes.

RICS emphasizes the importance of transparency, uniformity, and accuracy in property measurement and valuations, and stressed the importance of environmental, social, and governance (ESG) factors in the valuation process.

RICS recognizes the profound impact of the CSRD on the real estate sector and supports the implementation of harmonized and robust reporting standards. They see the CSRD as a crucial step in ensuring transparency and credibility in sustainability reporting.

However, RICS is also aware of the challenges and opportunities that the CSRD brings. They point to the lack of consistent and harmonized ESG performance indicators, which poses a challenge for the sector. The absence of sector averages for real estate in many EU countries is also cited as an obstacle to effective benchmarking.

The complexity of reporting is also a concern. RICS warns that differing reporting requirements across various sustainability reporting frameworks can complicate reporting. They advocate for more alignment with existing frameworks to minimize redundancy and streamline reporting obligations.

As for the implications of the CSRD for the real estate sector, RICS emphasizes that the new directive will lead to increased reporting requirements. This will compel companies to make broad disclosures of ESG factors. Furthermore, the focus on ESG factors will lead to a change in valuation practices, which may affect the overall approach to valuation within the sector.

Finally, RICS points to professional development opportunities within the real estate sector. With the implementation of the CSRD, professionals well-versed in sustainability reporting and ESG practices are expected to be in high demand. Thus, the new directive offers not only challenges but also opportunities for growth and innovation within the real estate world.

Click here to read the full response from RICS to CSRD.