Achieving climate neutrality is very difficult, and without real estate it is impossible. Real estate is one of the sectors with the greatest environmental and social impact, accounting for a staggering 26% of global greenhouse gas emissions.
The data comes from the Intergovernmental Panel on Climate Change (IPCC) and does not take into account the manufacture of materials, their transport, the construction of buildings, or demolition. Taking all factors into account, the figure reaches 40% in Spain.
With Europe setting a target of achieving net-zero emissions by 2050, the challenge facing the sector is enormous.
At Gesvalt, we recommend that the decarbonisation process, the route to improving environmental, social and corporate governance practices, be approached from four main angles.
ESG 360: how we put sustainability into practice in real estate
In line with the responses of key global players, Gesvalt Advisory Services understands Real Estate Sustainability from a comprehensive perspective, which is based on four equally important aspects for improving ESG criteria:
Measuring the ESG ranking of the property portfolio
A stated commitment to ESG principles is meaningless without metrics. Analysis provides valuable information about the starting point and allows objectives and actions to be set.
ESG Real Estate measurement systems cover indicators such as:
Energy Performance Certificate (EPC)According to RD 390/2021, it affects private buildings larger than 500 m² and public buildings larger than 250 m². It also includes new buildings and those for sale or rent.
Certifications: measurement of the ESG performance of buildings in accordance with various internationally recognised approaches (Green Seal; BREEAM; USGBC)
Vehicles: measurement of validated ESG performance of investment vehicles (funds, SOCIMIs), and relative position compared to peers (GRESB).
Renovation to achieve substantial improvement in the ranking
As a result of the measurement, the need for improvement may arise for two main reasons: corporate social responsibility policy or because our stallholders request it.
There are three actions that we at Gesvalt believe we can implement without disrupting normal operations:
Insulation: Improvement of the building's energy efficiency by increasing the thermal insulation of the building envelope: replacement of window frames, triple glazing, ETICS.
Photovoltaic: Improvement of the building's energy efficiency by adding a photovoltaic solar energy system as a primary energy source.
Aerothermal energy: Improvement of the building's energy efficiency by replacing the traditional heating/cooling system with an aerothermal system.
Study grants: amount and application process
The political system's response is to assist this renewal by facilitating part of the expenditure through subsidies, rebates and tax deductions.
National and European funds for ESG improvements:
Work: Subsidy covering a high percentage of renovation works through various calls for applications at the regional level.
Property tax and construction tax: Bonus on municipal taxes on real estate and buildings, facilities and works.
Taxation: Tax deductions derived from investments resulting from the Renovation processes.
Green financing analysis of alternatives (green loans, green bonds)
The financial system responds by offering better-than-standard conditions when it has to finance capex that improves the ESG ranking of buildings or companies.
Green financing as an alternative:
Liquidity: Banks are prioritising the financing of sustainable projects on a daily basis, setting very aggressive targets for increasing these operations in the short and medium term in their portfolios.
Alternatives: From corporate loans or “green loans” to the issuance of a “green bond”, meeting objectives linked to improving energy efficiency/sustainability.
Access: Access to premium financial institutions and their ESG units, allowing you to select the product that best suits your needs.
What do our ESG sustainability services include?
Consultancy PHASE 1 diagnosis of the asset or portfolio
- We carry out an initial measurement of the building's ESG ranking.
- We study the technical feasibility of the renovation measures necessary to achieve a substantial improvement in the final ranking.
Consultancy PHASE 2 Improvements are possible, and we implement them.
- Detailed calculation of the necessary CAPEX.
- Study of subsidies available in the specific geographical area.
- Proposal for specific Green Financing solutions.
Consultancy PHASE 3 Implementation with services:
- Project Monitoring/Management.
- Grant Management.
- Assistance with access to green financing