Building Back Better: Real Estate in the Wake of COVID-19 and the European Green Deal
It has long been known that a significant majority of Europe’s buildings are not fit for purpose in a world of accelerating climate change.
Accounting for approximately 40% of the European Union’s total energy consumption and for 36% of its CO2 emissions, the sector has been slow to respond but is going to be at the forefront of rapid change as Europe targets climate neutrality by 2050 as its political priority, and uses the European Green Deal as its growth strategy.
With the sector grappling with the dramatic shortterm consequences of the Covid-19 pandemic, EU policy-makers are now targeting massive investment in a ‘Renovation Wave’ as well as an ambitious legislative programme on buildings and construction, including on ESG and sustainability issues, that will immediately and directly impact the real estate industry. How prepared is it for the challenges and opportunities ahead?
The Need to Renovate
For well over a decade, and since its first combined package of climate and energy policies, the EU has seen the need to improve the quality of Europe’s built environment, given the amount of CO2 emissions that come from buildings and construction.
However, the policy landscape has recently picked up the pace, driven by the climate crisis and the urgent need for change. The EU, representing the world’s largest single market, enacted the first European ‘Climate Law’ in March 2020, collectively committing the EU and its 27 Member States to being climate neutral by 2050. It’s a significant challenge.
More directly, the EU announced its Renovation Wave strategy on 14th October, an ambitious policy framework that could result in the renovation of around 35 million buildings by 2030 and create up to 160,000 construction jobs in the process (Source: EUobserver, 2020).