Climate protection is a central, collective task of our time. In order to achieve the climate targets, we are not only called upon as individuals. Companies, credit institutions and financial service providers are also obliged to play an active role due to increasing regulatory requirements.
In order to define and achieve the climate targets, the European Commission has launched the European Green Deal.
European Green Deal – What are the goals?
Europe is to be the first continent to become climate-neutral. The European Green Deal is the conceptual basis for this change.
All 27 member states have committed themselves:
- to reduce net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels.
- to be the first alliance of states to become climate-neutral by 2050.
To achieve this goal, the economy and society must be realigned in many areas.
A scientifically based, standardized classification system is required to define whether an economic activity is actually sustainable and to avoid so-called ‘greenwashing’.
EU Taxonomy Regulation – What does it mean?
As part of the European Green Deal, the EU Taxonomy Regulation came into force in July 2020. It is a standardized classification system to provide transparent and comparable information on sustainable economic activities in investment assets, portfolios and business areas.
An economic activity is environmentally sustainable if it makes a significant contribution to at least one of the following environmental objectives (Article 9 of the EU Taxonomy Regulation):
- Climate protection (avoidance or reduction of CO₂ emissions)
- Adaptation to climate change (avoiding and reducing the adverse effects of climate change)
- Sustainable use and protection of water and marine resources
- Transition to a circular economy
- Reduction and prevention of air pollution
- Protection and restoration of ecosystems and biodiversity,
without causing significant harm to any of them (Do Not Significantly Harm criterion DNSH) and complies with certain minimum standards (and above all human and employee rights) (Minimum Safeguards).
Disclosure obligation for banks and other financial service providers
For this reason, banks and other financial service providers are obliged to disclose information:
- Since January 2022, they have had to disclose their “taxonomy eligibility” as a first step. This means they must state the proportion of the assets they manage for which there are taxonomy criteria.
- From January 2024, they will then be obliged to report annually on the percentage of their own financing that complies with the sustainability requirements of the taxonomy (“green asset ratio”).
Disclosure obligation for capital market-oriented companies
Since 2022, capital market-oriented companies with more than 500 employees (e.g. stock corporations) have also been obliged to include their sustainability activities in their non-financial reporting (annual report or separate sustainability report).
- Since January 2022, these companies have had to state how and to what extent taxonomy sustainability criteria are defined for their economic activities.
- From 2023, disclosure of their “taxonomy compliance” will be mandatory. This means that they must state whether these sustainability criteria are being met.
- In accordance with Article 8 of the EU Taxonomy Regulation, the disclosure obligation includes
- the share of their EU taxonomy-compliant turnover from ecologically sustainable products or services in total turnover
- EU taxonomy-compliant capital expenditure (CapEx)
- EU taxonomy-compliant operating expenses (OpEx)
The adoption of the EU Corporate Sustainability Reporting Directive (CSRD) by the EU Parliament on November 10, 2022 will significantly expand the group of companies that are required to report on these non-financial disclosures from summer 2023.
ESG criteria – what are they?
The abbreviation ESG stands for the sustainability-related areas of responsibility within the company: Environment, Social and Governance.
Environment
The Environment division covers all forms of climate and environmental protection, including the reduction of CO₂ emissions, adaptation to climate change, energy management and resource conservation as well as sustainable recycling management and biodiversity and ecosystems.
Social
The Social area covers responsibility for employees and therefore factors such as occupational health and safety, diversity and equal rights, human rights and minimum social requirements in the supply chain.
Governance
The area of governance encompasses responsible, sustainable corporate management of economic, environmental and social issues such as corporate values, controlling and monitoring processes and the establishment and implementation of a sustainable code of conduct.
ESG criteria and the key performance indicators (KPIs) derived from them enable a standards-based review and measurability of sustainability criteria in companies. For the ESG criteria on climate protection, total greenhouse gas emissions are defined as an ESG KPI, measured in CO₂. For energy management, the ESG KPI is total energy consumption, measured in kWh.
Buildings – What role do they play in achieving climate targets?
Without a sustainable focus on existing buildings, the EU will struggle to achieve its climate targets. The EU expert group has determined that buildings account for around 30% of CO₂ emissions in the EU.
In Germany, more than half of existing properties were built before 1977 – before the first Thermal Insulation Ordinance came into force. Currently, around 36% of all buildings have energy efficiency classes G and H, the “worst-performing buildings”. They are responsible for half of all CO₂ emissions in this sector. 80% of these buildings must be brought up to the level of new buildings by 2050 in order to achieve the climate target.
CO₂ emissions from buildings – How do I obtain this data?
The ESG KPIs of a building are listed in the energy performance certificate. Currently, every owner needs a valid energy performance certificate if they want to sell or rent out their building. The date of issue of the energy performance certificate may be up to 10 years ago. In the case of existing energy performance certificates, it is therefore not guaranteed that they correspond to the actual renovation status of the building or that the (old) values entered correspond to today’s values. Many owners do not have an energy performance certificate. In order to reliably determine the ESG KPIs, an energy consultant would therefore have to be commissioned to draw them up – and this usually takes several weeks to months, even for individual buildings.
The path to Net Zero with SkenData
In order to meet the requirements of the EU Taxonomy Regulation, the corresponding ESG KPIs must be determined at short notice. To achieve the climate targets set, regular monitoring of the impact of the measures implemented on the entire portfolio is also required in order to make success and progress measurable and verifiable.
Furthermore, it is necessary to determine the effects of planned refurbishment measures on the energy efficiency class, CO₂ emissions and energy requirements in advance in order to implement targeted measures.
SkenData offers a solution that takes you from “no data” to an indication, valid ESG KPIs, a refurbishment roadmap and a legally valid energy performance certificate in four simple, automated and digital steps. This gives you an overview of the current status of your portfolio at all times and allows you to manage further measures to achieve your climate targets.
Step 1: ESG data analysis of the entire building portfolio
Data enrichment takes place via data exchange. The transfer of addresses in xls or csv format is sufficient to enrich the ESG KPIs CO₂ emissions, energy requirements and energy efficiency class of the entire portfolio for indication. This opening balance sheet supports reporting in accordance with the EU Taxonomy Regulation and provides the starting point for deriving measures to decarbonize the building stock.
Step 2: Integration of ESG data determination into your customer processes via an interface
The current status of a building in terms of CO₂ emissions, primary and final energy requirements and energy efficiency class is determined digitally. SkenData accelerates data collection with data prefill and standard information about the building. SkenData supports the process of providing customer information on systems and the nature of the building and delivers structured data.
Step 3: Automated creation of a refurbishment roadmap
Based on the determined energy data, possible individual measures as well as packages of measures for the energy modernization of a house are automatically calculated with information on the corresponding energy and CO₂ savings potential, costs and payback period.
This also enables a quick analysis of the implementation of the various measures on the ESG KPIs of the entire building stock.
Step 4: Issue a GEG and DIN-compliant energy requirement certificate
SkenData is an authorized issuer of energy demand certificates. SkenData can immediately issue an officially registered energy demand certificate on the basis of the determined actual status. This makes it possible to record all essential, current ESG KPIs after each refurbishment measure carried out and to transfer them to your portfolio.
Would you like to find out more about the SkenData solution for determining ESG KPIs? We would be happy to present the process to you in detail and advise you. Simply use our contact form to get in touch.
