Energy-efficient Buildings Key to Hitting Climate Targets

Sustainability

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The European Union could reduce energy use by 6% and CO2 emissions by 5% by upgrading the existing building stock. Nearly two-thirds of European investors believe that sustainability will become an increasingly important factor in real estate investment decisions over the next three years. The same trends apply to Hungary, and are true for the tenant side too, experts at Icon Real Estate Management confirmed.

The built environment is the biggest energy consumer in the EU, according to a European Commission study, with buildings accounting for 40% of energy consumption and 36% of carbon emissions. According to a report by the International Energy Agency, total energy consumption in the global buildings sector is expected to increase by almost 40% by 2050, demonstrating that current levels of sustainability practices are not sufficient to combat climate change.

Improving the energy efficiency of buildings is therefore a priority in the European Green Deal, which sets a target of carbon neutrality by 2050. To achieve this, the European Commission has set a target for all new buildings in the EU to be zero-emission by 2030, and for public buildings to be zero-emission by 2027.

Energy efficiency and sustainability are also becoming increasingly important to tenants, with nearly two-thirds of European investors already believing that this will become an even more important consideration in the property market in the next three years, according to an analysis by the Royal Institution of Chartered Surveyors (RICS).

"For a significant proportion of tenants, employee well-being and sustainability indicators are now more important than rent levels when making a property decision. Domestic market trends, as well as ICON's surveys, confirm that health and environmental protection is an increasingly important consideration in Hungary," said Zsolt Kákosy, senior director of Icon property management. 

"At a time when more and more countries are setting ambitious targets to reduce carbon emissions, it is important to see that energy-efficient buildings, while benefiting people's well-being and the environment, are also better able to meet stringent regulations," he added.

In addition to EU requirements, the importance of ESG considerations is becoming increasingly apparent in the property market. Environmental, social, and governance factors have been key to the success and sustainability of companies for years, and this is forecast to increase further in 2023. Market trends are driven mainly by global challenges such as climate change and social inequality.

"In the coming years, investors and customers are expected to place increasing demands on ESG performance, so it is essential to pay attention to these aspects in order to remain competitive," noted Kákosy.

Róbert Flück, director of facility management at Icon explained, "Thanks to our colleagues with decades of experience, Icon has the expertise to provide property owners and tenants with the technical background they need to optimize their property usage patterns and rationalize their consumption and energy costs in the current economic environment." 

"The energy-efficient operation of a property, be it an office, a commercial unit, or a warehouse, requires a modern technical and infrastructural environment, competent and careful management, and conscious attention on the part of the user. Icon's facility management experts can provide tenants with all the support they need to achieve the latter," he said.

Improving the energy efficiency of buildings can not only drastically reduce carbon emissions, but also the EU's energy import bill, which reaches EUR 330 billion per year. This is why EU lawmakers are working to update the 2030 energy efficiency target of 32.5% i.e. to reduce final energy consumption by at least 40% and primary energy consumption by 42.5%. 

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