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11 October 20217 minute read

Sustainable buildings – real estate tools against climate change

As sustainability and global commitment towards reversing climate change have come to the forefront of policy-making and corporations’ long-term strategies, property investors and the real estate sector are also looking to make a change to the buildings they develop and operate, implementing, embedding and enhancing sustainability to their existing properties. Their motivation becomes obvious considering that buildings and the construction sector accounts for approximately 35% of final energy use and 38% of energy and process-related CO2 emissions globally and, overall, the building sector is not on track to meeting globally established goals.1

While for many developers and owners it is not yet fully clear which specific steps they could be taking towards the ambitious goals set out in the Paris Agreement, the market processes of supply and demand have gradually guided them towards the development of green, smart buildings, which meet the quality and infrastructure requirements of today, without compromising the earth’s resources.

In recent years, many sophisticated systems have been designed to reduce energy consumption and increase occupant comfort in residential, office, retail and industrial buildings all over the world. In this context, several sustainability assessment methods for buildings have gained popularity among real estate developers.

EU and local regulations

Following its accession to the Paris Agreement, the EU published its strategy and taken a leading role in the fight against climate change in five main areas:

  • energy safety
  • decarbonization
  • energy efficiency
  • the energy internal market
  • research, innovation and competitiveness2

This ambitious goal has led the EU to pay particular attention to the transformation of the real estate sector, in line with the “energy efficiency first” principle.

To boost energy performance of buildings, the EU has established a legislative framework that includes the Energy Performance of Buildings Directive 2010/31/EU and the Energy Efficiency Directive 2012/27/EU. These directives promote policies that will help (i) achieve a highly energy efficient and decarbonized building stock by 2050, (ii) create a stable environment for investment decisions and (iii) enable consumers and businesses to make more informed choices to save energy and money. Both directives were amended, as part of the Clean energy for all Europeans package, in 2018 and 2019. In particular, the Directive amending the Energy Performance of Buildings Directive (2018/844/EU) introduces new elements and sends a strong political signal on the EU’s commitment to modernize the buildings sector in light of technological improvements and increased building renovations. Regulation 2018/1999 was also adopted with the role of ensuring a coordinated implementation of the energy union strategy.

In Romania, the transposition of Directive 2018/844 and the alignment of national legislation with Regulation 2018/1999 was performed through Law no. 101/2020 for the amendment and completion of Law no. 372/2005 on the energy performance of buildings, which entered into force on July 4, 2020.

Law no. 101/2020 sets forth the obligation of the Ministry of Public Works, Development and Administration to issue a long-term strategy aimed at the renovation of the national complex of public and private residential and non-residential buildings, and the gradual transformation into a real estate complex with high energy efficiency, facilitating the transformation of existing buildings into “nearly zero-energy buildings.” The “nearly zero-energy buildings” are buildings with very high energy performance, where the energy required to ensure energy performance (ie energy for the needs of normal use of the building – heating, hot water, cooling, ventilation and lighting) it is almost equal to zero or very low.

Mandatory certificate and measures

Romania has introduced a certificate that indicates the energy performance of a building or a building unit and contains data on primary and final energy consumption, including from renewable energy sources, and the amount of emissions in CO2 equivalent. For existing buildings, the certificate also includes recommended measures to reduce energy consumption and increase the share of the use of renewable energy sources in total consumption.

The certificate is issued by energy auditors for buildings, at the request of the investor / owner / manager of the building and is valid for ten years from its issuance date, unless major renovation works that modify its energy consumption are carried out.

In addition to general compliance obligations to minimum energy efficiency requirements, for new buildings / other categories of buildings, such as single-family homes, residential complexes, offices, educational buildings, hospitals, hotels and restaurants, sports buildings, commercial buildings, the competent authorities will request from the owner / investor, as part of the building permit process, to prepare a study on the possibility of using high efficiency alternative systems, depending on their feasibility from a technical, economic and environmental point of view.

Optional certifications

In recent years, real estate market players have shown growing interest in the energy efficiency of the buildings where they operate which, in turn, has led to owners and developers wanting to show that their properties, including the construction materials and techniques, building processes, technologies and innovations implemented, are both “green” and “smart.”

As, according to specialists, real estate projects that achieve a high rating of sustainable certifications register high benefits in terms of energy efficiency (the reduction of energy consumption with 25-35% on average), occupants’ comfort and employees’ productivity, developers seek to maximize long-term benefits of having a green certified (or multi-certified) building.

Several green certification and sustainability assessment have become popular in the real estate market, such as:

  • LEED – a leading program for green buildings and communities worldwide applicable for all building types and all building phases, including new constructions, interior fit-outs, operations and maintenance and core and shell.
  • BREEAM – a leading global sustainability assessment method for master planning projects, infrastructure and buildings, recognizing and reflecting the value in higher performing assets across the built environment lifecycle, from new construction to in-use and refurbished ones.
  • EDGE – a green building standard and a certification system available in more than 160 countries that helps to determine the most cost-effective options in a local climate context, applicable for buildings of all vintages, including new constructions, existing buildings and major retrofits.
  • WELL – the premier standard for buildings, interior spaces and communities seeking to implement, validate and measure features that support and advance human health and wellness.

Romania has over 250 buildings and real estate projects that have been certified according to one of the international sustainability schemes mentioned above. In 2019, more than 40 office buildings, shopping centers, warehouses, residential and industrial spaces were certified in Romania, out of which about 75% are located in Bucharest, followed by Cluj-Napoca, Timisoara and Brasov. Last year saw Romania’s first two BREEAM Outstanding green certifications (the higher rating in BREEAM sustainability scheme) awarded to the members retail industry and multiple sustainable certifications for office building owners.3

Recently, the EU also created a framework for sustainable buildings – Level(s)4 – essentially implementing a common understanding of a building’s sustainability performance, which can be used by both private and public actors, ranging from authorities and policymakers to designers, developers and owners. While the Level(s) framework is still in its early days and yet to gain the popularity of the above certifications, there are certain clear advantages for its wide-scale adoption (not least for being open source and providing step-by-step learning and guidance to users) and, therefore, its evolution will certainly attract the interest of forward-looking investors.

The future belongs to green, sustainable buildings

Considering the current concerns and commitments around sustainability and environment, it is essential for owners and developers to prove, with the help of recognized certification, that their modern buildings are effectively contributing to climate change goals, supporting energy efficiency, providing comfortable and sustainable premises that save energy, water and resources, generate less waste and support human health. The search for green, sustainable buildings is a key factor in successfully attracting forward-looking business partners. As more occupants look for spaces that are good for both people and the environment, and the pressure to slow and reverse climate change heats up, green sustainable buildings are here to stay.

1 UNEP 2020 Global Status Report for Buildings and Construction
2 2021-2030 Integrated National Energy and Climate Plan
3 Business Review, 12.02.2020
4 Level(s) European framework for sustainable buildings