New buildings – what exactly are they to be like? Growing expectations, but also opportunities on the New Construction market

Assessment of the construction of new buildings and of buildings completed after 31 December 2020 for compliance with the technical screening criteria of the EU Taxonomy is not a simple process. The Taxonomy sets out a number of guidelines specifying the minimum requirements that buildings should meet to minimize their environmental impact. It is not easy to meet these criteria today - the market is transitioning towards sustainable construction, thereby creating many challenges. The first challenge is the approach to collecting data for analysis,” 

explains Ilona Otoka, ESG Services Manager, Cushman & Wakefield.

Property ownership and sale can qualify as making a substantial contribution to one of two environmental objectives: climate change mitigation or climate change adaptation, while the construction of new buildings or property refurbishments can also contribute to the goal of transitioning to a circular economy. Beyond the criteria for a substantial contribution, to comply with the EU Taxonomy, the activity has to meet additional criteria of not causing significant harm to any of the other five environmental objectives in line with the ‘Do No Significant Harm’ (DNSH) principle. Additionally, the property owner must ensure that its economic activity adheres to ‘minimum safeguards’, such as the UN Guiding Principles on Business and Human Rights, to prevent any negative social impact. Only when all these criteria are met can the activity be considered the EU Taxonomy-compliant,” 

says Ilona Otoka.

Designing for disassembly to recover materials aims to reduce both the consumption of resources and pollution, including reducing embodied GHG emissions. This may be supported by the establishment of material banks, which will involve documenting and tracking the materials and components used in buildings. As a result, once a building’s lifecycle is complete, this will allow for precise identification of materials that could be recovered and reused in other projects. Material banks will also facilitate recycling by providing details on the properties and origin of materials,” 

says Michał Pierzchalski, Senior ESG Consultant, Cushman & Wakefield.

Incorporating a DfD strategy into the architectural process is not without its challenges – these include the lack of regulations regarding recycled materials, the uncertainty around the quantity and quality of data on the environmental impact of building materials, as well as the cost and lower speed of the construction process or an approach to demolition,” 

adds Michał Pierzchalski, ESG Senior Consultant, Cushman & Wakefield.

Thanks to the investor’s ambitious approach to Upper One, the project - in terms of design and construction techniques - is on track to support circularity. Sustainable construction takes more than just thinking about environmental impact which is currently the focus of the EU Taxonomy, including energy efficiency and minimising the carbon footprint throughout a building’s life cycle. It also encompasses advancing a circular economy, minimising pollution, responsible water management, and reducing negative impacts on biodiversity and ecosystems. Another equally important aspect which the EU Taxonomy has yet to address but will in the future is social impact. Therefore, taking a holistic approach to all ESG aspects undoubtedly presents a challenge for investors on multiple fronts. An independent audit right from the start of a development process and its ongoing validation will deliver many benefits such as better project management, ESG risk mitigation, as well as continued internal education and the promotion of best practices in the local market,” 

concludes Ilona Otoka.