vdp and Drees & Sommer update and expand benchmarking for top 15% criteria for real estate

Berlin, October 12, 2023

Cooperation to verify EU taxonomy compliance in connection with the acquisition and ownership of real estate

The Association of German Pfandbrief Banks (vdp) and the consulting company Drees & Sommer have updated their top 15% benchmarking, a tool that has become firmly established in the market. The update will enable credit institutions to continue to verify compliance with the EU taxonomy in a comprehensible and transparent way when financing existing buildings and analyzing their real estate loan portfolios. In addition, the benchmarking has been expanded to include additional metrics for energy and CO2 emissions so that it now also takes current regulatory requirements such as the recently revised German Buildings Energy Act (GEG) into account.

Since April 2022, the benchmarking tool of vdp and Drees & Sommer has supported financial market players and the real estate industry in providing evidence of EU taxonomy compliance with regard to the economic activity “acquisition and ownership of real estate” set down in the taxonomy. Specifically, the tool is used to determine benchmarks for meeting the so-called top 15% criteria for real estate in Germany (residential and non-residential buildings). A building is considered to be taxonomy-compliant if, amongst other things, it belongs to the best 15% of the national or regional building stock in terms of its primary energy demand.

“The market response to our benchmarking has been strong and consistently positive. It facilitates credit institutions’ work in real estate financing tremendously. With the comprehensive update we make sure that the benchmarking will continue to be a valuable asset,” Sascha Kullig, Member of the Board of Directors at vdp, commented. “Fulfilment of the top 15% criteria is an important building block in the analysis of taxonomy compliance. Our clear and comprehensible criteria provide orientation and create transparency.”

According to the EU Taxonomy Regulation, the acquisition or ownership of a building constructed before 31 December 2020 makes a substantial contribution to the environmental objective of climate change mitigation if, amongst other things, one of the following two technical conditions is met: either the building has an Energy Performance Certificate class A, or verification can be provided that the building belongs to the best 15% of the national or regional building stock in terms of operational primary energy demand. A distinction is made here between residential and non-residential buildings.

“Within a three-month period we made an exhaustive comparison of the benchmarking with current regulatory requirements. Based on that, we updated which criteria must be fulfilled in order for properties to belong to the top 15% of their property class. In this way, it is possible to provide evidence in a transparent way that the buildings make a substantial contribution to the environmental objective of climate change mitigation. For better comparability, we also added more detailed energy metrics and values for CO2 emissions,” said Claudio Tschätsch, who is responsible for ESG and Sustainable Finance at Drees & Sommer.

The study was conducted exclusively for the vdp and its member banks and is based on representative, publicly available information sources. A summary of the results is available on the vdp’s website.

About Drees & Sommer:
Uniting opposites to create a world we want to live in.

What sets the partner-led consulting company Drees & Sommer SE apart is that they advise on and implement sustainable, innovative and economic solutions for real estate, industry, energy and infrastructure – or even offer clients both services from a single source. Since it was founded in 1970, the company has gained a reputation in the real estate sector as a pioneer of sustainability and driver of digitalization. Drees & Sommer have more than 5,100 employees at 59 locations. Inter-disciplinary teams working on over 5,000 projects worldwide pursue the goal of creating a livable future and uniting apparent opposites: tradition and future, analog and digital, efficiency and well-being. As entrepreneurs within the company, the personally responsible partners at Drees & Sommer are committed to this mission.