x.project AG and King & Spalding LLP review compliance with EU ESG requirements
For the first time, taxonomy compliance confirmations for real estate portfolio holders
The real estate and IT specialist, x.project AG, and the international law firm, King & Spalding LLP, are starting to review the compliance of real estate with the EU Taxonomy Regulation. For this purpose, the partners have developed a Compliance Report. This will be the first time that real estate portfolio holders and investment fund companies receive an external confirmation of their compliance with the EU’s ESG requirements.
During the long-term cooperation between the two partners, the engineers and technology specialists of x.project AG will handle the individual reviews – such as those pertaining to the energy-efficient building structure, the resource-saving design of the technical building equipment, the recording of consumption values and the use of raw materials in new buildings. The legal reviews are carried out by the lawyers at King & Spalding. Subsequently, a statement on the level of compliance with the EU Taxonomy Regulation will be issued.
The real estate market's need for a technically and legally combined ESG audit with confirmation of conformity is enormous. In the past, we were also able to carry out ESG reports, for example with regard to technical requirements in the environmental criteria, but without confirmation of conformity in accordance with the requirements of the EU Taxonomy Regulation. This is now possible.
The real estate industry needs "ESG audits", in which technicians and lawyers work hand in hand, for a holistic audit that sheds light on the conformity of real estate investments with the EU taxonomy. We are all the more pleased about the cooperation with x.project AG.
Going forward, the Compliance Report will also be updated in terms of other environmental objectives besides climate change mitigation and the climate change related adaptation of the EU Taxonomy Regulation, and is particularly relevant for so-called impact funds according to Article 9 and for ESG strategy funds according to Article 8 of the EU Sustainable Finance Disclosure Regulation (SFDR), which have or strive for a minimum share of “sustainable investments”. The report can also be relevant for companies with real estate holdings. This is because, in addition to financial reporting, they may, in future, also be obligated to report on sustainability in accordance with Article 8 of the EU Taxonomy Regulation. The two cooperation partners will start ESG reviews in accordance with the EU Taxonomy Regulation in spring 2023.