RICS Ensures Consistency in the EU Taxonomy

RICS Ensures Consistency in the EU Taxonomy by Incorporating Standards on Floor Space Measurement and Cost Management for Environmental Sustainability in the Built Environment.

On 13th June 2023, the European Commission took a significant step towards promoting environmental sustainability by approving a Taxonomy Environmental Delegated Act. This act includes a fresh set of criteria aimed at identifying economic activities that contribute substantially to non-climate environmental objectives. By establishing a common language for companies and investors, the EU Taxonomy Regulation aims to foster sustainable practices and enable informed decision-making. The criteria cover a wide range of environmental objectives, such as the protection of water and marine resources, the transition to a circular economy, pollution prevention, and control, as well as the restoration of biodiversity and ecosystems.

Development of New Taxonomy Criteria

The European Commission's approval of the Taxonomy Environmental Delegated Act indicates a significant milestone in the pursuit of sustainable economic activities. The Act builds upon the existing Taxonomy Climate Delegated Act and the Taxonomy Disclosures Delegated Act, which cover climate change-related objectives. These acts, along with the newly approved Act, provide a comprehensive framework for assessing and classifying economic activities based on their environmental impact.

The criteria outlined in the Taxonomy Environmental Delegated Act are largely informed by the recommendations put forth by the Platform on Sustainable Finance. This platform published its suggestions in March and November 2022, laying the foundation for the criteria that now form part of the Act. These criteria ensure that economic activities align with the objectives of sustainable water and marine resource management, the transition to a circular economy, pollution prevention and control, as well as the protection and restoration of biodiversity and ecosystems.

Notably, the European Commission has incorporated international standards proposed by the RICS into the Act. In particular, standards such as the International Property Measurement Standards (IPMS) and the International Construction Measurement Standards (ICMS) are referenced in the Act's Annex II on the transition to a circular economy. RICS professionals have played a crucial role in advocating for sustainability in the built environment sector, and their input has helped shape the Act's criteria, benefiting professionals like facility managers, valuers, and brokers engaged in sustainable practices.

Implications and Benefits

The EU Taxonomy Regulation and the newly approved Taxonomy Environmental Delegated Act have far-reaching implications for companies, investors, and policymakers. By establishing a standardized classification system for environmentally sustainable economic activities, the regulation facilitates transparency and comparability in the market. It enables investors to identify and support businesses that align with their sustainability goals while encouraging companies to adopt and improve their environmental practices.

The adoption of the Taxonomy Environmental Delegated Act also offers significant benefits for the environment and society at large. Economic activities that adhere to the Act's criteria will contribute positively to water and marine resource conservation, the circular economy, pollution reduction, and the protection and restoration of biodiversity and ecosystems. As more businesses strive to meet these criteria, there will be a substantial reduction in the environmental impact of economic activities.

Moreover, the Act's criteria provide a clear framework for professionals in various sectors, including facility management, valuation, and brokerage. These professionals can leverage the criteria to guide their work and engage in informed discussions with investors. RICS professionals, in particular, have actively engaged with policymakers to ensure the development of robust criteria that promote sustainability in the built environment sector.

Conclusion

The European Commission's approval of the Taxonomy Environmental Delegated Act marks a significant milestone in the EU's journey towards a more sustainable future. By expanding the taxonomy criteria to encompass non-climate environmental objectives, the Act provides a comprehensive framework for identifying economic activities that contribute to environmental sustainability.

The Act's criteria, heavily influenced by the recommendations of the Platform on Sustainable Finance, cover a wide range of environmental objectives, including water and marine resource management, the transition to a circular economy, pollution prevention and control, and the protection and restoration of biodiversity and ecosystems.

The inclusion of IPMS and ICMS standards in the Act demonstrates the collaborative efforts between policymakers and professionals to promote sustainability in the built environment sector. By incorporating these standards, the Act provides valuable guidance to professionals engaged in facility management, valuation, and brokerage.

Ultimately, the Taxonomy Environmental Delegated Act, along with the broader EU Taxonomy Regulation, fosters transparency, comparability, and accountability in the market. It encourages companies to adopt sustainable practices, supports informed decision-making by investors, and contributes to the overall well-being of the environment and society. As the adoption of these criteria becomes widespread, the path towards a more sustainable and resilient future for Europe and beyond is further solidified.

Our public response to Annex II on the transition to a circular economy can be found in the following link: Feedback from: Royal Institution of Chartered Surveyors.