Sustainable Finance - UIPI's comments to the draft Delegated Act
The Sustainable Finance at EU level aims at supporting the delivery on the objectives of the European Green Deal by channeling private investment into the transition to a climate-neutral, climate-resilient, resource-efficient and just economy, as a complement to public money. The EU Taxonomy is one of the most significant developments in sustainable finance as it provides a toolkit for determining which economic activities are environmentally sustainable. UIPI therefore welcomes the possibility to provide comments to the recently published draft Delegated Regulation Ares(2020)6979284 and two Annexes relevant to the Sustainable finance.
We welcome the Commission’s level of ambition in defining the target as “at least 30%” in the Technical Screening Criteria 7.2 Renovation of existing buildings that reads “The building renovation complies with the applicable requirements for major renovations or lead to a reduction of primary energy demand (PED) of at least 30 %.”, as the experience demonstrates that 30% savings for major renovations is a both challenging and reasonable level.
In relation to the 7.7 Acquisition and ownership of buildings, we fully support the proposal put forward by the Technical Expert Group (TEG) underlying that the TSC should be set at a level reflecting the top 15 % in terms of energy demand, rather than on solely the Energy Performance Certificate (EPC) Class A. We deplore the fact that the technical screening criteria are exclusively requiring EPCs without enabling use of alternative schemes as proxies.
In fact, our concern is that the reference to EPC is less balanced and feasible since EPCs are defined, for the time being, differently across Member States, which will subsequently entail a lack of level-playing field and comparability in and outside the EU. Additionally, the grading system A-G has not even been introduced in all Member States. Therefore, we are convinced that referring to Class A, which is not used across the EU, will lead to confusion for the financial sector when assessing economical activities in real estate. Similarly, we regret to observe that under the acquisition and ownership part, the focus of the Commission is set entirely on the acquisitions of new buildings. From the climate change mitigation’s point of view, this is highly counterproductive. In fact, in several Member States, solely the newly constructed buildings will be able to meet the EPC A requirement, consequently representing an encouragement for a greater amount of construction. Such an approach challenge’s the EU’s climate, as speaking from a climate perspective it will generate higher emissions from the construction sector, consequently contradiction the policy focus on renovation reiterated in the Renovation Wave.