On January 13, the #EUConstruction2050 members took stock of the achievements of the Alliance since its launch 3 years ago, while discussing objectives and initiatives for 2023 and the future as the #construction sector is crucial to deliver on the European Union ambitions.
Last week, the Construction 2050 Alliance gathered more than 150 stakeholders from the built environment and beyond to exchange views on Sustainable Finance and the expected impact of the EU taxonomy on the construction sector during its hybrid event held on 18 October 2022.
Considering the increasing concerns along the whole construction value chain, and to better understand the potential pragmatic implications from applying the taxonomy in the sector, the Alliance gathered experts from the financial, environmental and construction fields to discuss.
The event started with a presentation of the European Platform on Sustainable finance and its works by one of its members, Ms. Lara Muller (read the presentation). Then, Mr Hugo Gallagher, Senior Policy Advisor at the European partnership of Sustainable Investment For a EUROSIF, gave an overview on the potential consequences in the construction market from the financial perspective. The debate was lively also thanks to the participation of the World Green Building Council Director for Europe Mr Stephen Richardson, who shared their vision on sustainability and circularity in relation to financing as an environmental NGO (read the presentation).
A panel discussion also took place examining and illustrating current and potential challenging implications of the Taxonomy for construction companies. Mr. Philip van Nieuwenhuizen, President of the European Builders Confederation EBC, Mr. Bernard Gilmont of European Aluminium, Mr. José Luis Blasco of the Spanish large contractor Acciona (read the presentation) and Mr. Frank Hovorka of the French Real Estate Developers debated the inconsistency of certain criteria when applied to construction in different geographies, concerns about access to loans and credits, difficulties with reporting, under-representation of construction actors in the platform’s debates, among others.
In the closing remarks, FIEC Vice President Yiannis Markides presented the main messages of the Alliance:
The Taxonomy underlines again the construction sector’s huge potential for achieving the EU Green Deal goals.
The Taxonomy may offer a European approach of “sustainable construction” based on existing EU Regulations and European sustainability assessment standards, but some criteria should be improved, and reporting methodologies clarified.
The Taxonomy can set a new benchmark for competitiveness of the construction sector.
The Taxonomy must create the conditions of mobilising capital to support the transition to sustainable construction.
Sustainability reporting obligations under the Taxonomy must be simple and proportionate.
Non-alignment with the Taxonomy must not cut off companies from financing and funding.
The members of the Construction 2050 Alliance look forward to further exploring and clarifying strategic topics for our industry, stay tune to be informed of our next activities.
To read the full Construction 2050 Alliance messages on Sustainable Finance, click here.
Today, the Construction 2050 Alliance hosted a public event on Sustainable Finance and the impact of the EU taxonomy on the construction sector.
On this occasion the Alliance shared the following 6 key messages.
1.The Taxonomy underlines again the construction sector’s huge potential for achieving the EU Green Deal goals. The taxonomy once again underlines the industry’s enormous potential for contributing to the EU’s sustainability and climate objectives, in particular as regards circular economy, and making the block climate neutral by 2050.
2.The Taxonomy may offer a European approach of “sustainable construction” based on existing EU Regulations and European sustainability assessment standards, but some criteria should be improved, and reporting methodologies clarified. A dialogue should be established between the European Commission and the construction sector to improve problematic criteria, as well as to facilitate the exchange with industry on how to report taxonomy alignment and eligibility. Many companies lack clear guidance on how to make full use of the current standards under the climate delegated act.
3.The Taxonomy can set a new benchmark for competitiveness of the construction sector. It sends important signals out to companies about which construction products and practices they can offer to foster their competitiveness in the internal market. This will also help drive innovative solutions in construction and foster circular economy.
4.The Taxonomy must create the conditions of mobilising capital to support the transition to sustainable construction. It is important that the criteria are designed in such a way that they enable a fair assessment of construction products, systems and buildings, according to their contribution to the environmental objectives, and that they properly consider the complex nature of building solutions, therefore rewarding all manufacturing, construction and service activities necessary for the achievement of the environmental objectives.
5.Sustainability reporting obligations under the Taxonomy must be simple and proportionate. It is if of the highest importance that the reporting requirements are proportionate, and sufficient time must be given to SMEs to adapt to the new reporting rules. The Commission should provide clear guidance and even set up a Help Desk to help companies interpret the requirements they will face in reporting.
6.Non-alignment with the Taxonomy must not cut off companies from financing and funding. The C2050 Alliance believes that the ‘sustainability’ of a company should not be assessed solely based on the eligibility and alignment of its economic activities to Taxonomy. Non-alignment must not lead to discriminatory practices from investors and cut off companies from financing, at a time when the sector faces unprecedented challenges (e.g., rising material prices and costs of living of clients, shortage of workers and skills, investment needs to scale up innovative low carbon solutions, absence of low carbon infrastructures at scale, …).
The EU Taxonomy must become a facilitator of the green transition and enable the construction sector to effectively contribute to the EU’s climate targets. Non-alignment must not cut off construction products manufacturers and construction companies, especially the vast majority of SMEs composing the industry, from financing.
In a world where the sustainability of goods and processes is becoming ever more critical, it is equally imperative to identify realistic ways to finance this transition to greater sustainability.
For some years now, the issue of sustainable financing has been under discussion, with the establishment of a European Platform on Sustainable Financing to identify schemes that bring the market and different sectors more in line with the environmental ambitions of the European Union.
In this context, the ongoing development of an EU regulation on taxonomy and related delegated acts raises many questions and concerns, especially in a sector as unique as construction.
Although the European taxonomy is seen as a facilitator of the contribution of construction to the EU’s climate objectives, its concrete implementation and impact in daily activities remain unclear. Moreover, construction companies fear that a non-alignment with the taxonomy will jeopardise their business by hindering access to finance, especially for the vast majority of SMEs that make up the industry.
Join us to discuss the potential impact of the taxonomy on the construction sector! #EUConstruction2050
Last week, the Construction 2050 Alliance gathered experts and the European Commission to discuss views of the sector about the current and foreseeable challenges regarding raw materials supply, and to present suggestions on what is needed to contribute towards a digital and green recovery leading to climate neutrality by 2050.
Indeed, construction has made significant progress regarding the use of secondary raw materials, and this will continue to be a priority over the years to come. Equally, we will continue to depend on primary resources, to ensure a safe and steady supply of raw materials for the desired output. The updated EU Industrial Strategy has echoed this dependency on (domestic) raw materials while EU policies such as adaptation to climate change and the Renovation wave, as well as geopolitical considerations, triggered an increased demand for additional construction raw materials and products.
The main messages shared by the members of the Alliance during the event were:
The raw materials and construction products sectors supplying the construction industry are an integral part of the EU construction ecosystem.
A reliable and sustainable supply of raw materials and products for construction is required to achieve the objectives set in the European Green Deal, including the Renovation Wave, climate change adaptation and a green and resilient infrastructure.
While the construction sector has proven to be particularly resilient during previous crises, including the Covid-19 pandemic, the supply of raw materials should not be taken for granted and would require particular attention.
In the current geopolitical situation, it is particularly important to boost and give precedence to the supply of domestic raw materials, wherever possible and without affecting housing affordability. More so, we need to diversify external sources of supply, avoid overreliance on one supplier. This should reduce the risk of shortages in the case of future trade restrictions or global pandemics.
Delivering a meaningful and supportive framework for the further uptake of circularity in construction must become a priority. Indeed, circular economy provides further potential for the use of secondary materials and circular practices, however a stable access to primary raw materials will remain crucial in the long-term.
The EU should secure access to affordable, low-carbon energy sources as these are indispensable to guarantee a stable supply and processing of raw materials, that in turn will feed into the construction ecosystem itself.
This event included a representative panel, with the recording of each intervention being available below, as well as their presentations: