The European Commission’s recent pause on reporting obligations for the Corporate Sustainability Reporting Directive (CSRD) is consequential for real estate investors’ Sustainable Finance Disclosure Regulation (SFDR) compliance. Without the CSRD requirement, funders’ ability to collect asset data for SFDR disclosure becomes more difficult. Yet because real estate developers and portfolio managers have a profit-driven imperative to measure and maximise operational efficiencies, they are well positioned to meet investors’ data requirements. Particularly to secure financing for “dark green” or “light green” retail funds, as defined by the SFDR, real estate firms must continue complying with financer mandates. Jaroslav (Jaro) Mida of MINT group discusses why operating measurably high-efficiency real estate is the pragmatic choice for funders, developers and the environment in an article prepared for Property Forum by Lisa Chase (Lucky Fish Research & Communications).
Headquartered in Prague, MINT invests in and operates commercial and residential properties across Central and Eastern Europe. Jaro explains that the “greener” a building is, the higher its profitability, so designing, constructing and operating high-performing buildings is a pragmatic strategy. Determining a building’s environmental performance requires integrating measurement systems to track energy and water use. MINT collects this data directly from its commercial and residential buildings, rather than relying on tenants to share metered data. By controlling the data harvesting, MINT can ensure consistent building performance measurement for funding partners like Belgium’s KBC Group, and institutional investors such as Amundi Asset Management, Shinhan FG and Hana FG. MINT can also continuously assess the environmental and financial performance of its portfolio, while potentially adjusting building operations.
To extend the value of its operational tracking system, MINT has enlisted Walvius Partners to deploy the GRESB real estate assessment and reporting tool. GRESB allows a building’s performance to be assessed for its alignment with SFDR-defined “green” funds. Jaro emphasises that GRESB can also evaluate an entire company’s environmental sustainability, along with its assets, against a broad range of internationally recognised standards. This competence provides MINT’s funding partners with an added level of confidence that MINT’s investments are aligned with their institutional priorities. Although not required to publicly disclose its assets’ environmental performance, MINT publishes this information on the firm’s website.
While MINT’s portfolio includes renovated buildings, Jaro explains that these properties are typically not appropriate for inclusion in “green” or “light green” funds. This is partly a result of the difficulty – or in some cases impossibility – of securing accurate Energy Performance Certificates (EPCs) for older renovated buildings, because properties in most historical city centres are not allowed to be significantly altered. The EPC, specified by the Energy Performance of Buildings Directive (EPBD), denotes a commercial or residential property’s energy efficiency profile and therefore its suitability for inclusion in an investor’s SFDR-aligned “green” funds. Without a credible EPC, a bank or investor cannot reliably evaluate a building’s performance or its ability to produce operational data for SFDR compliance.
