A Comparative Analysis of ESG Measures in Real Estate in Germany, Austria, and Switzerland for 2019-2021
A Comparative Analysis of ESG Measures in Real Estate in Germany, Austria, and Switzerland for 2019-2021

Author(s): Dominika P. Galkiewicz, Bernd Wollmann
Subject(s): Social Sciences
Published by: Udruženje ekonomista i menadžera Balkana
Keywords: SDG; ESG; Sustainability; Taxonomy; Real Estate; UN; EU; EPRA; NFRD
Summary/Abstract: In recent years, the issue of sustainability has evolved from a voluntary environmental issue to an increasingly comprehensive set of regulations. The Non-Financial Reporting Directive (NFRD) and the upcoming Taxonomy Regulation of the European Union (EU) are two examples of such regulations. EU taxonomy reporting is gradually becoming mandatory for more and more companies – these regulations include rules for environmental, social, and governance (ESG) factors, and have a significant impact, especially on the real estate industry and its stakeholders. The goal of this study is to evaluate how consistently the 55 largest real estate companies in three European countries have disclosed information on topics such as employees, social factors, and governance issues, in addition to environmental concerns, between the years 2019 and 2021. Large companies are often better prepared for this because they have the resources and expertise for professional reporting. Regardless of the size of the company, however, the biggest challenge is still the lack of standardization. The reporting on the following metrics has undergone significant changes during the observed period (2021 compared to 2019): E-measures: which standards are used (+260%), EPRA recommendations (+180%), Scope 3 t CO2e (+120%), S-measures: employee satisfaction (+100%), employees with permanent contracts (+67%), salary ratio of woman to man (+55%), G-measures: own Sustainability Performance Index (+350%), UN SDG‘s included in the report (+300%), and Board Compensation tied to Sustainability measures (+150%). It is crucial for individuals, organizations, and politicians proposing new sustainability reporting regulations in Europe to recognize that overly complicated rules may not be followed entirely. Additionally, it is essential to maintain a consistent EU taxonomy reporting approach that is simple to implement in the future, regardless of the industry and the size of the company.

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