Impact of EU ETS & ETD on Real Estate Values

In collaboration with EPRA, JLL has conducted a study investigating the proposed EU policy changes on the Emissions Trading System for buildings and the Energy Taxation Directive. In particular, the paper focuses on the preparedness and response of listed commercial real estate companies in Europe.

November 03, 2021

Emily Chadwick, Lead Risk Advisor for ESG and co-author of the report, comments: “Legislative change is a key driver for decarbonization in the real estate industry and a major transition risk for real estate owners. The EU is leading the way in its policy proposals, in the knowledge that it cannot meet its Paris Agreement commitments without buildings. It was a great pleasure to interview so many EPRA members for the purpose of this report and we found that generally these market leaders were already on an ambitious decarbonization pathway. Nonetheless the proliferation of carbon tax and emissions trading systems developing across the globe, as shown in our paper, indicate a global shift towards carbon pricing, of which global real estate stakeholders must be cognizant in order to futureproof their strategies. As carbon pricing for buildings becomes commonplace, the already persuasive business case for decarbonization strengthens, with obvious signs from occupiers and real estate owners that rental and market value will be increasingly linked to sustainability in buildings.”

Hassan Sabir, Finance & ESG Director at EPRA, comments: “With the publication of this EU ETS & ETD study, we are confident that as an industry, we endeavour to be ahead of the curve when dealing with the critical topic of carbon emissions and the EU’s attempt to regulate the matter. As representatives of LCRE in Europe, EPRA’s mission is to investigate, analyse, prepare and represent our member’s position in such important EU initiatives. This report is part of the bigger climate change puzzle that the industry is addressing and I hope this publication, along with others in the future, help to cement the LCRE as a forward thinking, responsible industry, committed to address the huge challenge of climate change head on.”

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