Sustainability is set to become the «courant normal» in the property industry. From building regulations to disclosure obligations, the industry is navigating a complex network of requirements. In a dialogue with Rebekka Ruppel and Johannes Gantner, we shed light on the role played by sustainability labels and reporting standards and the extent to which Germany and Switzerland deal with the issue differently.
The sustainable development of the property industry is based on numerous building blocks. In addition to standards and regulations, sustainability certificates, benchmarks and reports are also important parameters. In dialogue with Rebekka Ruppel, CEO of pom+Germany, and Dr. Johannes Gantner, Partner and Head of Sustainability & Performance in Switzerland, we discuss different approaches to a sustainable property industry.
You deal extensively with sustainability certificates and reporting standards in the property industry. For whom are they relevant and why?
Johannes Gantner: Sustainability labels are primarily of interest to property owners, portfolio holders and portfolio or asset managers. They help them to externally verify internal sustainability efforts and serve as quality assurance. But of course they are also relevant for tenants by assessing the basics of wellbeing, comfort and well-being or supporting their own sustainability strategies in a commercial context.
Rebekka Ruppel: They are also an important tool for compliance with the applicable regulations (especially for financial market participants) and for financing new construction and refurbishment projects. Sustainability labels can also simplify entry into the Global Real Estate Sustainability Benchmark (GRESB) and significantly improve the result.
Are there measurable ecological or economic benefits from the use of such labels?
Johannes: Sustainability labels make successes visible and create a basis for discussion about improvements. They also increase the attractiveness of properties and can boost the productivity of users. Many large corporations such as Google therefore pay premiums for sustainable buildings. Studies from Switzerland show that certified buildings increase in value by 3 to 5.0 per cent, which makes them particularly attractive for investors.
Rebekka: Labels also offer other advantages. For example, they serve as an important orientation aid. How from current reports of the German government, the bureaucratic burden will reach a new record level in 2024. This leads to many uncertainties in the industry. Certificates and standards can help to filter out the relevant requirements. And, of course, in many cases they can also help realise higher rental prices.
What role do international standards and certifications play compared to national labels?
Rebekka: International standards are often formulated more softly and do not always meet the high requirements in the DACH region. There are few synergy effects between national and international labels, as the latter are not tailored to specific locations. National labels are better adapted to local construction processes and usually recognise each other.
However, there are also differences in the DACH region. Just think of the Corporate Sustainability Reporting Directive (CSRD) as a new reporting obligation in the EU. It is not mandatory for Switzerland.
Rebekka: This EU directive affects all companies that have a subsidiary in an EU country. In this respect, it is also relevant for many organisations in Switzerland.
Johannes: To date, Swiss companies have often based their sustainability reporting on the Global Reporting Initiative (GRI). This standard provides a comprehensive framework for systematically and transparently documenting environmental, social and economic impacts. This makes GRI an important counterpart to CSRD in this country.
Who is stricter when it comes to certifications? Germany or Switzerland?
Rebekka: Germany is definitely stricter! This is reflected, among other things, in the number of criteria that have to be verified. A DGNB certificate, for example, requires up to 80 points, while the comparable SNBS label in Switzerland only includes around 50 criteria.
Johannes: Legislation in Germany is much stricter due to the European Union's Green Deal and the pressure on portfolio owners is correspondingly higher. Switzerland first scrutinises the regulations from afar and then usually adapts them with a pragmatism that is unique to the Swiss Confederation.
In other words, is Switzerland taking climate protection less seriously than Germany?
Johannes: No, you can't say that. Switzerland is aiming for climate neutrality by 2050, but is taking a different approach. The political system enables direct citizen participation. In the past, it has been shown that the sovereign reacts sensitively to interventions in personal and economic freedom, which leads to rejections such as the 2021 CO2 Act. However, there has been a lot of progress at regional level: cantons such as Zurich, Vaud and Basel-Stadt have all adopted individual climate strategies and CO2 reduction measures.
Germany is currently making headlines with funding programmes. Which programmes are particularly popular?
Rebekka: The first thing that comes to mind are the KfW programmes from the Kreditanstalt für Wiederaufbau. They offer low-interest loans and grants for energy-efficient new buildings and refurbishments and promote investments in renewable energies. Then, of course, there are the BAFA subsidy programmes from the Federal Office of Economics and Export Control. There are grants for individual measures such as replacing heating systems or improving the building envelope. The Energy Saving Ordinance (EnEV) and the Building Energy Act (GEG) should certainly not be forgotten either. They help building owners to fulfil or exceed the legal requirements.
Sounds like a colourful bouquet of options. Similar to the multitude of sustainability labels...
Rebekka: I welcome the diversity. This also gives smaller companies the chance to become certified without ruining themselves financially.
What role do technological innovations play in meeting sustainability standards?
Johannes: In Switzerland, sustainability is seen as an integral part of the innovation process and technological development is part of good corporate governance. Digital technologies such as BIM models and smart metering play a major role in collecting data and measuring changes. However, there is also an increasing trend towards "low-tech" approaches to reduce energy consumption and focus on structural sustainability.
Rebekka: This is similar in Germany, but we place a stronger focus on the strategic planning and implementation of research and innovation policy to achieve sustainability goals.
In the first part of our blog series, we talk about the agony of choice and the question of which sustainability label suits which property.
Dr. Johannes Gantner is a partner and member of the Executive Board at pom+. He is responsible for the Sustainability & Performance service area in Switzerland and specialises in the sustainable certification of real estate.
Rebekka Ruppel is CEO of pom+Germany and supports property owners and portfolio holders in optimising their ESG performance. As Chairwoman of the ZIA Transparency & Benchmarking Committee, she is committed to the economically sensible implementation of EU regulations and attaches particular importance to balanced proportionality.