Three days ago, on Monday 16 January, the European Circular Economy Stakeholder Platform (ECESP) organized its first EU Circular Talk of the year, under the title “The Taxonomy and Sustainable Finance: What does it mean for the Buildings & Infrastructure sector?”.
This session aimed at clarifying what the EU Taxonomy and the Sustainable finance trends could imply for the construction sector. Indeed, the construction value chain, especially its overwhelming majority of SMEs, has difficulty in perceiving and adapting to the concrete effects that such changes will have on their daily activities.
In the first panel, after Josefina Lindblom from DG Environment explained how the Level(s) concept contributes to the rationalisation of the European Commission initiatives on sustainability, representatives of the European Platform on Sustainable Finance and the NGO World Green Building Council reminded the state of play on the Taxonomy Regulation, notably the criteria envisaged for the Delegated Acts on Climate change adaptation and Circularity.
EBC Secretary General Fernando Sigchos Jiménez was invited to a second panel discussion with the German Sustainable Building Council and Assiduus, a German company which created its own Environment, Social and Good Governance (ESG) architecture for reporting, in order to share the current understanding and concerns of SMEs and craftsmen regarding the developing framework combining taxonomy, sustainable reporting and the desire for more circularity in the sector.
He mentioned the fact that the new rules on sustainable finance and sustainability reporting are embedded in several legislative and regulatory instruments, not only the Taxonomy and its Delegated Acts but also the Corporate Sustainability Reporting Directive (CSRD) and its reporting standards developed by EFRAG (the European Financial Reporting Advisory Group), or even the new Directive on Corporate Sustainability Due Diligence (CSDD), which requires a pragmatic, coordinated and consistent approach from the European institutions when it comes to their impact on SMEs.
He added that, as many other stakeholders and economic operators, construction SMEs and crafts are not yet fully aware of the taxonomy or have difficulty conceptualising the potential impact. About the EU Taxonomy, he underlined the great fear of SMEs that “taxonomy compliant” becomes a quality label and that their access to credit is further obstructed by these new rules when implemented by the financial sector, especially the usual partner banks. As for sustainability reporting, while SMEs are not currently the direct target of the relevant EU legislation, today SMEs fear a “trickle down” effect of the environmental and social reporting obligations of larger companies and reporting standards not taking small companies as the norm.
He concluded by saying that sustainable finance cannot be dissociated from the future of the construction sector but requires the development of tools adapted to the realities of small companies with a clear and simplified regulatory framework. Given their importance in achieving the objectives of the European Green Deal and the Renovation Wave, construction SMEs and crafts need a practical approach to the EU taxonomy and sustainability reporting.
EBC will continue to follow the development of these European legislative tools, to bring the point of view of SMEs and craftsmen in the construction industry, but also to demystify and clarify these issues for small construction companies.
|The recording of the session will be available soon.|
To know more about the European Circular Economy Stakeholder Platform (ECESP), visit the website https://circulareconomy.europa.eu/platform/en