EU Taxonomy: Evaluating the Market-Readiness of the EU Taxonomy Criteria for Buildings

Context and source

The report “EU Taxonomy: Evaluating the Market-Readiness of the EU Taxonomy Criteria for Buildings” (2021) examines how ready Europe’s building and real-estate market is to apply the EU Taxonomy to real assets. It is published through a collaboration of Green Building Council organisations (including DGNB in Germany, GBCe in Spain, DK-GBC in Denmark, and ÖGNI in Austria) and is associated with CPEA as publisher. The listed authors include Dr. Anna Braune, Seema Issar, Raphael Montigel, Dr. Christine Lemaitre, Julia Manzano, Emilio Miguel Mitre, Bruno Sauer, and Dr. Thomas Fænø Mondrup.

What the EU Taxonomy means for buildings

The EU Taxonomy is a classification system designed to steer capital towards activities that contribute substantially to climate change mitigation and adaptation, while meeting “Do No Significant Harm” (DNSH) safeguards. For buildings, this translates into technical screening criteria that investors, lenders, and asset owners may need to demonstrate when reporting on or financing “taxonomy-aligned” activities. The study focuses on whether the required criteria and evidence are currently practical to apply across typical building transactions and projects in Europe.

Method and evidence base

To test feasibility in practice, the study involved 23 financial and real estate organisations and applied the EU Taxonomy criteria to 62 real building case studies from across Europe. Using these cases, it evaluates how different activity types—new construction, renovation, and acquisition/ownership—perform when assessed against the Taxonomy’s requirements, and where implementation barriers emerge. The emphasis is on real-world documentation and data availability, rather than purely theoretical compliance.

Main findings on eligibility and activity types

Across the assessed cases, newly constructed buildings showed the highest eligibility for the Taxonomy criteria compared with renovation projects and acquisition/ownership activities. The analysis also indicates that projects with sustainability certification were more likely to meet eligibility requirements than non-certified projects. This points to structured certification schemes as a practical bridge between sustainability ambitions and the documentation demanded by sustainable-finance frameworks, particularly when actors need to evidence performance consistently across portfolios.

Data gaps as a central bottleneck (especially DNSH)

A major conclusion is that compliance is often limited not only by building performance, but by the ability to prove it. The study highlights gaps in the availability and reliability of data needed to demonstrate alignment, and notes that these gaps are more pronounced for DNSH criteria than for climate change mitigation elements. In other words, even where mitigation-related evidence is obtainable, the broader set of “no significant harm” checks can be harder to substantiate due to missing, inconsistent, or non-standardised information across markets and asset types.

Recommendations to improve market readiness

The report proposes measures to make Taxonomy application more workable at scale. Recommendations include developing digital, centralised repositories for building data to improve accessibility and reliability; improving the quality and consistency of Energy Performance Certificates (EPCs) across EU member states; and encouraging sustainability planning at portfolio level so that owners and financiers can manage compliance systematically rather than asset by asset. It also recommends transitional climate action roadmaps consistent with Paris Agreement goals for buildings under acquisition and ownership criteria, supporting credible pathways where immediate full alignment is challenging.

Role of certification and feedback on policy ambition

Certification systems such as DGNB are presented as useful tools for structuring sustainability assessment and documentation, potentially easing navigation of the EU Taxonomy’s technical criteria. The study also records concerns from participating organisations about the ambition of proposed changes in the European Commission’s draft Delegated Act, suggesting that a balanced approach may be important to enable broader market uptake while maintaining the Taxonomy’s environmental objectives.