EU Taxonomy as a Business Opportunity in the Real Estate Market

Challenges and Opportunities in Sustainable Real Estate Financing

Greenbors Consulting's second business breakfast of the year explored from a practical perspective how the EU Taxonomy is expected to reshape the logic behind real estate development, financing, and investment decisions. The collective takeaway from the presentations, expert panel discussion, and a survey conducted among the professional audience is that the EU Taxonomy is increasingly being viewed as a business opportunity. When applied correctly, it can improve a property's financeability, marketability, and long-term value retention.

What Does the EU Taxonomy Mean in the Real Estate Market?

As a sustainability classification system, the EU Taxonomy defines the conditions under which an economic activity can be considered environmentally sustainable. The core of the system is that the given activity must contribute substantially to at least one environmental objective, do no significant harm to any of the other objectives, and comply with minimum social safeguards.

From a real estate economy perspective, this means that a development, renovation, or property management decision becomes evaluable not only from a technical and financial standpoint but also from a sustainability angle. The taxonomy approach thus helps demonstrate how energy-efficient a building is, how consciously it manages environmental risks, what documentation proves its performance, and how well it aligns with the increasingly strict expectations of financiers, institutional investors, tenants, and owners.

Gábor Szarvas, Managing Director of Greenbors Consulting, pointed out at the event that the taxonomy is not exclusively a European phenomenon. Similar green classification systems are operating or emerging in numerous countries from South America through Africa to the Asia-Pacific region. According to him, this indicates a clear shift toward the emergence of a more unified market valuation system for sustainable investments.

It’s Not Compliance, But Late Recognition That Costs a Lot

One of the strongest messages of the event was that taxonomy compliance does not necessarily result in significant additional costs. According to Richárd Káposztás, Operations Director of the Belgian real estate developer Atenor, if the EU Taxonomy mindset is integrated right from the design phase of a real estate project, taxonomy-compliant execution typically entails no extra, retroactive costs. Atenor requires EU Taxonomy compliance for all its projects, meaning these criteria are addressed right from the project planning stage.

According to Levente Suba, Sustainability Lead at K&H Group, a major share of the expenditures required for compliance consists of items that would appear in a modern project even without the taxonomy. These include energy efficiency upgrades, high technical quality standards, documented design and construction decisions, and solutions that improve the long-term operability of the building. Furthermore, high sustainability quality and technical content reduce investment and lending risks, as these buildings retain their value over the long term.

According to András Bálinger, EU Taxonomy Advisor at Greenbors, technical compliance places far less burden on market players than many assume. The challenge most frequently lies in data and document collection, and coordinating sub-tasks. In a survey conducted at the event, 74% of participants from the real estate and financial sectors highlighted the difficulties of collecting data and documentation regarding the EU Taxonomy. Involving experts early in the implementation process helps immensely, ensuring more efficient process management and reducing frustration.

Certification is Not a Badge, But Proof of Value

The value of taxonomy compliance, along with BREEAM, LEED, and other green building certifications, goes far beyond marketing or PR effects. These systems prove that the property meets technical, energy, environmental, and usage standards that are beneficial and valuable to tenants, investors, financiers, owners, and homebuyers alike.

The quality assurance role of a compliance or certification process is also substantial. Gábor Szarvas mentioned an example where a process revealed construction defects, such as thermal bridges caused by improperly installed windows and doors. If these are uncovered in time, corrections can be made before handover, which improves both the quality and the long-term value retention of the building.

It’s Not Just Worth It for the Financing; Business Benefits Add Up

Green financing alone rarely offers an interest rate discount large enough today to fully offset the costs of certifications and higher-quality construction. However, the business value of the taxonomy should not be judged solely on interest advantages. The return on investment for sustainable development comes from a combination of several factors, including lower operating costs, better energy efficiency, easier financeability, alignment with investor expectations, tenant demand, and the long-term value retention of the property.

For banks, the proportion of green loans within their portfolios is also becoming increasingly vital. In the medium term, this could impact the risk assessment of loan portfolios and the market performance of financial institutions. Therefore, the taxonomy is a strategic consideration not just for real estate developers, but for financiers as well.

Assessing the current state of green real estate lending, Gábor Gyura, Director of HuSif, highlighted that the share of green loan portfolios has been steadily growing in both Europe and Hungary over recent years. Locally, the green real estate loan portfolio registered under the MNB (Central Bank of Hungary) green capital requirement discount scheme rose significantly from 63 billion HUF in 2023 to 280 billion HUF by 2025. European markets also experienced growth, with the European Green Bond emerging last year as a new instrument, which also applies the EU Taxonomy criteria framework.

Business Logic Varies by Segment

An important takeaway from the discussion was that the value of the taxonomy manifests differently across various real estate sectors. For office, logistics, and retail projects, the question is less about how much more a certified, sustainable property can be sold or leased for, and more about whether it will remain marketable at all without a certification. Many Western European companies already mandate that their subsidiaries lease space exclusively in certified, sustainable office buildings, logistics parks, or shopping centers.

In the residential segment, according to Richárd Káposztás, Operations Director of Atenor, the direct impact of compliance on increasing price per square meter is less tangible because private buyers' decisions are still dominated by price, utility costs, and energy performance. However, this does not mean sustainability factors are irrelevant; they simply manifest through low utility bills, higher quality, and better comfort, which influence homebuyers' daily expenses and long-term perception of value. In contrast, the role of certifications is highly amplified in build-to-rent programs and student housing developments.

Where is the Market Heading?

Based on the participants' responses to the questions, the market already senses the business significance of the taxonomy. Specifically, 45% of participants believe the taxonomy represents both a business opportunity and a regulatory challenge, while an additional 40% view it strictly as an opportunity. Furthermore, nearly two-thirds of respondents identified some form of financial benefit resulting from certification for taxonomy-compliant properties.

In the coming years, the EU Taxonomy, BREEAM, LEED, energy performance certificates, and other rating systems are expected to coexist, each holding different roles and weight. As documentation becomes mainstream, the sustainable real estate market will become fully comparable.

Developers, investors, financiers, and owners who integrate the taxonomy mindset early in the planning phase of a new building or a renovation will not only mitigate compliance risks but also create more competitive, better-financed, and higher value-retaining assets. The question is therefore less about whether sustainability compliance will be necessary in the future, and more about how it can be integrated into the real estate development process in a timely, conscious, and successful manner.