REBEC 2025: Decoding the EU taxonomy – Key to profitable and sustainable real estate

The EU taxonomy, a classification system for sustainable economic activities that has been in effect since 2022, also affects companies operating in Serbia, regardless of the fact that our country is not a member of the European Union. How to best adapt to this complex system that aims to direct investments towards projects that meet sustainable standards was discussed at a panel at the REBEC 2025 conference. Goran Todorovic, CEO of Energy Concept, who has been working in the field of energy efficiency for 15 years, and in the last few years has also been engaged in harmonizing certificates with the EU taxonomy, explained who exactly the EU taxonomy applies to:

– The first group is large companies with over 250 employees and millions in revenue, i.e. large investors. The second group is financial markets, banks and all players that can invest money. The third group is companies in the EU and member states.

He underlined that it is important to know that the EU taxonomy applies not only to EU companies, but also to their activities outside the EU, for example in the Western Balkans, so that all countries and regions in which EU companies operate actually become part of this system.

And how do you know exactly whether you fall under the rules of the EU taxonomy?

– First, you need to check whether your activity is on the list of activities covered by the taxonomy, and then whether you meet the sustainability criteria. But in fact, if you want to participate in the “green race” and attract investors and tenants, the company must voluntarily implement these regulations and mechanisms – Todorovic explained.

– From 2028, if a company provides services to companies from the EU that are subject to international reporting and director liability rules, it must also comply with the EU taxonomy, regardless of the fact that it is not from the EU – Aleksandra Cupic, Head of the Real Estate Department at Erste Bank Serbia, continued, adding that it was important to understand that the EU taxonomy is not only a reporting system, but also a classification system for sustainable economic activities.

– For Erste Group, for example, it is the starting point on which we base our investment and lending decisions. For example, one of the goals is that by 2026, 25% of corporate financing will be sustainable, by 2027, 50% of the housing loan portfolio, and the ultimate goal is that by 2050, our portfolio will be carbon neutral – said Aleksandra Cupic.

She pointed out that the Bank uses the EU taxonomy system to make consistent business decisions, but also because it helps in everyday business, as reporting is standardized:

– This is important for sustainable lending, especially when we talk about the real estate sector, which is one of the largest sources of carbon dioxide emissions. This is financing new buildings that are among the top 15% in terms of energy efficiency in the national economy, then financing major renovations of buildings that increase energy efficiency by more than 50%, and finally financing the construction and renovation of buildings whose energy efficiency is at least 10% better than the national threshold for new buildings.

She explained that the Bank measured its impact by assessing annual energy consumption, avoided CO2 emissions and tracking the certificates of relevant projects in a database.

– We believe that ESG is not just a reporting system. When we talk to large clients, we see that many consider the EU taxonomy to be important, even a key factor for their business, and for us it is even more important because it facilitates access to capital markets and financial institutions. We are aware that the previous decade was a period of high liquidity in the market, but the situation is changing. For example, 30% of commercial real estate loans in the EU are expiring soon, which will also affect our liquidity. The higher the level of compliance with the EU taxonomy, the easier it will be for our clients to obtain financing, because we have our own goals that we want to achieve – said Cupic.

She added that climate risks were not only important for real estate, but also for cash flows and income-generating assets.

– That is why the focus on sustainability, energy efficiency and climate resilience of the portfolio is extremely important to us.

The experience of a major investor

More than ten years ago, MPC Properties, a company that builds facilities but also manages them, started sustainable portfolio management.

Jovana Cvetkovic, Director of Innovation, Technical Cooperation, Development and Facility Management in the commercial real estate sector, stated that the first step had been the introduction of LEED certification.

– It was a big challenge at the time because the concept was not known in the region. For example, we certified the TC Usce facility, which was not built according to environmental standards, with LEED, and that was an important step forward. We linked real estate development with key sustainable development goals, such as clean and affordable energy (SDG 7) and climate action (SDG 13). We introduced energy models into all procedures, policies and culture of MPC, which is reflected in all our existing and new facilities – Cvetkovic emphasized.

– Commercial real estate is a specific sector, but we treat it systematically. For reporting, we use frameworks such as GRI and REST, which allow comparison with colleagues in the industry and globally. We have committed to reducing greenhouse gas emissions by 40% by 2050, in accordance with the Paris Agreement. We have also conducted a climate risk assessment, which is rare in Serbia, and created a regional benchmark.

She added that in everyday work, the company focused on reducing gas emissions, water, waste and electricity consumption, as well as increasing the number of green certificates in the portfolio.

– Today, we already have almost all facilities with green certificates, including those with the gold standard. We believe that transparency and resilience are key. Every year, we integrate ESG principles into business plans. Our next goal is to align with the banking system for green loans and bonds, which will facilitate the financing of our projects. Finally, we want to be ready for all incoming requests, including possible subsidies from the NGO sector, in order to coordinate projects as efficiently as possible and facilitate their financing – emphasized Jovana Cvetkovic.

When to start and what are the requirements?

Goran Todorovic noted that it was better to start harmonizing with sustainability principles as soon as possible, because in the initial phase of the project, during the design, there are great opportunities for adapting solutions and achieving sustainability goals.

He also explained what needed to be harmonized in terms of the EU taxonomy when it comes to new buildings and existing ones, depending on whether they are renovated, sold, or purchased:

– For new buildings, there are three main codes that define the purpose and conditions for meeting the thresholds - climate change mitigation, water management, pollution reduction, circular economy, and the like. There are many technical requirements. For example, the first requirement is the mandatory acquisition of an energy certificate and measurement. The energy efficiency certificate must prove that primary energy consumption is at a given level, and if it is lower by 10%, the energy is “zero.”

For larger buildings, Todorovic added, those over 5,000 m², additional measurements such as tomography are required to determine whether the construction is properly executed, without infiltrations and similar problems, because all this affects higher energy consumption than planned, and these requirements apply to everything - both for new buildings and for renovations and acquisitions.

– It is also important that water and other resources are used in a way that does not harm the environment, as well as that materials are reused during construction works. Buildings must be designed so that they can easily adapt to future users or new functions. It is important that when one tenant leaves, another can easily move in and adapt the space. Connection with certification systems such as LEED and BREEAM is also important because the processes overlap, and the certificates can also be used for EU taxonomy and financial reporting – Todorovic explained.

He emphasized that “at the top,” at the decision-making level, there had to be a clear understanding of the benefits of all these processes and that it was necessary to create a system that collects and uses all data to make better decisions.

For existing buildings that are being renovated, he explained further, it is also mandatory to have an energy certificate and real-time monitoring via a facility management system.

– It often happens that there is a lot of data, but without quality analysis there are no effective solutions. Artificial intelligence can come to the rescue here, which can analyze the data and help in further improving the system – he advises.

The third category, according to him, are existing buildings that are being sold or bought, and energy efficiency thresholds also apply to them.

– In Serbia, we do not yet have some of these regulations, which makes the process more difficult for us, but we hope that they will be introduced because it is an obligation of all European countries. For example, it is important to define what NZEB (Near Zero Energy Building) is, which we do not yet have, and this further complicates the work – Todorovic stated.

The financial aspect of green investments

Aleksandra Cupic also addressed the financial aspect of green investments:

– When we talk about green investments, the most common problem is financing green construction, so green projects require subsidies and regulatory relief, as well as cooperation between banks, authorities and technical experts to scale up. However, investors must consider all risks, not just the price, because buildings that are energy efficient have a higher market value, are easier to rent out and attract more tenants.

– We support clients through customized business practices, such as lower equity requirements, longer grace periods and less aggressive monetization, and it is very important to share experiences and good practices – said Aleksandra Cupic.

Jovana Cvetkovic emphasized that for MPC Properties, a holistic approach was very important throughout the entire property management process, which involves the involvement of all stakeholders, the base, as well as relevant experts, consultants, sustainability experts and banks:

– When you have all the data, the work during the operational phase and the execution of works flows much more smoothly. Sometimes it pays to invest more in the development phase because it brings savings during later exploitation. It is all part of the circular economy. Also, I completely agree with Aleksandra that it is important to keep in mind both the financial and non-financial aspects. The key is long-term thinking and the principle of added value, because you are investing in the value of your property, while increasing your income and reducing operating costs. You also spread awareness in your community, which is an important part of a holistic approach to energy. In this way, we contribute to the Sustainable Development Goals, especially SDG 7 - accessible, clean and affordable energy.

The importance of innovation and the social component of sustainability

She added that MPC, in addition to the technical requirements for certification, always tried to introduce innovative solutions:

– For example, we plan to install solar panels on the roofs of our buildings. We have also been encouraging sustainable transport for five years. Today, we have 46 charging stations for electric vehicles. Around 400 parking spaces for bicycles and 80 for charging electric scooters and bicycles in shopping malls have been provided. In terms of reducing electricity consumption, we have switched to 100% green energy purchases, which has significantly reduced our carbon footprint. We are also working on recycling, so currently at TC Usce we recycle 312 tons of cardboard, 12 tons of glass and 400 cubic meters of organic waste annually, and we have purchased a composting machine. By participating in public calls for proposals for the green agenda, we receive subsidies from NGOs, UNDP, the Chamber of Commerce and others.

When it comes to the “G” component of the ESG principles, she stated that MPC supported management through the implementation of multi-standard procedures and ISO policies.

– We have formed an ESG committee and working groups that monitor digital and financial data on a monthly, quarterly and annual basis. This makes our job easier year after year – said Cvetkovic.

– As for the “S” (social aspect), we focus on the customer center, create campaigns for diversity, inclusion and raising awareness through education and psychological support. We involve our tenants and their families in environmental education and sustainable practices. We also collaborate on green and sustainable projects throughout the year, not only for our tenants, but also for the wider community. We organize open cinemas, eco-festivals and vegetable gardens to encourage education about the circular economy among children and adults – she stated.

Finally, Goran Todorovic pointed out that the EU taxonomy was precisely the opportunity, not only to save energy, but also to improve the planet and spread positive experiences.

– The ability to recognize new things and change through processes is important. We often don’t have enough data, but we make decisions, educate the team, collect data, identify problems and look for what can be improved. We also have opportunities such as artificial intelligence and other technologies at our disposal, and I believe that the number of companies using them for these purposes will increase rapidly – he concluded.

B. P.

Festlent d.o.o. Beograd

Erste Bank a.d. Novi Sad

Balkans Real Estate d.o.o. Beograd

Energy Concept doo Novi Sad

REBEC 2025

Erste Bank Serbia

Erste Group

MPC Properties

Energy Concept

Aleksandra Čupić

Jovana Cvetković

Goran Todorović

EU taxonomy

sustainable construction

ESG principles