European Taxonomy and DNSH for real estate assets
At Evalore, we help developers, investors, owners, and financial institutions to evaluate the aligning your assets and projects with the European Taxonomy and demonstrating compliance with the DNSH principle (Do No Significant Harm).
What is the European Taxonomy?
The European Taxonomy is a classification system developed by the European Union to define which economic activities can be considered environmentally sustainable.
Its objective is to create a common framework that facilitates the mobilisation of investment into activities that contribute to the ecological transition, providing clear and comparable technical criteria for businesses, investors and financial entities.
In the real estate sector, the European Taxonomy has become a benchmark for sustainable financing processes, ESG reporting, risk management, and asset valuation.
For an activity to be considered aligned with the Taxonomy, it must:
- To make a substantial contribution to one of the environmental objectives defined by the European Union.
- Do not cause significant harm to other environmental objectives (DNSH).
- To comply with the minimum social guarantees established by the regulations.
Which real estate activities does it apply to?
The European Taxonomy covers different activities related to the construction sector and the real estate market.
Among the most common are:
New building construction
New build projects that must meet certain energy efficiency and environmental sustainability criteria.
Renovation and refurbishment of existing buildings
Actions aimed at improving the energy and environmental performance of buildings through refurbishment or renovation interventions.
Acquisition and ownership of buildings
Assessment of existing real estate assets to determine their degree of alignment with the requirements defined by the European Taxonomy.
Other activities in the construction and real estate sector
The European Commission establishes specific criteria for different activities linked to the building lifecycle and real estate asset management.
DNSH: Do No Significant Harm
It is not enough to contribute to an environmental goal
One of the most relevant aspects of the European Taxonomy is the DNSH (Do No Significant Harm) principle.
This principle states that an activity cannot be considered sustainable solely because it contributes to an environmental objective. It must also demonstrate that it does not generate significant negative impacts on the other environmental objectives defined by the European Union.
For example, a building may exhibit excellent energy performance and contribute to climate change mitigation, but fail to meet the DNSH criteria if it has significant impacts on biodiversity, water resources, or pollution prevention.
For this reason, the DNSH assessment requires an integrated view of the project and its environmental performance throughout its entire lifecycle.
Environmental objectives to be analysed
The role of Level(s)
A technical tool for generating information and evidence
Level(s) is a framework developed by the European Commission to assess and communicate the sustainability performance of buildings throughout their lifecycle.
Although it is not part of the European Taxonomy or a certification of compliance, it provides indicators and methodologies that can be useful for collecting environmental information and structuring evidence related to certain sustainability requirements.
For this reason, it can be used as a supporting tool within broader environmental assessment processes.
Working methodology
Phase 1 Initial diagnosis
We analyse the asset or project, the available documentation and the activities potentially subject to the European Taxonomy.
Stage 2 Technical Evaluation
We reviewed the applicable technical criteria and identified potential compliance gaps and DNSH requirements.
Phase 3 Analysis and evidence collection
We organised the necessary information to justify compliance with the assessed criteria.
Phase 4 Improvement Proposal
We define actions that will increase the asset's alignment with applicable requirements.
Phase 5
Final reportWe have prepared a technical report with the results obtained and available evidence for financing processes, ESG reporting, or decision-making.
Why Evalore?
- We are a Specialist sustainability consulting applied to real estate.
- We have worked on offices, housing, hotels, educational centres, retail premises and industrial assets.
- We manage LEED, BREEAM, WELL, SITES and Passivhaus certifications with a technical, economic, and commercial focus.
- Our methodology has helped to achieve over €500,000 saved on investment costs in a large-scale BREEAM project.
- We increase the value of your assets through sustainability.
They already trust us.
Success stories
We support national and international clients on projects where sustainability is a key consideration real value for the asset, users and investment.
Frequently asked questions about the LEVEL(S) Standard
What is Level(s)?
Level(s) is a common framework for assessing and reporting on the sustainable performance of buildings throughout their life cycle. It was created by the European Commission and predates the European Taxonomy.
2. Is Level(s) a certification?
In the uploaded documents, Level(s) is not defined as a certification, but rather as a common assessment and reporting tool or framework. Therefore, the correct terminology is to speak of alignment with Level(s) or application of the Level(s) framework.
3. How many objectives does Level(s) have?
Level(s) is based on six overarching objectives, which can be monitored using sixteen indicators.
4. How does Level(s) relate to the European Taxonomy?
Level(s) contains clear indicators and guidance which facilitate the path towards alignment with the six objectives of the European Taxonomy.
5. At which stages of the building can it be applied?
The documents indicate that Level(s) can be applied throughout a building's lifecycle and that there are 3 Level(s).
6. What does Level(s) contribute to an ESG strategy?
Level(s) allows for the sustainable performance of a building to be assessed using indicators and linked to the European Taxonomy. This helps to understand the environmental performance of the asset and to define necessary actions to improve relevant indicators, comply with European regulations, and respond to financing demands.
Other Environmental Certifications
Do you need to assess your project's alignment with the European Taxonomy?
Tell us where your project or asset stands, and Our team will help you identify the applicable criteria, assess DNSH requirements, and define the best strategy. for your property asset or project.