GREEN, GREEN, GREEN - SUSTAINABILITY IN BUILDING CONTRACTS Necessity - Basics - Subsidies - Implementation
The green wave is sweeping through the country. Not only the new federal government, in which the Party „The Greens“ play a major role, but also the European Union and private associations are pushing the pace. Climate change must be stopped. Sustainability is the trump card. The economy and private individuals must change so that the basis of all our lives can be preserved in the long term.
Real estate law is not unaffected by this movement. This is because company managers have to deal with sustainability issues by virtue of their office (due diligence of a prudent and conscientious manager, § 93 AktG, § 43 GmbHG). This raises the question of how sustainability can be implemented optimally and as quickly as possible. Sustainable building is the topic.
In the meantime, there are a multitude of regulations, announcements and draft rules on how to change the legal foundations for all our lives. What exactly has to be done to actually meet the sustainability requirement?
Implementation already begins with the drafting of contracts in the most diverse areas of real estate law. For example, it is necessary to take into account the idea of sustainability and the associated individual parameters (see below for more details) in new contracts for the construction of buildings and to make them contractually binding for all parties to the contract. This is not only a matter of bilateral contracts, but also of multilateral contracts or contracts that are interlinked in such a way that sustainability runs like a green thread through the entire value chain. Not only with regard to the possible later usability of real estate (ESG investments, i.e. environmental, social and governance), but also with regard to possible subsidies for climate, environmental protection and energy goals, sustainability is almost mandatory.
For example, the Taxonomy Regulation (Regulation 2020/852) of the European Parliament and of the Council of 20 June 2020 on the establishment of a framework for sustainable investment should be consulted. Through this regulation, the European Union intends to establish criteria for determining whether an economic activity is considered environmentally sustainable. The aim is to determine the degree of environmental sustainability of the investment (Official Journal of the European Community L 198/2019). The so-called "cradle to cradle principle" could be used as a further basis (analogously from origin to origin). Cradle to cradle or C2C represents a vision of a waste-free economy; the manufacturers of products should, as far as possible, no longer use materials that are harmful to health and the environment and, at best, only use materials that can subsequently be completely reintroduced into the cycle, i.e. generate as little (no) waste as possible - regardless of the category.
For the real estate industry, for example, this means that building materials are used that are completely recycled after use, if possible. Any waste or dumping of materials without returning them to the cycle should be avoided.
Finally, with regard to possible climate, environmental and energy aid, the European Commission published new guidelines in December 2021 ("Guidelines on State aid for climate, environmental protection and energy 2022", in short "CEEAG"). With these guidelines, the Commission wants to provide guidelines for new aid categories that can ultimately realise the "Green Deal". This includes aid for the reduction or avoidance of greenhouse gases, aid for clean mobility, aid for resource efficiency and support for the transition to a circular economy, etc.
In addition to implementing these requirements, guidelines and ideas, the question for practitioners is how to prove that sustainability has been demonstrated. Appropriate certifications can be used for this purpose. Well-known are the certifications by and through DGNB (German Sustainable Building Council), LEED (Leadership in Energy and Environmental Design, developed by the US Green Building Council) as well as BREEAM (certification body from the UK, Building Research Establishment Environmental Assessment Method). This also includes, in the broadest sense, the so-called BIM method (Building Information Modelling) and the Smart Building.
In order to reflect this new development in contracts in the real estate industry, it is advisable in any case to review and adapt contracts to this end and, if necessary, to agree on special contractual conditions with regard to sustainability and sustainability criteria. This does not only apply to pure construction contracts, but also to contracts with project taxes, project developers, architects and planners, but also other consultants. Such criteria should also be included in corresponding audit contracts. Contracts should be awarded on the basis of these sustainability requirements. Lease contracts should take sustainability aspects into account, in the long term and adapted to new developments and findings.
It seems urgent to address these issues and to implement them in contractual practice. Those who do not deal with these issues now will be left behind for some time to come. It should not come to that.
Dr. Dieter Jasper, lawyer
Düsseldorf, 14 January 2022