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Impact of the European Green Deal on the real estate industry

Sustainability is one of the issues that will play a major role in future – including in the real estate industry. Maria Hill, Director Sustainability & Corporate Communications at ECE, talks about sustainability in the era of the coronavirus, the European Union’s Green Deal, and the role of renewable energy sources at ECE.

What is the Green Deal?

In Ursula von der Leyen, the president of the European Commission, we have a woman leading Europe who is bringing the issue of sustainability to the forefront through her Green Deal – despite the ongoing coronavirus pandemic. The set of policy initiatives presented by the head of the Commission as the “European Green Deal” aims to reduce net greenhouse gas emissions in the EU to zero by 2050, making it the first continent to become climate neutral. This also includes sustainability in the financial system, i.e. how can we steer financial flows towards sustainability? Applied to the real estate industry, the question is how can funds be directed towards the sustainable refurbishment of existing buildings, for example. This is because existing buildings are the biggest problem. More than a third of the CO2 emissions in Germany are attributable to the operation of buildings. This means reducing CO2 emissions by existing buildings is the number one issue.

Energy efficiency refurbishment roadmap 

To this end, we at ECE will be drawing up an energy efficiency refurbishment roadmap. Our colleagues from Facility Management, Architecture & Construction, and the sustainability team are working on this together with the University of Dresden. The Alstertal-Einkaufszentrum (AEZ) shopping center in Hamburg will serve as a pilot project. The objective is to create a kind of blueprint with measures for how we can refurbish existing centers to make them more energy efficient.

How can CO2 emissions from existing buildings be reduced?

Increasing properties’ energy efficiency is the key here. And a reasonable way to offset emissions through the use of certified green power and biogas. Energy efficiency can primarily be increased by reducing consumption of energy used for heating, cooling, ventilation, lighting, and electricity. At ECE, we are constantly working on making our properties more and more efficient, for example through new lighting concepts, new ventilation concepts – and we always replace equipment with the latest versions that have higher efficiency classes. In addition, all of our shopping centers are completely powered by green energy. So we are already doing all of these things. But the real question is the big picture. How do we achieve the objectives set by European and national governments? In other words, where do our properties actually need to be in 2030 at the intermediate target or in 2050?

CHP unit for ECE campus and AEZ

At the same time, we’re taking a very close look at the topic of heating, particularly district heating. We are going to install a combined heat and power unit that will be operated with biogas here at the Hamburg location, on the campus and for Alstertal-Einkaufszentrum. This will result in savings of 1,400 tons of CO2 annually. This is an important pilot project for us. It goes without saying that CO2 pricing also plays an important role in this respect. This is where ecological and economic aspects go hand in hand.

Cradle to cradle construction solutions 

In this context, the “cradle-to-cradle” model is another approach we are pursuing – in other words, a sustainable recycling strategy without any waste. Our plan is to give cradle-to-cradle products preferential treatment in all of our activities. Unfortunately, they aren’t yet available in the broad variety we require. An important aspect is this respect is for ECE to acquire expertise in the field of sustainable construction solutions – with employees who are responsible for issues such as cradle to cradle.

Smart building design fosters electric vehicle concepts

In light of increasing urbanization, naturally the traffic and emission problems in within metropolitan areas are also growing. This trend always plays an important role in our planning. That’s why we are developing intelligent and sustainable mobility concepts individually for each property. In addition to excellent access to public transportation, installing the necessary charging infrastructure for electric vehicles, car and bike sharing solutions, and infrastructure for bicycles and e-bikes play a key role.

Shopping centers are helping expand the charging infrastructure for electric vehicles

Only ten years ago, barely anyone had ever driven in an electric vehicle. But things are different today. We’ve brought valuable expertise into the company and are constantly expanding and improving it. For example, we’ve published a manual on how to expand the charging infrastructure for electric vehicles at our centers that answers questions like: Where do I put the parking spaces? What are the costs? What operator models exist? We now have a total of 283 charging stations at 53 shopping centers in Germany alone. Our goal is to install charging stations in all our centers throughout Europe by 2025. And for our employees at the ECE campus in Hamburg, we’ve already equipped 72 parking spaces with the necessary charging infrastructure for electric cars.

Pilot project: sustainable facade prevents smog

In addition, ECE tests an Ouranti-NOx facade at our ECE campus, that binds harmful nitrogen oxides. They are turned into nitrate, a fertilizer that is washed into the ground with the rainwater. The quantities are so small, however, that it doesn’t result in a harmful overconcentration in the soil. The people who work behind this facade are a second important aspect. How much of these nitrogen oxides enter the building through the facade and are inhaled by employees? Things are looking very positive so far in this case as well. The third aspect is the amount of cooling needed. The innovative building envelope can reduce the need for cooling due to the sun shining on the building by up to 80 percent in the summer. This is an aspect that will play a major role in the future. Due to climate change, the world is getting warmer and warmer. That means we have to increasingly cool our buildings. Cooling means energy, and energy means CO2 emissions.

We are purchasing an increasing amount of renewable energy

The three main renewable energy sources are solar power, wind power, and geothermal energy. We always assess which of these could be suitable for every project we develop. Wind turbines are generally not relevant to our properties. They also cause unwanted vibrations. When it comes to solar power, the entire industry in Germany faces a huge problem, namely trade tax disadvantages. This refers to the following: In general, trade tax does not need to be paid on rental income. But as soon as a property generates additional income from another source, trade tax needs to be paid on all of its rental income. This obviously doesn’t exactly promote the expanded use of solar power. And geothermal energy doesn’t play a significant role either. In summary, you can basically say that the range of renewable energy sources that can be considered for a property is extremely limited. That’s why we are purchasing an increasing amount of renewable energy – be it for heating or electricity. Furthermore, we want to be honest and not engage in greenwashing. Our focus is on purchasing high-quality certified green energy and biogas.

In order to achieve our climate targets and help shape measures taken across society, ECE is engaged in a dialogue with politicians through various associations. On these committees, we can provide policymakers with first-hand reports from the field. In the process, we are always focused on solutions. The main question is how do we get the right political goals implemented in the world? The real estate industry has already come quite far. We’ve already picked the low-hanging fruit, so to speak. Now the focus is on achieving the next set of goals. And that is going to be an extremely tough nut to crack, and it won’t be possible without adequate political support.

Maria Hill

Maria Hill studied business administration and has been with ECE since 2003. In various functions, she was responsible for establishing and expanding sustainability within the company. At the same time, Maria Hill was, among other things, committee chair for sustainability in the International Council of Shopping Centers (ICSC) and has been committee chair for energy and building technology in the Central Real Estate Committee (ZIA) for the past three years.