Article 8 / Article 9 (SFDR): Key SFDR articles defining finance products as "Green," "ESG," or "Sustainable."

  • Article 8: Requires pre-contractual disclosure of actions addressing Principal Adverse Impacts (PAIs), detailing ecological and social aspects used to promote the product. Funds adopting principal adverse sustainability indicators (PASIs) can qualify, but must integrate sustainability risk indicators into investment decisions. Source

  • Article 9: Defines funds with sustainability or carbon emission reduction objectives, requiring specific indices to prove sustainability and good governance practices. Carbon reduction funds must reference an EU Climate Transition or Paris-aligned Benchmark. Source

Both articles align with the EU Taxonomy effective 1.1.2022, with additional Regulatory Technical Standards (RTS) from 1.7.2022.

Assets are real estate elements, including portfolios, sites, land, external spaces, buildings, and equipment.


A building is a roofed and walled structure built for permanent use for different purposes.

BIM is a standard for generating and managing the digital representations of physical and functional characteristics of built assets.

Building Research Establishment Environmental Assessment Method (BREEAM) is originally, UK-based and one of the world's leading sustainability assessment methods for masterplanning projects, infrastructure, and buildings.

BREEAM assesses and rates the sustainability and environmental performance of buildings based on various categories, including energy, water, materials, waste, pollution, health and well-being, management, and ecology. The assessment provides a comprehensive framework for building owners, designers, and developers to measure and improve the environmental credentials of their projects.


An amount of money spent to acquire or upgrade assets (such as buildings, machinery, and equipment, vehicles) in order to increase the capacity or efficiency of a company for more than one accounting period.

Refer to Gabler (2021): Gabler Wirtschaftslexikon. CapEx. Gabler Wirtschaftslexikon for more.

Costs emerging from any kind of pricing scheme on greenhouse gas emissions (tax, emission certificates...). Also used in terms of (social) costs due to greenhouse gas emissions as a consequence of climate change impact. Without a carbon price, actual societal costs of carbon emissions (e.g. due to increased risk of natural disasters) are not included in the price of a product or service. Economist would say, the costs are externalized (since the producer does not have to bear these costs). A carbon pricing scheme tries to include these implicit costs into the price of a product or service, granting a competitive advantage to low carbon products and thus steering decarbonization.

Source: Worldbank

In the real estate sector, usually defined as amount of carbon emissions per reference area per year (e.g. gross internal area, net rentable area, gross floor area, etc). It enables the comparison of differently sized buildings but also whole portfolio over time. Typically used units are kgCO2e(m²*yr) or just kgCO2e/m².


Action / scheme to remove carbon from the atmosphere or avoid emissions in order to compensate for own carbon emissions. Examples of projects for carbon removal include re-forestation, forest protection measures or active carbon capture and storage (CCS).

A research project translating Paris Agreement targets into real estate emission and energy reduction pathways.

  • Pathways: A set of emission and energy targets for each year until 2050 differentiated by country and building type. Pathways were calculated based on base year (2020) average annual emissions per floor ('carbon intensity') and remaining real estate sector emission budget to reach 1.5°C global warming limit.

  • Methodology: Benchmarking current and future carbon intensity of buildings and portfolios against targets. Calculation of carbon intensity is based on gross internal area (IPMS 2)

  • Stranding Year: When a building no longer meets emission targets.

See CRREM homepage for more.

The Common Data Model is an initiative of Microsoft and various partners from different industries and provides a shared data language. Data and its meaning are made available in different contexts and hence form the basis for new applications.


Decarbonization is the process of reducing carbon emissions.

It is a non-profit organization based in Germany that promotes sustainable and environmentally friendly building practices.

The DGNB certification system provides a framework for assessing and certifying the sustainability of buildings and urban districts. The DGNB certification evaluates various aspects of a building or development project, including environmental, economic, sociocultural, functional, and technical criteria. These criteria cover factors such as energy efficiency, resource conservation, water management, indoor air quality, site selection, and the overall life cycle of the building.

Heat, in form of warm water or steam, is often distributed via underground networks to end-users for space heating and warm water generation. The heat can either be a by-product of industrial processes ("waste heat") or a by-product of electricity generation.

Instead of generating only electricity (and wasting a lot of heat energy) like in a regular power plant, a cogeneration plant produces electricity and useful heat that is fed into a district heat network.

Efficiency is higher than in a normal power plant (more useful energy per input unit of fuel). Emission factors of the generated electricity and heat depend on the used fuel which can be gas, oil, waste etc. and the applied methodology to allocate the emissions to electricity and heat.

Do No Significant Harm (DNSH) within the EU Taxonomy refers to a set of criteria that an economic activity must meet to be considered environmentally sustainable. These criteria ensure that the activity does not cause significant harm to the objectives of the EU Taxonomy Regulation.


Embodied carbon refers to the greenhouse gas emissions related to the manufacturing, transportation, installation, maintenance, and disposal of building materials.

Emission factors are conversion factors that describe the amount of greenhouse gas emissions related to a certain amount of resource consumption (energy consumption, water consumption, waste generation). Regarding energy consumption, emission factors for example have the unit kgCO2e/kWh.

Emission factors for
fuels are more or less constant and similar for different countries.

Emission factors for electricity and district heating are far more complex. They vary based on the energy mix used in a specific country (or region) to produce electricity and heat in a particular year.

Classification scheme of greenhouse gas emissions established by the Greenhouse Gas Protocol.

Scope 1: (Direct) Emissions from burning fuels (and fugitive emissions) from owned or controlled sources (for space and water heating or from a company's cars)

Scope 2: (Indirect) Emissions from bought ("procured") electricity, heat or steam (see district heating)

Scope 3: Emissions from bought goods and services, business travel, commuting, waste disposal, investment, leases objects and franchise (all upstream and downstream activities). In the real estate sector, we usually have to differentiate between landlords and tenants and their typical roles in procuring energy. Usually, the tenants procure electricity. From the landlord perspective, emissions related to this electricity consumption are scope 3 emissions, from the tenant perspective scope 2 emissions. Generally, Scope 3 emission also include other emissions from the whole life-cycle of buildings including construction, maintenance and demolishment.

One objective if this classification is to avoid double counting of emission in emission inventories. For example, the direct emissions from burning fossil fuels in an electricity plant are the scope 1 emissions of the owner of the electricity plant. These emissions are scope 2 emissions from the perspective of a company who buys and consumes this electricity.

Energy used to heat, cool, or power real estate. The consumption is measured in units of energy like kWh, Btu, MJ. (in contrast to energy intensity which normalizes energy consumption by dividing it by a nominator such as the building area).

Energy consumption includes energy that was generated and consumed on-site. It does not include energy that was generated on-site and exported (see Net energy demand).

Energy demand intensity displays the energy demand per m2 , enabling the comparison of differently sized buildings and portfolios.

An Energy Performance Certificate (EPC) is a document that rates a building's energy efficiency. The rating scale of A-G is commonly used for EPCs in many countries, particularly within the European Union.

The certificate provides an overview of the building's energy consumption, potential savings, and recommended improvements to enhance its energy performance. The EPC is required by law when a building is constructed, sold, or rented, ensuring that potential buyers or tenants are informed about its energy performance. This certificate not only helps reduce energy consumption and carbon emissions but also serves as a valuable tool for comparing the energy efficiency of different properties. EPC can be either based on a theoretical modeling of a buildings energy needs (demand-based) or on actually measured, historic consumption values (consumption-based).

Energy retrofits refer to measures, including refurbishments, replacements, installations, as well as other structural changes, aimed at significantly enhancing the building's energy efficiency.

The objective of these retrofits is to reduce the building's energy consumption and, subsequently, its related carbon emissions. These alterations often involve upgrading or installing energy-efficient systems, optimizing insulation, utilizing smart technologies, and adopting renewable energy solutions.

Reporting and scoring system currently under development (led by Union Invest and BELL consultants).

Source -  ECORE

Regulatory framework intending to increase the transparency regarding ESG aspects, enabling stakeholders to clearly identify sustainable economic activities and helping to direct capital to "green" products. The Taxonomy comes with specific rules on which “economic activities” (including the acquisition and ownership of buildings but also new construction and measures during the buildings lifetime) are sustainable. The Taxonomy does not forbid any activities but offers a classification scheme.

The EU denotes an economic activity that complies with the requirements of the Taxonomy as "aligned". Only certain economic activities can be regarded as sustainable at all (“eligible”). Real estate related fields of action fall into category 7 and include 7 sub-categories: 7.1. New construction, 7.2. Building renovation, 7.3-7.6. Individual measures & professional services (including the installation of EV charging stations), 7.7 Acquisition and ownership.

This is an EU-wide platform that facilitates investors’ access to company data, including sustainability information.

The Action Plan of the European Commission on the Capital Markets Union sets the establishment of the European Single Access Point (ESAP) as the first action. While the ESAP regulation is yet to be adopted and the infrastructure yet to be developed, some companies created dedicated data portals where investors and stakeholders can access and extract the relevant ESG data they need. The development of ESAP will build on existing EU initiatives such as the findings of the European Financial Transparency Gateway (EFTG) pilot project and will complement existing initiatives such as the Business Registers Interconnection System (BRIS).

Source: EFRAG

External space is an open space within a site not occupied by a building.


A floor is a structure dividing a building into vertical levels.

The floor area is the sum of all areas within the perimeter of the outside walls of each floor.

The floor area ratio is the ratio between the total floor area of the building and the floor area of the building.

Leakages of certain gases that are used in cooling devices (air conditioning and refrigerators (especially relevant for food retailers). These gases usually have a much stronger impact on global warming than CO2.

Also refer to: global warming potential.


gif is a German association, which provides guidelines for real estate data exchange. For more information, see

The Global Warming Potential is a measure developed to allow comparisons of the global warming impacts of different gases. Specifically, it is a measure of how much energy the emissions of 1 ton of a gas will absorb over a given period of time, relative to the emissions of 1 ton of carbon dioxide (CO2).

A green lease contract is a type of rental agreement between a building owner and tenant that incorporates energy efficiency and sustainability provisions.

It encourages both parties to collaborate on reducing the property's environmental footprint by setting targets for energy consumption, water usage, waste management, and other sustainability factors. As part of the agreement, tenants typically share their energy consumption and sustainability performance data with the building owner, enabling both parties to monitor progress, identify areas for improvement, and ultimately achieve better environmental outcomes within the property.

The Greenhouse Gas (GHG) Protocol is a multi-stakeholder partnership of businesses, non-governmental organizations (NGOs), governments, and others convened by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD).

GHG protocol supports emission reduction efforts, amongst others goals.

A global framework providing standards, guidance, tools and training for business and government to measure and manage greenhouse gas emissions. The GHG protocol is mostly cited when it comes to the allocation of emissions to an emission scope (1, 2, 3). See Emission Scope.

Source -

GRESB is a widely recognized global standard for assessing and benchmarking the ESG performance of real estate portfolios.

It was established in 2009 to provide real estate companies and funds with a framework for evaluating and improving their sustainability efforts. GRESB assesses various aspects of sustainability within the real estate sector, including energy and carbon emissions, water usage, waste management, building certifications, stakeholder engagement, and corporate governance. Real estate entities voluntarily participate in the GRESB assessment, and their performance is evaluated based on comprehensive ESG criteria and a comparison against peer groups.

The total floor area contained within the building measured to the external face of the external walls.

Gross Internal Area is the area of a building measured to the internal face of the perimeter walls at each floor level.

The definition is aligned with the area measure 'IPMS 2' as defined by the Royal Institution of Chartered Surveyors (RICS). In a stranding risk analysis according to the CRREM framework, GIA is used as denominator to calculate carbon and energy intensity values.


Companies can set an internal carbon price (ICP, also knows as “Shadow price”) voluntarily to value the cost of a unit of CO2 emission.

This price varies depending upon the individual company’s objectives. ICP is a strategic planning tool that when implemented correctly can help organisations in the transition to a low-carbon economy, as the mechanisms impact price structures of investment alternatives and the collected fees can be used for efficiency measures.


Key performance indicators evaluate an organization's success or the success of a particular activity (such as projects, programs, products, and other initiatives) in which it engages.

In order to measure the global warming impact of greenhouse gases other than CO2, emitted amounts are converted to the unit of CO2 equivalents by considering the specific global warming potential (GWP) of each greenhouse gas.

For example, the GWP of methane (CH4) has a value of 28. This means that one kg of CH4 emitted has the same impact on global warming than one kg of CO2. An emission of 1 kg of CH4 corresponds to 28 kgCO₂e. Refrigerants for air conditioning and refrigerators are the main source of non-CO2 gases with high GWP emitted in the real estate sector.


The land is a portion of the earth's solid surface distinguished by boundaries or ownership.

Leadership in Energy and Environmental Design (LEED) is a globally recognized green building certification system and rating program developed by the U.S. Green Building Council (USGBC).

LEED provides a framework for designing, constructing, operating, and certifying buildings and communities with a focus on sustainability and environmental responsibility. The LEED certification process evaluates buildings and projects based on various criteria, including energy efficiency, water conservation, indoor environmental quality, materials selection, sustainable site development, and innovation in design. Buildings can achieve different levels of certification: Certified, Silver, Gold, or Platinum, based on their performance and compliance with specified sustainability standards. LEED-certified buildings are designed to reduce environmental impact, conserve resources, enhance occupant health and comfort, and lower operating costs. The certification encourages the use of renewable energy, efficient water systems, recycled materials, and sustainable building practices to create environmentally friendly structures.


The EU Energy Performance of Buildings Directive (EPBD) requires all new buildings by the end of 2020 (public buildings from 2019) to be nearly zero-energy buildings (NZEB).

According to Article 2 nearly zero-energy building means a building that has a very high energy performance, as determined in accordance with Annex I. The nearly zero or very low amount of energy required should be covered to a very significant extent from renewable sources, including sources produced on-site or nearby.

Net asset value refers to the actual enterprise value or property value. It is calculated as the difference between a company's total (property) assets (sum of market values) and liabilities.

Net energy demand refers to the total energy consumption minus on-site renewable energy generation.

While on-site renewables contribute to overall consumption, they don't affect operational carbon emissions. Feeding energy back into the grid further lowers net energy demand.

The net internal area is the gross internal area less the floor areas taken up by lobbies, enclosed machinery rooms on the roof, stairs and escalators, mechanical and electrical services, lifts, columns, toilet areas (other than in domestic property), ducts, and risers.

NPV is the difference between the present value of cash inflows and the present value of cash outflows over a period of time. It depicts profitability of a projected investment or project based on selected discount yield.

Net rentable area is the space within the leased unit that’s actually available to the tenant for use.

Balance of greenhouse gases emitted and removed from the atmosphere sums zero. "Buildings reach net-zero when the energy efficiency is very high and the emissions are offset." (Source)


Piece of property registered under a numbered ownership with the land registry.

The Paris Agreement is a landmark international treaty within the United Nations Framework Convention on Climate Change (UNFCCC) that was adopted in 2015 and entered into force in 2016.

Its primary objective is to address global climate change by limiting global warming to well below 2 degrees Celsius above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5 degrees Celsius.

A set of annual targets on emission or energy intensity (usually until 2050). Companies can use the CRREM pathways or define their own pathways for portfolio decarbonization.

Primary Energy: Energy in natural resources (fossil fuels, nuclear, wind, solar, hydro, biomass) before conversion to usable forms like electricity or heat. It includes losses from conversion and distribution inefficiencies.

Primary Energy Demand (PED): Featured in Energy Performance Certificates (EPCs) and as a key indicator in the EU Taxonomy, PED provides information on a building's energy efficiency.

Article six of the SFDR outlines a Property Attribute Index (PAI), which requires financial market participants to disclose sustainability impacts using the Regulatory Technical Standards (RTS).

Investee companies must report on fourteen core indicators covering areas like climate, environment, social, employee, human rights, anti-corruption, and anti-bribery. They also need to report two extra metrics from a list of thirty-three indicators. Real estate assets must report on two mandatory indicators and may choose to disclose others from a list of five additional indicators. In case PAIs are not considered, non-consideration statements must be published.


Real-estate objects are all objects related to real estate like site, land, building, external space, floor space, roof, and facade.


This initiative helps companies to set emission reduction targets aligned with the Paris Climate Agreement and provides guidance and methodologies for scientifically grounded, company-wide decarbonization goals.

It also encourages ambitious roadmaps to limit global warming, promoting a net-zero emissions energy system. SBTi focuses on company-wide emissions, while CRREM targets individual buildings. Both initiatives are aligned and partnered for consistent approaches.

Shadow pricing refers to the practice of assigning a monetary value to something whose value can only be estimated because it is not something regularly bought and sold in a marketplace.

A site is the spatial location of an actual or planned structure or set of structures. The real-estate object 'site' contains buildings, lands, and external spaces.

Refers to a building that does not meet its CRREM target.

The first year in which a building fails to meet its corresponding CRREM decarbonization target.

Sustainability is a principle of acting with a long-term perspective avoiding any depletion of natural or human resources. Usually, a breakdown into Environmental, Social, and Governance (ESG) aspects is typical.

Effective March 2021, SFDR requires financial market participants to disclose sustainability risks on websites, sales material, and annual reports. 'Sustainability risk' includes any ESG event potentially impacting investment value. Companies with over 500 employees must report Principal Adverse Impacts (PAIs) online.

  • Articles 1 & 2: Define key terms.

  • Articles 3-7: Govern disclosure of sustainability risks.

  • Article 8: Requires pre-contractual disclosure of ecological and social aspects.

  • Article 9: Defines Article 9 Funds with sustainability goals, using benchmarks like EU Climate Transition or Paris-aligned.


An initiative by the Financial Stability Board (FSB) to enhance financial stability post-financial crisis. TCFD provides a framework for reporting physical and transitional climate risks, requiring disclosures on governance, strategy, risk management, and related metrics.

Used by UN Net-Zero Asset Owner Alliance and major investors, it promotes scenario analysis of climate and social impacts. The UN Principles for Responsible Investment (PRI) recommend CRREM pathways for identifying transition risks in TCFD reporting.

A thermal envelope is everything around the building [...] to shield the internal space from the outdoors. For example, it includes the wall and roof assemblies, insulation, air/vapor retarders, windows, and weatherstripping and caulking.


Adjusts a building's energy data for occupancy fluctuations by comparing energy use during occupied and unoccupied periods. This provides an accurate representation of energy performance, facilitates fair comparisons between buildings, and helps identify inefficiencies and target energy-saving measures.


Adjusts a building's heating and cooling energy data to account for outdoor weather variations using heating and cooling degree days. This allows for accurate performance comparisons, identifies weather-related inefficiencies, and clarifies the impact of retrofit measures.

The remaining rental period of a property or portfolio is weighted according to the net rental area or the income attributable to each lease.


Values of the selected (calendar) year are compared to the previous (calendar) year.

YTD is a period from the beginning of the year to the current date. The year relates to the calendar or fiscal year, depending on the data provided.