The role of renovation in reaching sustainability goals

May 2021

Real estate and construction have a huge impact on energy consumption, and as a result have an important role to play in helping the EU reach its sustainability goals through their Renovation Wave initiative.

Buildings with green trees

Real estate and construction are two key sectors

The EU’s most recent Circular Economy Action Plan was issued just over a year ago, and since then efforts to ensure resources are being used in the most efficient way possible has been an important pillar of the European Commission’s ongoing efforts to make the EU greener. Two key sectors in bringing this plan into action are the real estate and construction sectors, and the Renovation Wave initiative seeks to harness the huge impact each of these sectors have on energy consumption to help the EU reach its sustainability goals.

In October last year, the Commission published its Renovation Wave Strategy, which aims to double annual renovation rates for energy efficient buildings over the next decade. It builds on the ambitions set out in the “Clean energy for all Europeans” package, which requires all EU countries to publish a long-term building renovation strategy. The Renovation Wave places a great deal of emphasis on accelerating the uptake on renewable energy technologies within buildings, and the European Commissioner for energy has emphasised the Commission’s ultimate ambition to make energy efficient buildings “the new normal”.

Renovation Wave Strategy

A key role for leasing in the real estate transition

As construction and real estate are two sectors that are already served well by the leasing industry, it will clearly have a key role to play in Europe’s renovation wave. The construction equipment required for this increased amount of renovation work is often provided through leasing, which remains an important partner for investing in further equipment needs. In addition, lessors can help construction firms transition into using more energy efficient equipment for their projects, as the demand for more sustainable methods of building also escalates. Leasing firms active in funding real estate will need to prepare for an increased need for investment in sustainable buildings and renovation projects. Lessors who include real estate in their portfolios could also benefit from the wide availability of EU and national funding available for creating greener buildings. Leaseurope will be working to ensure that the importance of leasing firms as investment partners in the renovation wave is recognised and promoted within any regulatory and funding initiatives.