Fit for purpose: Examining SFDR and the nonlisted real estate industry
Real estate accounts for 3 percent of total financial capital; however, as it stands, the industry accounts for a substantial 39 percent of total carbon emissions. As a result, regulation supporting a net-zero built environment has the capacity to greatly accelerate decarbonisation, not merely of real estate investment, but of the economy and society as a whole.
The EU Action Plan on Sustainable Finance, encapsulated within the Sustainable Finance Dis closure Regulation (SFDR), aims to redirect capital towards sustainable investment through the introduction of common reporting and disclosure standards.
Promoting transparency on sustainability issues across the financial markets, it cannot be disputed that SFDR represents a major opportunity to effect meaningful change. However, The European Securities and Markets Authority (ESMA) has noted that the framework is designed to capture a snapshot of static investments, which can easily be traded. The nature of rea