This instrument establishes technical criteria for classifying sustainable activities. In addition, it directs investments to assets aligned with the transition to a low-carbon economy.
In the real estate market, this initiative gains relevance in the face of the complexity of measuring environmental performance throughout the life cycle of buildings.
How does the Green Taxonomy in the real estate market influence investments and asset management?
The incorporation of ESG criteria, structured based on a taxonomy, directly impacts the risk and return analysis of projects.
Thus, assets with better environmental performance tend to have lower exposure to regulatory and transition risks, reducing, for example, the possibility of premature devaluation, a concept associated with stranded assets (Weber et al., 2020).
In this context, the Green Taxonomy in the real estate market transforms sustainability into a strategic economic factor, influencing investment, financing, and portfolio management decisions.
As a consequence, sustainable assets tend to have greater operational efficiency, greater attractiveness to occupants and greater revenue stability.
This movement reflects a growing demand for projects aligned with higher environmental standards, especially from institutional investors.
Green taxonomy in the real estate market and environmental certifications
In Brazil, this agenda advances with the structuring of the Brazilian Sustainable Taxonomy, in line with the Ecological Transformation Plan, in addition to the expansion of sustainable finance instruments.
In addition, the Green Taxonomy in the real estate market strengthens the role of environmental certifications, such as LEED, AQUA-HQE and EDGE, which standardize the assessment of the environmental performance of buildings, reduce information costs and increase the confidence of investors, occupiers and financial institutions.
Green IPTU strengthens the sustainability agenda
At the same time, fiscal instruments at the municipal level reinforce this movement by incorporating economic incentives aimed at sustainability.
The Green IPTU has already established itself as an international practice, adopted in cities such as Berlin, Dublin, Helsinki, Medellín and Bogotá, as well as in several Brazilian municipalities.
Although the models vary among cities, a common logic is observed based on incentives proportional to the environmental performance of buildings.
In São Bernardo do Campo, for example, benefits have been granted since 2008 for properties with vegetated areas.
Guarulhos, on the other hand, has more recently started to offer discounts between 5% and 20% for initiatives such as rainwater harvesting, selective collection and green roofs.
Likewise, Salvador grants reductions of up to 10%, while in Cuiabá, incentives can reach a 25% discount on property tax, which reinforces the commitment of municipalities to promoting more sustainable practices in the real estate sector.
Check out the map below with examples of Brazilian cities that adopt the Green IPTU.
The future of the Green Taxonomy in the real estate market
From an economic point of view, these instruments contribute to internalizing positive externalities and reducing the total cost of sustainable enterprises, making them more competitive.
In this way, the Green Taxonomy in the real estate market promotes a convergence between regulation, financial market and public policies, consolidating sustainability as one of the main factors of value generation for the sector.
In the Brazilian context, the trend is for this movement to strengthen in the coming years, with sustainable assets gaining increasing relevance in investment and financing strategies.
Thus, the Green Taxonomy in the real estate market should play an increasingly important role in the transformation of Real Estate and the consolidation of sustainable finance in the country.
