BELGIUM Trends and Developments Contributed by: Pieter Puelinckx, Yves Moreau, Melissa Verplancke and Lothar Van Driessche, Linklaters
and replaces the NFRD, in-scope companies will have to report information on the full range of ESG issues relevant to their business – in accordance with mandatory EU sustainability reporting standards based on the EU taxonomy. Voluntary actions In addition to the mandatory disclosure obli - gations at (group) corporate level, real estate companies have a range of voluntary schemes and options at their disposal to boost their ESG profile. Certification schemes A sustainability certificate is not legally required in Belgium, but there are several reasons why companies engage in obtaining the certificate. The most commonly used certification system in Belgium is BREEAM (Building Research Estab - lishment Environmental Assessment Method). It establishes an overall sustainability score for new and existing buildings. Although originally developed for the office market, the measuring method has been extended so that it can also be used for retail, industry, schools, hospitals, courts and prisons. In general terms, a BREEAM- certified building will have a higher occupancy rate as well as a higher rent value, which – for long- and mid-term investments – outweighs the additional investment costs. Other certi - fication systems that are commonly used are LEED (Leadership in Energy and Environmental Design) and the WELL Building Standard. Investors are increasingly looking at the global ESG benchmark for real assets (Global Real Estate Sustainability Benchmark, or GRESB). It aims to assess and benchmark ESG and other related performance of real assets and to pro - vide standardised and validated data to inves- tors. Each year, the Real Estate and Real Estate Development Benchmark is generated as part
of the GRESB assessments, which are guided by what investors consider to be material issues and are aligned with international reporting frameworks such as the Paris Climate Agree - ment, the Task Force on Climate-related Finan - cial Disclosures and the United Nations Sustain - able Development Goals. Against this backdrop, investors can moni - tor their investments, engage with their fund managers and make ESG-informed decisions. In Europe, in particular, investors increasingly require fund managers to achieve a sufficiently robust GRESB rating (eg, four out of five stars and/or higher than 80% scores) – failing which, they may not be prepared to invest in their funds or even look to withdraw their investment. None - theless, this remains a voluntary framework. The GRESB can be applied to companies and funds, rather than individual assets. It differs in that respect from asset-based green certifica - tion schemes that apply to individual buildings (such as BREEAM, LEED, WELL or NABERS (the National Australian Built Environment Rat - ing System)). Green (clauses in) leases Another area of development relates to green leases, under which landlords and/or tenants undertake certain obligations relating to main - tenance and use of buildings, energy and water consumption, environmental performance, etc. Green clauses in leases are becoming increas - ingly common in Belgium for non-residential buildings. The relevance thereof can be under - stood in light of the increasing importance of the obligations resulting from the Taxonomy Regulation. As such, green leases can become an asset to investors reporting against their increasingly expansive environmental and other (eg, energy efficiency and performance) obliga -
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