Developers Call for More Transparency and Improved Sustainability Benchmarking

This is becoming a prerequisite in all stages, from planning and permitting and financing to construction, leasing strategy, property and facility management and an exit with a sale to investors.

Analysts say there is a need for more transparency, improved benchmarking and accountability and the integration of sustainability criteria into EU Taxonomy. This would enable developers to share a standard definition of economic activities that can be considered sustainable by the broader market. The essential aim is to help investors to make sustainable business choices and to prevent “greenwashing.”

“As ESG is more requested by business stakeholders, successful developers need to focus on elaborated sustainability criteria, which must also be embedded into their business strategies and policies. Therefore, I would say that successful and forward-thinking businesses implement ESG criteria into their strategies and policies,” comments Zsombor Barta, founding partner at the sustainability consultants Greenbors Consulting.

Many regional and national Hungarian office developers have sustainability or ESG policies in place and seek third-party accreditation systems such as the U.K.-based Breeam or the U.S.-based Leed. From an interior and staff-orientated perspective, Well accreditation is increasingly used, and developers are also utilizing building access accreditation systems such as Access4You.   

“Breeam has already extended the certification platform to show compliance with EU Taxonomy requirements,” Barta notes.

“The certification schemes from the U.S. (Leed and Well) are currently not integrating EU Taxonomy compliances, although, especially for European projects, this would be of high importance. I think that European certification schemes, like Breeam, will focus more on EU Taxonomy incorporation and compliance in the near future,” he adds.

Highest Score

The first 27,000 sqm phase of H2Offices has been awarded “Platinum” Leed Core and Shell version 4 certification with 84 points, currently the highest score yet awarded in Hungary, according to its developer, Skanska. The building also obtained the top Access4You rating at “Gold.”

Skanska says it is also committed to achieving Well Health and Safety certification for the building. Various solutions were implemented to ensure the well-being and comfort of building users, including good quality indoor air, noise-reduced workspaces, warm and friendly lighting, natural materials, easily accessible recreational facilities, and a range of services. The project’s designers are Denmark’s Arrow Architects and Hungary’s Studio IN-EX.

“Certified accessibility information is becoming more relevant for developers, landlords and owners,” comments Regina Kurucz, an architect and Well assessor. “Access4you is a certification scheme for the accessibility of the built environment. Based on their standardized assessment, it provides reliable and detailed data on the locations’ accessibility to people with special mobility, visual, hearing, and cognitive needs for free. This is good for business and a benefit for society,” she says.

Another leading Budapest office developer, Atenor, is set to deliver its latest office project, the 15,500 sqm RoseVille located in Óbuda. Designed by the Hungarian studio Artonic Design, the building is certified to Breeam “Excellent” and Access4You “Gold” levels and is ESG-compatible. Atenor was one of the first landlords in Budapest to sign so-called “green leases” in the project, according to Máté Galambos, director of leasing.

Green leases are “sustainability agreements” between landlords and tenants that provide the ability to monitor and give feedback. They aim to collaboratively reduce the environmental impact of the building and its leasable areas. Atenor isn’t alone in using them in Budapest.

“We formulate common goals and important proposals based on mutually shared values and sustainability aspirations,” says Henrietta Budai, sustainability director at CPI Property Group Hungary. “Together, we monitor and give feedback on whether the targets set in the agreement are being met,” she adds. She sees the critical component as energy consumption around heating and air-conditioning, and water use.

Breeam is, by a clear margin, the third-party accreditation system of choice with office developers in Hungary and across Central Europe.

Top Level

The first 25,000 sqm phase of the 65,000 sqm Budapest One project by Futureal has achieved Well “Platinum” certification, the highest category in the system. Hungary’s six other Well-accredited offices are all at the second-best “Gold” level. This brings the total of Well-accredited space to 167,000 sqm.

“In line with the highest Well requirements, we create unique office areas that enable tenants to create attractive, healthy and creative workplaces for their employees while they can improve their ESG performance and, therefore, their competitiveness,” says Gábor Radványi, chief architect of Futureal Development.

Sustainability accreditation is also becoming the norm in the industrial sector, with developers and park operators delivering more highly specified Breeam- and Leed-accredited complexes. As with the office market, environmental factors and market demands are acting on players at the same time.

To give just one example, the second 45,000 sqm hall (MG3) at HelloParks Maglód is completed with the developer, HelloParks (part of the Futureal group), aiming to achieve Breeam New Construction “Outstanding” certification, the highest category available.

In another certification, previously reported in the Budapest Business Journal, the common areas of Ferenc Liszt International Airport Budapest’s Terminal 2 have achieved a Well Health-Safety Rating.

“Budapest Airport became a pioneer in Europe, opening the way for travel and leisure facilities to get certified and show their commitment to social responsibility, health and safety on a large scale,” comments Kurucz.

“The Well Health-Safety Rating is designed to support business owners and operators in protecting the health of staff, visitors and other stakeholders. The inspection covers five areas: cleaning and sanitization procedures, emergency preparedness programs, health service resources, air and water quality management, stakeholder engagement and communication,” she explains.

This article was first published in the Budapest Business Journal print issue of September 8, 2023.