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Top 5 ESG Trends in Nordic Real Estate


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    Kris Kolenc

The Nordics have a reputation of being some of the most sustainable (and happiest!) countries in the world. This is no exception when it comes to commercial real estate as many look to the Nordics as a leading example when it comes to how they can improve sustainability within their own portfolios.

With EVORA’s recent acquisition of the Swedish data collection company, METRY, EVORA is further expanding our support for real asset sustainability across the Nordics. From speaking with many Nordic commercial real estate companies (based in Denmark, Sweden, Norway, and Finland) and attending industry conferences like the ULI C Change Summit in Copenhagen this past October, below we highlight 5  ESG trends that we’ve observed in the Nordic commercial real estate market that can inform what’s to come in other real estate markets in Europe and beyond:


  1. Aligning ESG practices to the EU Taxonomy

The EU Taxonomy is a classification system formed by the European Commission to help define what can be considered ‘sustainable’ in the various economic sectors across the EU and reduce greenwashing. Although aligning to the EU Taxonomy is voluntary at the moment, some companies are beginning to experience increased pressure from investors and/or through their Sustainable Finance Disclosure (SFDR) Article 8 or 9 commitments, to screen for EU Taxonomy alignment, and in some cases, achieve a minimum percentage of alignment across their real estate funds.

Within Nordic real estate, however, more companies see aligning to the EU Taxonomy simply as best practice, and not just as investor or SFDR requirements. Many Nordic real estate companies are structuring their ESG initiatives around the EU Taxonomy and are ensuring that they contribute to increased alignment. Nordic momentum in EU Taxonomy screening and alignment may accelerate the uptake of this in other real estate markets.


  1. Leading Embodied Carbon Requirements

Many commercial real estate companies that have made net zero targets may have a plan for tackling their operational carbon, but are still not sure how to tackle embodied carbon. For real estate, embodied carbon includes the GHG emissions from new developments or refurbishments associated with construction, material use, transportation of materials, and demolition, for example. Some Nordic countries and their governments are leading the way when it comes to embodied carbon. Sweden for example, requires embodied carbon to be measured during the planning stage of new developments, since January 2022, and embodied carbon calculations must be submitted during the planning process. Sweden and Finland are also leading on constructing with wood which will help to reduce embodied carbon emissions and increase the chances of constructing assets that are already EU Taxonomy aligned.


  1. Some Companies Getting Ready for CSRD Reporting Ahead of Schedule

The Corporate Sustainability Reporting Directive (CSRD), was recently adopted by the European Commission as part of the European Green Deal to take over from the Non-Financial Reporting Directive (NFRD). CSRD provides a sustainability reporting framework for companies with the aim of enhancing transparency and promoting standardisation in the sustainability reporting landscape. Although there are various cohorts of companies that will be required to start CSRD reporting between 2024 and 2027 based on their size and other factors, some Nordic real estate companies that won’t be required to start reporting under CSRD until the latter years are already getting their reporting and data collection processes in place now, and conducting a double materiality assessment as required by CSRD, ahead of time, to be prepared. This emphasises the importance and complexity of complying with CSRD requirements.


  1. Data Collection and Coverage Continues to Increase, but Still a Challenge

Although the Nordics lead the world in many sustainability aspects, data collection can still be a challenge as it is in other parts of the world. Although Sweden, Finland, and Norway have public utility data hubs that can help with data collection efforts, utility data collection can still be particularly challenging in assets where tenants pay for the utilities directly and thus the landlord needs to get letters of authority signed by the tenant or go through other means in order to aggregate whole building data. With our acquisition of METRY, we plan to further develop our capabilities to support more robust data collection and coverage in the Nordics and the rest of the world.


  1. GRESB Still Seen as the Predominant Industry Benchmark

Most major Nordic commercial real estate companies participate in GRESB since they see it as the benchmark for industry best practice performance and because their investors are demanding it. The annual GRESB results provide interesting insights on how the global and continental real asset markets are performing from an ESG perspective, however, it would be interesting if GRESB was able to share further results regarding subregions, such as the Nordics. Annually, GRESB also hosts regional results events, but such an event for the Nordics has not been held since 2021, which EVORA co-hosted. It would be useful to see a Nordics specific results event held in 2024 and subsequent years.


The Nordics continue to lead the way in many areas of sustainability, but they are also not exempt from some of the challenges that the real asset industry faces as a whole, such as data collection. EVORA is very excited to be expanding our remit in the Nordics along with METRY and continue to position the region as a global leader in sustainability. If you are interested in learning more about the above trends or need support adopting them, please do contact us.


Kris Kolenc, Sales Manager, Nordics & Netherlands