Glossary on the topic of sustainability

Explanation of frequently used technical terms

When dealing with the topic of sustainability, one comes across many terms such as EU Taxonomy Regulation, Decarbonisation, CO2 neutrality, green leases or abbreviations such as RTS and DNSH. This glossary on sustainability explains some of the most frequently used terms.



The term biodiversity describes the diversity of ecosystems, the diversity of species and the genetic diversity within a species. A broad diversity is important for intact ecosystems of a wide variety of animal and plant species and functioning cycles, such as the purification of water by microorganisms, on which humans are just as dependent as other living creatures. However, if humans intervene actively in nature, e.g. by deforesting rainforests, biodiversity can be reduced considerably and the natural stability of biodiversity lost. This loss of stability causes diseases and epidemics, among other things.

Carbon footprint

Carbon footprint generally refers to a balance sheet showing the total amount of CO2 emissions caused by activity(ies), a product or people.
Several levels can be defined as part of a building’s carbon footprint: one can calculate the CO2 footprint holistically, along the complete life cycle of the building, or - in terms of the current contribution - determine the CO2 footprint for ongoing operation. The holistic approach also includes CO2 emissions that occur for the production of building materials and the operation until demolition or dismantling. Usually, however, the CO2 footprint of a building refers to its operation. It is also used to compare the climate impact of buildings: the lower the CO2 footprint, the better the building can be classified in relation to climate targets. Accounting follows the basic principles of the Greenhouse Gas Protocol.


Circular economy ("Cradle to Cradle")

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The principle of the circular economy strives for closed material and resource cycles. The aim is to return all waste to the cycle and use it again and again as new resources. Waste in the true sense of the word is then no longer produced. The idea is not to make other inferior products from the waste (e.g. rags from old clothes), but to design the products from the outset in such a way that they can be broken down into their components again and used as new raw materials. This principle is also called "cradle-to-cradle". For the construction of buildings, this means that they can be dismantled easily  and that individual components, materials and raw materials can be reused. The digital material passport for buildings will become increasingly important in the future for this purpose.

Climate protection

The term climate protection describes activities to counteract global warming, such as phasing out coal-based power generation and switching to renewable energies. The goal is to keep global warming to a maximum of 2 degrees as described in the Paris Climate Agreement. From a scientific point of view, however, the effects of global warming can no longer be completely stopped, but only mitigated and limited. Therefore, in parallel to reducing the greenhouse gas emissions responsible for warming, steps are also needed to adapt to the already unavoidable consequences of climate change (adaptation).These can be, for example, the construction of dykes and the strengthening of civil protection.


CO₂ certificates

By buying CO2 certificates, companies can compensate for greenhouse gas emissions generated directly or indirectly in the supply chain and thus achieve CO2 neutrality mathematically. CO2 certificate providers use certificate sales to invest in climate protection projects such as reforestation programmes or photovoltaic system installation, with the majority of projects implemented in developing countries. The price and quality of these certificates varies greatly, which is why one should look for a recognised seal when buying one (e.g. Gold Standard or the Verified Carbon Standard). The institutions that award these seals check the calculation of the savings potential and the actual use of funds. Many standards additionally consider social criteria such as human rights observance during the project or conflict avoidance with the interests of the local population.

CO₂ neutrality

CO2 neutrality is an important building block on the path to environmentally sustainable business. CO2 or greenhouse gas neutral refers to activities or products that do not cause harmful greenhouse gas emissions. This can be achieved through climate-friendly technologies and the use of renewable energies.  Reducing energy consumption is particularly important for achieving CO2 neutrality. Where all technical possibilities have been exhausted and emissions still occur, these can be offset in the final step by purchasing CO2 certificates. Corresponding to their emissions, companies pay money to organisations that use it to finance projects to bind CO2, for example through reforestation. In this way, no additional climate-damaging carbon dioxide is added to the atmosphere. 

CRREM – Carbon Risk Real Estate Monitor

CRREM (Carbon Risk Real Estate Monitor) is an EU-funded research project that supports  the real estate industry in achieving the Paris Climate Agreement. The research team has developed a tool similar to a benchmark that allows investors and property owners to rank their properties in terms of energy compared to the goals of the Paris Climate Agreement. To achieve the Paris climate goals, the CO2 emissions of properties must fall over the next few years. CRREM's decarbonisation paths show the extent to which emissions must fall. Assessment of individual properties is based on energy and emissions data, which are compared with decarbonisation paths. The decarbonisation paths are continuously adapted to new regulatory requirements.
With the help of CRREM, the challenges, risks and uncertainties associated with the decarbonisation of real estate can be assessed and various scenarios and their impact on investor portfolios quantified empirically.



Decarbonisation describes the process of gradually reducing greenhouse gas emissions to achieve an economy that is as emission-free as possible. The background to this is the goal of greenhouse gas neutrality anchored in the Paris Climate Agreement, which is to be achieved in the second half of this century. The aim of a decarbonisation strategy is to reduce the CO2 emissions of a building to almost zero kg CO2 in balance sheet terms and thus to realise climate-neutral operation for the building. To achieve this, the CO2 footprint of the building is first determined on the basis of real consumption data and potential savings are identified. This is then used to derive measures such as switching to green electricity, installing photovoltaics or renewing various building components.

DNSH – Do No Significant Harm

Economic activities that make a significant contribution to an environmental objective under the Taxonomy Regulation are only considered sustainable if they simultaneously comply with minimum social standards and have no significant harm on the other five environmental objectives. This principle is called "Do No Significant Harm" (DNSH).

Energy efficiency

The term "energy efficiency" describes the ratio of energy yield (output) to energy being supplied (input). The lower the energy losses, the higher the energy efficiency. The goal is therefore to reduce energy losses to a minimum. At the EU level, this is regulated by Directive 2012/27/EU (Energy Efficiency Directive) of 25 October 2012, which prescribes, among other things, mandatory energy savings to realise the EU target of 20% higher energy efficiency compared to 2008. An increase in energy efficiency in the operation of buildings can be achieved, for example, by switching to efficient building technology (heating, ventilation and cooling), using efficient lighting or optimising façades.
To achieve the goals from the Paris Climate Agreement, the building sector uses a combination of energy efficiency measures and an improvement in the energy supply of buildings (on-site energy generation, green electricity, etc.). Cf. "Decarbonisation "

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Energy monitoring

Energy monitoring in the building sector describes an active management process for all energy flows occurring in the building and their continuous optimisation. Energy monitoring is usually carried out via permanently installed measuring points for the operating behaviour of the individual technical systems (heating, ventilation, cooling and lighting). The collected measured values are evaluated digitally in conjunction with the comfort conditions in the rooms (temperature, humidity, air exchange, etc.). Using load curves, unusual operating conditions can thus be identified, their cause analysed and optimisation actions initiated - in the sense of a derived energy management.
If this process is carried out continuously, considerable optimisation potential can be raised, especially in existing buildings with complex technical equipment. In addition to increasing the energy efficiency and reducing the CO2 footprint of a building, comfort optimisations for the users are often also achieved.
Deka Immobilien is pursuing several approaches to reduce the CO₂ footprint; one component is the smart data technology MeteoViva Climate. Further information can be found here.


The abbreviation ESG has established itself internationally as a classification system for sustainable activities in the corporate and financial world. ESG stands for "Environment", "Social" and "Governance". ESG refers to the principles by which companies act to promote environmental protection and social progress, as well as to improve standards of responsible corporate governance that ensure sustainable development and prosperity for all.
The three dimensions of sustainability thus present a complete picture, because the term "sustainable" does not only refer to our environment, the reduction of emissions and a considerate use of natural resources. Equally important is good interaction with employees, business partners and customers, and also a commitment to civil society and equal opportunities.

ESG criteria - the origins

In the history of money, the goals of investors have always gone beyond purely financial returns. Even in ancient times, they also aimed to influence political matters. For many believers in the Middle Ages, the promise of a heavenly reward nudged their funds in a certain direction. The systematic steering of large financial flows towards sustainability began in the mid-20th century. This is because investments can be used to influence political decisions and innovations and to steer social trends. James S. Coleman developed the concept of social capital in 1988, according to which, one’s own interests could not be the only value of economic activity. At that time, environmental groups also began to use leverage as investors to influence capital markets to ensure that companies also incorporated environmental and social issues into their decisions. This trend continues and the EU Green Deal also focuses on channelling capital flows into sustainable investments. Today, there are a variety of ESG rankings and criteria that investors can use to guide their investment decisions (e.g. exclusion criteria for arms trade, fossil fuels, etc.). The criteria include topics such as greenhouse gas emissions, biodiversity, resource efficiency, occupational safety, human rights and social responsibility. As of 1 January 2022 , the EU Taxonomy Regulation serves as a uniform ESG standard for the financial market.

ESG ratings

In the financial sector, a "rating" is usually understood as the classification of an issuer's creditworthiness. In an "ESG rating", financial market participants and companies are evaluated according to various sustainability aspects. The major international sustainability rating agencies (such as Sustainalytics, MSCI ESG, ISS oekom or Vigeo Eiris) already have large online platforms on which thousands of companies have been rated. The market and demand for comparable ESG ratings is growing steadily. The criteria according to which companies or financial products are rated are currently defined by each rating provider itself. Associations such as the Global Reporting Initiative (GRI) or the German Association for Financial Analysis and Asset Management (DVFA) only provide direction. Therefore, the ratings cannot necessarily be compared with each other, as the criteria do differ. Nevertheless, many investors base their decision on the analysis of rating agencies, among other things. Meanwhile, sustainability ratings are also commissioned and paid for directly by companies. The EU taxonomy should help to simplify the comparison of financial products, as companies are now obligated to disclose information on compliance with the criteria.


EU Taxonomy Regulation

The EU Taxonomy Regulation is one of ten action points under the EU Action Plan for Financing Sustainable Growth. The first part of the Taxonomy Regulation entered into force on 1 January 2021.
The Taxonomy Regulation is a classification system that defines whether an economic activity is environmentally sustainable. In doing so, those sectors responsible for the majority of all direct greenhouse gas emissions in the EU have been prioritised. These include: "Forestry", "Environmental protection and restoration activities", "Manufacturing", "Energy", "Water supply, sewerage, waste management and remediation activities", "Transport", "Construction and real estate", "Information and communication" and "Professional, scientific and technical services". Individual activities are assessed, not the company as a whole.
For this purpose, six environmental objectives have been formulated so far, in which a significant ecological contribution of an activity can be made:

   ⦁   Climate protection,
   ⦁   adaptation to climate change,
   ⦁   sustainable use and protection of water and marine resources,
   ⦁   transition to a circular economy,
   ⦁   pollution prevention and control, and the
   ⦁   protection of ecosystems.
An activity is only considered environmentally sustainable if it contributes to one of the six objectives while not harming any of the others ("do no significant harm" principle). The taxonomy applies in principle to all financial products, but its application remains voluntary. Sustainable funds (according to Art. 8 and 9 of the Disclosure Regulation) will in future show the share of investments that comply with the taxonomy criteria. Funds not considered sustainable must disclose that they do not invest in accordance with the taxonomy. The concrete technical criteria for the first two environmental goals "climate protection" and "adaptation to climate change" will come into force from 2022; the criteria for the four other goals will follow in 2023.

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EU Disclosure Regulation

The "Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosure requirements in the financial services sector" regulates the obligations of financial market participants and other actors to report information on sustainability. It obligates companies operating on the financial market to communicate their strategy, in particular for dealing with sustainability risks and resulting negative impacts. In addition, financial market participants must report certain key figures (so-called PAIs). The regulation is largely mandatory as of 10 March 2021.

Fund classification according to EU Disclosure Regulation

With the entry of the European Disclosure Regulation* (Regulation (EU) 2019/2088 - SFDR for short) into force on 10 March 2021, financial products (such as real estate funds) can be classified into one of three categories described in the Regulation and must disclose defined information accordingly. The three categories are defined below in a simplified form:

1. Products that do not pursue defined ESG objectives or ESG strategies (Art. 6 - Product);

2. So-called ESG products with environmental or social features (Art. 8 - Product) and;

3. Impact products that have sustainable investment as their objective (as defined in the SFDR).

Classification of a product  into one of the three categories is called fund classification.

* Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosure requirements in the financial services sector.

Green electricity & eco-gas

Green electricity is not a protected term. It is usually understood to mean electrical energy from renewable sources such as photovoltaics, hydropower or wind power. Green electricity is usually almost emission-free, as emissions only occur in the production of the plants. There is no separate electricity grid for green electricity. Thus, all electricity providers feed their electricity into the same grid, regardless of whether they are nuclear or green electricity providers. Nevertheless, it makes sense to choose a green electricity provider because this increases the demand for renewable energy. Over time, this shifts the composition of electricity from nuclear and coal-fired power towards natural or green electricity. It also promotes investments in renewable technology.
Unlike natural gas and biogas, eco-gas is not a separate form of gas. The energy supplied usually comes from a mixture of biogas and natural gas but can also consist of 100% conventional natural gas. It earns the addition "eco" if the supplier compensates for the carbon dioxide produced by investing in climate protection projects.


Green Leases

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Tenancy agreements are the basis for the relationship between landlord and tenant. They define the rights and obligations of both parties. Leases that include ESG-related topics and obligations are called "green leases". These may contain an entire paragraph on sustainability or address ESG issues with specific clauses.
Such ESG clauses could include waste separation, energy-efficient and water-saving equipment installations (e.g. LED lighting) or the purchase of green electricity by the tenant. Another important aspect is the information obligations agreed between tenant and landlord. These obligate the tenant to provide consumption data to enable the landlord to make an informed assessment of the total energy consumption and the carbon footprint of the building. The aim of green leases is a close exchange and efficient cooperation between both parties as well as the joint implementation of climate protection measures.
Green leases are an essential component of a sustainable property portfolio for Deka Immobilien. More information on green leases at Deka Immobilien can be found here.

Health and well-being

The term "Health and well-being" focuses on the well-being and health of a building’s users. This includes not only high-quality, pollutant-free and environmentally friendly interior design, but also the acoustics and thermal comfort of the building. A view of nature or extensive planting also improve user quality. An offer of healthy food or sports and relaxation rooms in the building can also contribute to well-being. To ensure a high level of comfort in the long-term and a quick reaction time to changes, comfort parameters such as air humidity, CO2 content, temperature and pollutant content in rooms are monitored and evaluated continuously.

User satisfaction is the primary goal of "Health and well-being" in the building sector.

Paris Climate Agreement

At the World Climate Conference in Paris at the end of 2015, an agreement was adopted that commits all states to reducing greenhouse gas emissions for the first time. The Paris Climate Agreement is a legally binding instrument under the United Nations Framework Convention on Climate Change (Climate Convention). It contains measures for the gradual reduction of global greenhouse gas emissions. The agreement is of particular importance because the 195 signatory states have agreed on a common climate target for the first time: The average global temperature increase is to be limited to clearly below 2 °C compared to pre-industrial times (see "two-degree target"), and the ideal aim is a maximum warming of 1.5 °C. This means that by 2050, global greenhouse gas emissions must be reduced to zero. To achieve this, no more fossil emissions may enter the atmosphere (see "decarbonisation"). Another important goal is to steer government and private financial flows towards sustainable, low greenhouse gas development. To achieve this, the EU has adopted various measures such as the Disclosure Regulation and the Taxonomy Regulation.



A solar cell - as part of a photovoltaic module - uses the "photoelectric effect" to produce electricity from solar radiation. When sunlight hits the semiconductor materials in a solar cell, the excited electrons move. The movement energy generates electricity. The more the sun shines, the more solar electricity is generated. In a photovoltaic system, several solar cells are combined. To use the direct current generated, an inverter is needed to convert the electricity into alternating current before it is fed into the public grid. In return for feeding the electricity into the public grid, operators receive a so-called feed-in tariff. Direct use of the electricity at the site and storage in batteries is also an increasingly common variant. 

Principal Adverse Impacts = PAI

An important aspect of the Disclosure Regulation is creating transparency and thus also reporting the most important "adverse sustainability impacts" of the investment decisions made - the so-called "Principal Adverse Impacts" (PAI). Every decision, including the decision to invest, is naturally accompanied by advantages and disadvantages, opportunities and risks. In addition to many positive effects, which ultimately justify the investment, there are also potentially adverse sustainability impacts. To create transparency in this regard, the legislator has specified key figures that must be reported. For real estate, these are:

·        the share of investments in real estate used for the extraction, storage, transport or further processing of fossil fuels; and

·        the share of investments in energy-inefficient real estate.

In addition, another criterion must be reported, which can be selected from a list of various key figures. Deka Immobilien has chosen to report on energy consumption intensity.

The Disclosure Regulation distinguishes between the PAI statement at company level and the PAI at product level.

Renewable energies

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Renewable or regenerative energies are energy sources available to mankind in almost unlimited quantities or sources that regenerate within a very short time. These include sun and wind, but also bioenergy, geothermal energy, tidal energy and hydropower. The goal of the energy transition is the almost complete use of these energy sources and the renunciation of fossil fuels such as coal and gas, since fossil fuel use causes CO2 emissions, which are largely responsible for global warming.
For the building sector, there are two possibilities to use renewable energies actively. The first option is to purchase energy. This can be done, for example, through the targeted purchase of green electricity or by connecting to a renewable district or local heating network (e.g. with geothermal energy). The second option is the direct generation of electricity or heat from renewable energies at the site itself. For example, the use of photovoltaics on the roof, on the façade and/or in the outdoor facilities is suitable for this. Solar collectors or systems that use environmental energy (e.g. heat pumps powered by green electricity) could be used to generate heat. 

Resource efficiency

Resource efficiency describes the efficient use of natural resources. This includes, for example, renewable and non-renewable primary raw materials, energy resources (energy raw materials, flowing resources, radiant energy), water and land. To use resources efficiently, it is important that they are recycled and reused. The construction sector plays a major role in this, as it consumes an enormous number of resources and is responsible for about one third of all waste generated in the EU. Some projects, build entire residential buildings from recycled materials. Recycled concrete, for example, has been available on the market for a long time.

RTS – regulatory technical standards

The RTS (Regulatory Technical Standards) define in great detail how the obligations of the Disclosure Regulation are to be fulfilled. While, for example, the Disclosure Regulation "only" describes the obligation to report on the most important adverse sustainability impacts, the RTS define the key figures against which PAIs are to be measured. The RTS also specify exactly how, in what form and where the respective reports must be made.

This is why the RTS are often referred to as Level 2 of the Disclosure Regulation, while the regulation itself corresponds to Level 1. The RTS are scheduled to enter into force on 1 January 2023.

Stranded Asset

In terms of sustainability in the building sector, a stranded asset is a property that no longer meets the requirements for consumption and pollutant emissions over time. Specific consumption data that would have to be achieved as a minimum to comply with the Paris Climate Agreement are used as a benchmark. The relevant parameters for the evaluation of a property are the CO2 emissions [in kg CO2-equiv./m² and year] and the final energy consumption [in kWh/m² and year]. In the European market, the Carbon Risk Real Estate Monitor (CRREM) has proven particularly useful for this purpose. The real performance of buildings is compared with country-specific and building-use-specific target paths. If the building exceeds the respective path on the time axis, the building reaches its stranding point. Stranding can be avoided through qualified technical improvements and investments in a property.


Sustainable Development Goal (SDGs)


The 17 Sustainable Development Goals (SDGs) from the 2030 Agenda for Sustainable Development describe the political objectives of the United Nations. They are intended to ensure economic, ecological and social development. The goal system of the 2030 Agenda is universal and applies equally to developing, emerging and developed countries. It forms the basis for a changed global partnership. The 17 goals include topics such as quality education, climate protection, clean energy and gender equality. The slogan "leave no one behind" also comes from the 2030 Agenda, which is intended to exclude any kind of discrimination. The Development Goals were adopted by the United Nations (UN) General Assembly and have been in operation since 1 January 2016, valid for a period of 15 years (until 2030). The decade from 2020 to 2030 is therefore also called the "Decade of Action".

Two degree target

The goal of the Paris Climate Agreement is to limit the increase in the global average temperature to well below 2 °C compared to pre-industrial levels and to aim for a reduction to 1.5 °C. There is widespread consensus in climate research that if global warming is limited to 2 °C (already at 1.5 °C according to the 2018 Special Report of the Intergovernmental Panel on Climate Change (IPCC)) compared to pre-industrial levels, dangerous human interference with the climate system can be avoided narrowly. It is assumed that if the two-degree limit is exceeded, the consequences of climate change could no longer be controlled. Weather extremes and other climate impacts would take on dangerous and barely manageable dimensions, and the economic costs would rise to unacceptably high levels.


UN Global Compact

Launched in 1999, the UN Global Compact is a worldwide voluntary agreement signed between companies and the UN. To become part of the network, management signs a self-declaration to comply with the 10 principles of the Global Compact, which are intended to contribute to a more socially and ecologically designed globalisation. The principles include commitments to respect human rights and labour protection, environmental protection, rejection of child or forced labour and action against corruption and discrimination. These principles are based on various international standards such as the Declaration of Human Rights or the International Labour Organization's Declaration on Fundamental Principles and Rights at Work. More than 13,000 participants from over 160 countries have already signed - including Deka - and have thus also committed to regular reports describing how they are implementing the 10 principles.