Solar panels on a roof at sunrise.

Sustainability glossary

Frequently used technical terms explained

Anyone interested in sustainability is bound to come across terms such as EU Taxonomy Regulation, Decarbonisation, CO2 neutrality, green leases, or abbreviations such as RTS and DNSH. This sustainability glossary explains some of the most frequently used terms.

A woman holds a glass sphere out of which a plant is growing.

The term biodiversity describes the diversity of ecosystems, the diversity of species and the genetic diversity within a species. 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, epidemics and other problems.

Carbon emission certificates

By buying CO2 certificates, companies can compensate for greenhouse gas emissions generated directly or indirectly in the supply chain and therefore achieve CO2 neutrality mathematically. Carbon 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 recognised standards or seals of approval are important when purchasing them (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 also take into account social criteria such as human rights observance during the project or conflict avoidance with the interests of the local population.

A bird’s eye view of a forest with a sign in the middle.
Carbon footprint

A carbon footprint is a general term for a balance sheet listing the total amount of CO2 emissions caused by activity(ies), a product or people. There are multiple levels to a building’s carbon footprint. A carbon footprint can be calculated as a total figure for the complete life cycle of the building, or – in terms of current emissions – as the amount of CO2 emitted during ongoing operation. The overall approach also includes CO2 emissions that occur for the production of building materials and the operation of the building until demolition or dismantling. Usually, however, the carbon footprint of a building refers to its operation. It is also used to compare the climate impact of buildings: the lower the carbon footprint, the better the building can be classified in relation to climate targets.

A person’s footprints in the middle of a green forest.
Carbon neutrality

CO2 neutrality is an important building block on the path to environmentally sustainable business. Activities or products are carbon- or climate-neutral if they 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 carbon-neutrality. If all technical possibilities have been exhausted and emissions still occur, these emissions can be offset by purchasing carbon certificates. In accordance with their emissions, companies pay organisations to finance projects that lock in CO2, through reforestation for example. In this way, no additional climate-damaging carbon dioxide is added to the atmosphere in mathematical terms.

Wooden blocks spelling the word CO2 neutral in a forest.
CRREM – Carbon Risk Real Estate Monitor
A tablet computer displaying charts and diagrams.

CRREM (Carbon Risk Real Estate Monitor) is an EU-funded research project that supports the real estate industry in achieving the Paris Agreement on climate change. 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 Agreement. To achieve the Paris climate goals, the CO2 emissions of properties must fall over the coming years. CRREM’s decarbonisation paths show the extent to which emissions must be reduced. The assessment of individual properties is based on energy and emissions data, which is 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.

A building with trees growing out of it.

Decarbonisation describes the process of gradually reducing greenhouse gas emissions to achieve an economy that is as emissions-free as possible. The background to this is the goal of climate-neutrality anchored in the Paris 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 all but zero and therefore achieve climate-neutral building operation. To accomplish this, the carbon footprint of the building is first determined on the basis of real consumption data and potential savings are identified. This information 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 do no significant harm (DNSH) to any of the other five environmental objectives, known as the DNSH principle.

A group of businessmen and -women shake hands in an office.
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 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. Ways to increase energy efficiency in the operation of buildings include switching to efficient building technology (heating, ventilation and cooling), using efficient lighting or optimising façades.
To achieve the goals from the Paris Agreement, the building sector uses a combination of energy efficiency measures and improvements to the energy supply of buildings (on-site energy generation, green electricity, etc.). See also decarbonisation

 An electric vehicle charging at sunset.
Energy monitoring
A man working at a laptop, with symbols projected in front of it.

Energy monitoring in the building sector describes the process of actively managing all energy flows occurring in the building and their continuous optimisation. Usually, energy monitoring is carried out via permanently installed measuring points observing 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.). With the help of load curves, unusual operating conditions can be identified, their cause analysed and measures taken to optimise the situation through energy management.

If this process is carried out continuously, considerable optimisation potential can be realised, especially in existing buildings with complex technical equipment. In addition to increasing the energy efficiency and reducing the carbon footprint of a building, user comfort can also be optimised.

Deka Immobilien is pursuing several approaches to reduce its carbon footprint; smart data technology MeteoViva Climate is just one component. Further information can be found here.

Renewable energies
Solar panels in a field at sunset.

Renewable or regenerative energies are energy sources that are available to all in almost unlimited quantities or those 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 to almost fully utilise these energy sources and phase out fossil fuels such as coal and gas, since fossil fuel use causes CO2 emissions, which are the main contributing factor to global warming.
For the building sector, there are two possibilities to use renewable energies actively. The first option is to purchase energy, 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 location itself, using photovoltaics on the roof, on the façade and/or in the outdoor facilities for instance. Solar panels or systems that use environmental energy (e.g. heat pumps powered by green electricity) could be used to generate heat.


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 and refers to the principles by which companies act to promote environmental protection and social progress and improve the standards of responsible corporate governance to ensure sustainable development and prosperity for all.

The three dimensions of sustainability present a complete picture, as the term “sustainable” does not only concern 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.

A wooden sign with the words Environmental Social Governance on it with a lake in the background.
ESG ratings

In the financial sector, a rating is usually understood to be 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 guidance. 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. Sustainability ratings are now 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.

The letters AAA against a black background.
ESG criteria – origins
 A hand holds wooden blocks with various symbols on them.

Ever since the concept of money was invented, the goals of investors have always gone beyond purely financial returns. Even in ancient times, they also aimed to influence political matters. For many religious men and women 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 midway through the 20th century. This is because investments can be used to influence political decisions and innovations and to guide social trends. James S. Coleman developed the concept of social capital in 1988, according to which a person’s own interests cannot 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 the arms trade, fossil fuels, etc.). Criteria cover topics such as greenhouse gas emissions, biodiversity, resource efficiency, occupational safety, human rights and social responsibility. Since 1 January 2022 , the EU Taxonomy Regulation has served as a uniform ESG standard for the financial market.

EU Sustainable Finance Disclosure Regulation
An EU flag with a section symbol projected onto it.

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 stakeholders 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). As of 10 March 2021, large parts of the regulation are mandatory.

EU Taxonomy

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, with priority given to the sectors responsible for the majority of all direct greenhouse gas emissions in the EU. 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.
So far, six environmental objectives have been formulated where a significant ecological contribution can be made through an activity:

  • Climate change mitigation
  • Climate change adaptation
  • Sustainable use and protection of water and marine resources
  • Transition to a circular economy
  • Pollution prevention and control
  • Protection and restoration of biodiversity and 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 specific technical criteria for the first two environmental goals, climate change mitigation and climate change adaptation, came into force in 2022; the criteria for the four other goals will follow in 2023.

The EU flag with a map of the EU in the background.
Fund classification according to EU Sustainable Finance Disclosure Regulation
 	A man checks share prices with an EU flag in the background.

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. In simplified form, the three categories are as follows:

  1. Products that do not pursue defined ESG objectives or ESG strategies (Article 6 product)
  2. ESG products that promote environmental or social characteristics (Article 8 product)
  3. Products that have a positive impact and are geared towards sustainable investment (pursuant to the SFDR)

Grouping a product to 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 leases
 	Two businesspeople shake hands.

Lease agreements are the basis for the relationship between landlord and tenant. They define the rights and obligations of both parties. Lease agreements that include ESG-related topics and obligations are called green leases. These may contain an entire paragraph on sustainability or address ESG issues with various clauses.
Such ESG clauses could cover 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 for both parties to remain in close contact, work together efficiently and jointly implement climate protection measures.
Green leases are an essential component of a sustainable real estate portfolio for Deka Immobilien. More information on green leases at Deka Immobilien can be found here.

Health and well-being

Health and well-being is all about creating comfortable and healthy conditions for building 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, as can offering healthy food or sports and relaxation rooms in the building. 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 increasingly being monitored and evaluated on a continuous basis.

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

 	A cityscape with plants growing from the sides of the buildings.
Climate action

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 Agreement. From a scientific perspective, however, the effects of global warming can only be mitigated and limited, not completely stopped. 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 include the construction of dykes and other measures to protect against natural disasters.

 	A person holds a glass ball showing the reflection of a tree.
Circular economy (“cradle to cradle”)
 	A circular building with trees and a blue sky.

The principle of the circular economy is to do with creating 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 as-new raw materials. This is also known as the cradle-to-cradle principle. In terms of buildings, this means simple dismantling and reusing individual components, materials and raw materials. In this context, the digital material passport for buildings will become increasingly important in the future.

Green electricity and green 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 all but emission-free, as emissions only occur in the production of the plants. There is no separate electricity grid for green electricity. As a result, 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 “eco” label if the supplier compensates for the carbon dioxide produced by investing in climate protection projects.

An image of sunflowers and wind turbines being zipped together over a power socket.
An image of sunflowers and wind turbines being zipped together over a power socket.
Principal adverse impacts (PAI)
A man in a suit points to a screen on which the word “transparency” is displayed.

An important aspect of the Disclosure Regulation is creating transparency and therefore also reporting the most important “adverse sustainability impacts” of the investment decisions made – known as 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, legislation defines specific 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;
  • 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.

Paris Agreement

At the World Climate Conference in Paris at the end of 2015, an agreement was reached to commit all states to reducing greenhouse gas emissions for the first time. The Paris 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 it marks the first time that the 195 signatory countries have agreed on a common climate target: limiting the average increase in global temperatures to well below 2°C above pre-industrial levels (see “two-degree target”), while pursuing efforts to limit the increase to 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. The EU has adopted various measures such as the Disclosure Regulation and the Taxonomy Regulation in pursuit of this goal.

A city with high-rise buildings and the sun in the background.
Solar panels in a field at sunrise.

A solar cell – forming part of a photovoltaic module – uses the photoelectric effect to produce electricity from the sun’s rays. When sunlight hits the semiconductor materials in a solar cell, electrons are excited and begin to move, creating energy. The more the sun shines, the more solar electricity is generated. In a photovoltaic system, multiple solar cells are combined. To make use of the resulting direct current, 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 what’s known as a feed-in tariff. Direct use of the electricity at the site and storage in batteries is also an increasingly common variant.

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 amount of resources and is responsible for about one third of all waste generated in the EU. Some projects involve building entire residential buildings from recycled materials. Recycled concrete, for example, has been available on the market for a long time.

A dam with water coming out of it.
Regulatory technical standards (RTS)
A person writing on a clipboard, with icons in the foreground.

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 came 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 Agreement is used as a benchmark. The relevant parameters for the evaluation of a property are CO2 emissions [in kg CO2-equiv./sqm and year] and final energy consumption [in kWh/sqm 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 the target trajectories for specific countries and building usage. If the building exceeds the respective trajectory on the time axis, the building reaches its stranding point. Stranding can be avoided through qualified technical improvements and investments in a property.

A room with a large window and trees in the background.
Sustainable Development Goals (SDGs)
A globe with multiple icons with a forest in the background.

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 target 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 force since 1 January 2016, valid for a period of 15 years (until 2030). The decade from 2020 to 2030 has been termed the Decade of Action.

UN Global Compact
The flag of the United Nations.

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 ten 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 therefore also committed to regular reports describing how they are implementing the ten principles.

Two-degree target

The goal of the Paris Agreement is to limit the increase in the global average temperature to well below 2°C above pre-industrial levels while pursuing efforts to limit the increase 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)) above pre-industrial levels, dangerous human interference with the climate system can just about be avoided. It is assumed that, if the two-degree limit is exceeded, the consequences of climate change could no longer be controlled. Extreme weather events and other climate impacts would take on dangerous and barely manageable dimensions, and the economic costs would rise to unacceptably high levels.

Wooden blocks with numbers on them.