Advancing Just Transitions in the Built Environment

European Social Taxonomy

Develop the European Social Taxonomy to accompany the green taxonomy, increasing transparency and strengthening accountability with regards to the social impact of business activity. In the meantime, assess the performance of the minimum safeguards in the green taxonomy, and consider potential strengthening.

Community retrofit hubs

To support citizens in their efforts to decarbonise the existing building stock, governments should partner with civil society organisations and businesses to establish community hubs which can provide guidance and expertise, particularly valuable for marginalised communities.

Strengthened ESG reporting

Include respect for workers’ rights (on construction sites and through construction materials supply chain) and impact on housing affordability within ESG and impact investment frameworks, as well as in engagement with current and potential companies in the investment portfolio.

Incentivise best practice

Offer regulatory (governments) and financial (investors) incentives rewarding developers who exceed building code requirements e.g. a building which exceeds the % affordable housing requirement and minimum energy efficiency rating is allowed to have an extra storey, etc.

Unionised workforce

Ensure there is strong(er) regulation in place protecting workers including their right for unionisation and collective bargaining, as well as access to remedy without retaliation. This is crucial to address the current labour shortages in the construction sector.

Enshrine the right to housing

Enshrine the Right to Housing in national constitutions and in the EU’s Charter of Fundamental Rights.

Circular, equitable land use and spatial planning

Develop land use and spatial plans based on circularity and equity, upholding the rights to non-discrimination and spatial equity. This can include re-zoning to support mixed-use development, prioritising re-using existing buildings and incorporating social safeguards against gentrification and displacement. This approach revitalises communities, preserves cultural heritage, and minimises the environmental footprint of new developments.

Dedicated housing agency

Establish a dedicated housing agency (ministry, department, etc.) with autonomy, appropriate financial and human resources, and executive power to create policies, programmes, plans and strategies to protect the right to housing. Housing-responsible agencies at the local and national levels should be in constant and direct communication and coordination to maximise results.

Promote energy-efficiency retrofits

Provide incentives for home owners through tax-deductions and subsidies, and negotiating special pricing with energy companies for volume business, at neighbourhood or district scale. Specify benefit-sharing mechanisms to ensure subsidies aren't simply transferred on to tenants.

Social Urbanism

Adopt, support and invest in the Social Urbanism model of city (re)development. This model prioritises investments in social infrastructure in the most disadvantaged neighbourhoods of the city, unlocking both economic and social development potential.

Protect workers' rights

Invest in companies with strong policies that protect workers’ rights, such as transparent human resources processes, safety standards, providing adequate support for all workers, regardless of gender, age, or disability, programmes to reskill for refurbishing and retrofitting housing.

Local hiring preference

Ensure that building (re)developments benefit local workers and communities, by mandating a local hiring preference. This would promote upskilling and economic development within the community.

Public procurement to align social and environmental outcomes

For example, tenders could include social value metrics in the assessment frameworks or require training clauses to upskill and reskill the construction workforce and mandate the inclusion of apprenticeships . When the winning contractors are awarded a contract, these clauses ensure that they commit to training their staff (and possibly beyond) during the project in a specific set of skills. As a result, contractors contribute to the just transitions by dedicating time, budget, and means to train their employees and new workers, possibly directly on-site.

Affordable essential utilities

Ensure essential utilities (electricity, heating and water) are accessible and affordable for all residents, to provide the services required to uphold the human right to adequate housing. This can be possible through increased regulation of privatised utilities and reduced rates, discounted bills, and energy efficiency retrofitting programmes for publicly-owned utilities.

Participation platforms

Invest in establishing and developing participation platforms, where municipal and national government, technical teams, investors, civil society, and cultural organisations can collaborate.

Grow the public housing stock

Grow, finance, or establish public housing corporations, to increase public housing stock (for example through right of first refusal mechanisms), have greater control of the housing market, and generate long-term revenue. When market properties are built on public land, ensure land ownership is retained in the public domain.

Multi-level, long-term governance

Establish strong structures and institutions to allow for multi-level governance so that regional and city-level plans integrate national decarbonisation strategies. Develop long-term plans which provide the policy certainty and predictability required to foster long-term, responsible public and private investment.

Consolidate funding pots

Provide clear avenues for governments, businesses and residents to access funding for green and affordable housing. At the EU level, consolidate loans and guarantees for green and affordable housing provided by EBRD and EIB into a single dedicated funding pot. The different pots available for retrofit and renovation should also be integrated into a single platform directly accessible to housing finance applicants, rather than being channelled through multilateral, national, regional or commercial banks.

Protect against renovictions

Measures can include rent caps, a ban on no-fault evictions, increasing the duration of standard rental contracts, requiring affordable housing in mixed use developments, tying retrofit loans to future energy savings, safeguarding the social categorization of social housing after retrofit, and more.

Support local social innovation

From European housing cooperatives and community land trusts, to the self-help model in Africa, people everywhere demonstrate that their knowledge and potential to find solutions is valuable and is often disregarded. Understanding and supporting such civil society innovations would increase their agency and the city's capacity to resolve its own urban problems.

Taxonomy-aligned investment

Align investments with the EU Green Taxonomy (Regulation EU 2020/852), particularly with the Minimum Safeguards (MS) as laid out in Article 18.

Equitable National EPBD Implementation

Countries must embed a just transition approach into their national EPBD implementation plans. This may entail prioritising funding for lower-income groups, introducing safeguards which prevent renovictions and green gentrification, and upskilling programmes for existing construction workers.

Future iterations of the EPBD (from 2028) should include higher residential energy efficiency standards and a more explicit focus on social justice, including climate housing allowances which could be delivered through the Just Transition Mechanism.

Regulate investment

Introduce regulations that require responsible investments and conduct of (a) nationally headquartered companies operating overseas, as well as (b) foreign companies directly investing and operating in national territory.

Leverage fiscal measures to tackle housing financialisation

To reduce housing speculation, improve affordability, and prevent green gentrification and spatial inequalities, explore the possibilities for taxes on empty homes or second homes, bans to rent recently bought properties below a certain value, and regulations for the short-term rental market.

Maximise pre-competitive advantage

Gain competitive advantage and avoid stranded assets by developing investment products that comply with upcoming and emerging environmental and social regulations. In the EU, these include the EPBD, CSRD, CSDDD and Green Taxonomy.

Alternative investment criteria

Include energy-efficiency and affordability (low price rents) as criteria for investments.

Minimum energy efficiency standards with social safeguards

Introduce minimum energy efficiency standards for new homes, as well as national targets for retrofitting the existing stock. Crucially, these changes must be accompanied by social safeguards such as rental caps, prioritised funding for low-income groups and benefit-sharing mechanisms which prevent renovictions, green gentrification and job loss.

Integrated land use and transport planning

Integrate land use and transport planning to ensure that existing and planned buildings have adequate access to resources that improve quality of life e.g. transport infrastructure like metro stations, green spaces, workplaces, schools, healthcare facilities and stores for daily needs.

Social license to operate

Ensure developers in the investment portfolio have adequate provisions to consult (at least) and co-create (at best) with end-users and local communities.

Land ownership data

Increase transparency of real estate transactions through the creation of a publicly-available digital register of real estate ownership and transactions, as currently being explored by the OECD and the EU.

Embed diversity

Monitor and evaluate the diversity (gender, age, ethnicity, backgrounds) of the staff and boards of investment portfolio built environment companies.

Develop a public housing investment programme

Consolidate multiple housing initiatives within a housing development investment programme, which can, for example, map all under-used and vacant buildings which could be converted into affordable housing, including through partnerships with investors. The programme should be developed in close partnership with CSOs, to ensure housing affordability – generating long-term financial returns from a large number of low-priced rents (citywide) rather than from a low number of buildings with high-priced rents.

Expand participation

Businesses and government should involve NGOs, universities, and civil society organisations such as tenants associations and workers unions, in the design and implementation of green transition strategies. Meaningful engagement processes such as citizen assemblies are crucial to respect local communities, but they can also provide unique insights that can improve the projects for all stakeholders involved. Additionally, early-stage engagement helps reduce the likelihood of push-back and delays further down the line.

National CSDDD Implementation

When developing their national implementation plans for the CSDDD, EU countries should clearly indicate that these apply to real estate and construction companies, including their impact on economic, cultural and social rights.

Upskilling and re-skilling

Invest in upskilling and reskilling the entire value chain, e.g. through circular economy training programmes and other green skills for architects, engineers, and construction professionals of different skill levels and of different socioeconomic backgrounds.

Citizen and evidence-led

Decision-making processes and policy development should be based on evidence and citizen engagement. This helps avoid politicisation, prevent greenwashing, and find bipartisan, common-ground solutions to urban issues. It will also facilitate the integration of climate policies and social policies.

Just Transition Plans

Engage with workers, tenants, and their unions to develop just transition plans that identify and mitigate against potential human rights issues in the green transition. These could include initiatives supporting carbon-intensive workers in accessing new green jobs, ensuring these deliver improved working conditions, or protecting tenants from potential renovictions, ultimately strengthening public support for climate action. The plans must be accompanied by dedicated funding for at-risk communities, and investors can contribute by prioritising investments in companies that have Just Transition Plans in place.

Human rights due diligence

Perform human rights due diligence on portfolio companies in construction and real estate, and require them to do the same down their supply chain.

Long-term, stable returns over short-term extractive investments

For example, by providing a mix of homes which meet the local socio-economic profiles rather than those of speculators, strengthening tenant protections to minimise tenant turnover, and including commercial spaces which create stable employment opportunities for residents.

Context-specific investments

In many European countries, there is more than enough residential real estate to house everyone, without the need to build more. With 16% of homes across Europe unoccupied and countless vacant commercial buildings, just transition investments must focus on retrofits and sufficiency. In many other countries around the world, there are not enough homes for everyone, and populations keep growing. Hence, investments in those contexts require a combination of energy-efficient new builds and retrofits.

Licenses and permits

Leverage business licensing and permits to prioritise businesses and social enterprises that commit to respecting human rights and align with the principles of a just transition.

Strengthen corporate reporting and disclosures

Introduce mandatory reporting requirements for large companies, strengthening transparency and accountability. Disclosures also play a key role in allowing investors greater visibility of the organisations they are investing in.

In Europe, this process has been started through the Corporate Sustainability Reporting Directive (CSRD), but construction sector-specific standards must be developed as part of the European reporting standards (ESRS)

An equitable green deal, grounded in housing

Ensure the next phase of the European Green Deal has a greater focus on social equity, which will reduce public pushback. Sustainable, affordable housing should sit at its cornerstone, with the potential for a new Housing Commissioner.

Blended finance for social housing

Set financial incentives for blended finance in social housing, such as state credit guarantees or attractive interest rates, that require both environmental and social sustainability. This can also guide green finance to create green construction training and jobs in territories and neighbourhoods most impacted by economic restructuring.