Analysing the Impact on Sustainability Reporting: An Examination of EU Taxonomy Integration and Compliance within the Construction and Real Estate Sector

Abstract

This study explores the integration and compliance of the EU Taxonomy within the construction and real estate sector. Its objective is to examine how corporations in these sectors align their reporting practices with the EU Taxonomy requirements (RQ 1). Furthermore, the study aims to demonstrate how these disclosures evolved between the reporting periods 2022 and 2023 (RQ 2). A document analysis approach of the taxonomy abstracts is employed. The research combines qualitative and quantitative observations to collect company data and address the research questions. By revealing significant periodic improvements in the criteria analysed, the study highlights that corporations show substantial efforts to align their reporting practices with the taxonomy requirements. Additionally, there appears to be a transition in how corporations evaluate and incorporate the EU Taxonomy within their sustainability strategies. Significant improvements in data quality highlight that there is an increased ability to inform about taxonomy-related information, thereby complying with regulatory mandatories. Despite significant similarities between the construction and real estate sector, the study also reveals notable deviations, which draw indications about differences in their business models and taxonomy coverage. This study provides valuable insights for researchers and corporations involved in sustainability reporting. By addressing the existing research gap, the study paves the way for future exploration. It highlights the importance of a thorough engagement with the subject matter to ensure regulatory compliance and deliver transparency for investors, thereby contributing to sustainable finance.