Publication/Legislation

Legislation on sustainability

Construction Products Regulation (CPR)

European Union

Legislativa

The Construction Products Regulation (CPR) is a key legal framework that harmonises the conditions for placing construction products on the EU market by introducing uniform technical specifications and CE marking, facilitating the free movement of these products in the single market. The CPR sets requirements for the safety, performance and sustainability of construction products, while allowing Member States to introduce specific national requirements to protect health, safety and the environment in relation to their use. The CPR also ensures that products meet essential building requirements such as mechanical resistance, fire safety and energy efficiency.

The current CPR (EU Regulation 305/2011) sets out obligations for various target groups in the construction sector, including manufacturers, importers, distributors and regulators, to ensure the safety and quality of construction products used in buildings and other construction projects.

Importers who place products from non-EU manufacturers on the market are obliged to verify that the manufacturer has drawn up a declaration of performance. They are also responsible for ensuring that the product meets all relevant requirements and must ensure that the technical documentation is available to regulatory authorities on request. Distributors must verify that products are accompanied by the required documentation, including instructions for use and safety information in the appropriate language. Regulatory authorities play a key role in market surveillance, being responsible for regular inspections of construction products on the market to ensure their compliance with the requirements of the CPR. Regulators also work with other Member States and the European Commission to ensure consistent enforcement of the Regulation across the EU. In the context of the construction sector, where construction products play a key role in the safety and functionality of buildings, it is important that all stakeholders comply with these requirements.

Following the preliminary agreement reached between the European Parliament and the Council on 13 December 2024, the European Parliament adopted the text of the revised CPR on 10 April 2024. The main objectives of the revised CPR are to establish: i) harmonised rules for the expression of the environmental and safety performance of construction products in relation to their essential characteristics, including life cycle assessment, and ii) environmental, functional and safety requirements for construction products in the EU.

Under the revised Regulation, manufacturers will be obliged to submit a declaration of performance and compliance, which will also indicate the environmental sustainability of their construction product on a life cycle basis for the predefined characteristics listed in Annex II of the Regulation. Information on the Global Warming Potential (GWP) of new products over their entire life cycle (climate change impacts - total; fossil fuels; biogenic; and land use and land use change) must be published within 12 months of the CPR coming into force (in the second half of 2025), followed by a second set of environmental attributes within 4 years (2029) and a third set within 6 years (2031). These product declarations will be used in the life cycle GWP calculation of new buildings under the revised EPBD 4, if available.

The European Commission will be empowered to adopt a delegated act to establish a digital passport system for construction products. The detailed parameters and requirements of the system are described in Articles 75, 76, 77, 78, 79 and 80 of the Regulation. The system is to be fully operational within six months of the entry into force of the delegated act and manufacturers will be required to make the passports available for their products within 18 months. During a transitional period, manufacturers may use the system on a voluntary basis.

The Commission will also be empowered to adopt delegated acts to set mandatory minimum requirements for the environmental sustainability of construction products, which will then be applied by contracting authorities in tenders within the scope of the EU public procurement directives. In doing so, contracting authorities in Member States will be able to set more ambitious or additional environmental sustainability requirements provided that they are in line with harmonised EU standards.

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Corporate Sustainability Reporting Directive (CSRD)

European Union

Legislation

The CSRD (Corporate Sustainability Reporting Directive), which replaced the NFRD (Non-Financial Reporting Directive), extends mandatory reporting requirements on corporate sustainability information to a wider range of companies in the EU, including smaller companies and branches of foreign companies. The related European Sustainability Reporting Standards (ESRS) set out specific content, parameters and indicators for 10 sustainability-related areas and specify how the information should be structured and presented to make it clear and comparable between different companies.

Under the CSRD, all large companies and those listed in the EU will be required to provide detailed information on their environmental, social and governance (ESG) performance from the 2025 financial year. This information must be included in annual reports and, in future, verified by an independent auditor, which will contribute to greater transparency and credibility of the disclosures.

Large companies are those that meet at least two of the following parameters:

Total assets: at least EUR 20 million;
turnover: at least EUR 40 million
average annual number of employees: at least 250. The CSRD therefore covers approximately 1 500 companies in the Czech Republic.

The reporting obligation is introduced gradually according to the category of companies:

Reporting Year	Financial Year	Affected Companies
2025	2024	Companies already subject to non-financial reporting obligations under NFRD - large enterprises that are public-interest entities and have more than 500 employees.
2026	2025	Large companies (see parameters in the text above) that currently do not have reporting obligations under NFRD.
2027	2026	Small and medium-sized enterprises that are publicly traded on the stock exchange (and are operating/doing business).
2028	2027	Third-country companies with revenue over 150 million EUR and operations in the EU, if they have at least one subsidiary or branch in the EU.

In practice, the CSRD impacts not only the companies directly subject to the reporting obligation, but also other actors in their value chains, such as manufacturers and suppliers of equipment, products and materials, subcontractors and others. These actors will also have to monitor, collect and provide the necessary data as input to the companies' reporting under the Directive.

CSRD reporting is based on the principle of double materiality, where two aspects are assessed:

Impact significance: what direct impact the company's activities have on society and the environment.
Financial significance: how the company is affected by its environment (e.g. climate change) and how this affects its value.

Companies covered by the CSRD are required to disclose in their annual reports the proportion of their business activities that qualify for compliance with the EU Taxonomy. They must also report the proportion of their turnover, capital investment and operating expenses that meet the technical screening criteria of the Taxonomy.

The ESRB standards specify in detail how companies should report sustainability information and establish uniform reporting standards to ensure consistency and comparability of data between different companies. The framework includes conditions on how information should be structured, what indicators and metrics should be used and how it should be presented.

The standards cover the following areas (see table). The selection of topics for which the enterprise must provide data is based on a double materiality assessment.

Standard	Content
ESRS 1	General Requirements
ESRS 2	General Information
ESRS E1	Climate Change
ESRS E2	Pollution
ESRS E3	Water and Marine Resources
ESRS E4	Biodiversity and Ecosystems
ESRS E5	Resource Use and Circular Economy
ESRS S1	Own Workforce
ESRS S2	Workers in the Value Chain
ESRS S3	Affected Communities
ESRS S4	Consumers and End-users
ESRS G1	Business Conduct

The ESRS standards set out requirements for reporting detailed information on direct and indirect CO₂ emissions, energy performance of buildings, consumption of materials and products on construction sites and waste generation, including the share of primary, secondary and biological materials in inputs and recovery (reuse, recycling) versus disposal in waste streams, water consumption, biodiversity protection and other sustainability factors that are essential for assessing and improving the sustainability of buildings, among others. A particularly important mandatory indicator for construction and development companies is indirect emissions (Scope 3), which are generated in the supply chain (from raw material extraction, production and transport of materials, construction and repair).

For audiences such as investors, regulators and the public, these new regulations represent a significant increase in the availability and quality of corporate sustainability information. Information from companies will offer investors a consistent and standardised view of sustainable practices and risks, facilitating their decision-making and influencing investment strategies based on ESG criteria. For regulators, the new rules provide the tools and framework for effective oversight of compliance with sustainability standards. The CSRD significantly increases the incentive for reporting companies to develop and implement sustainability strategies and ensures the ability to attract investment capital for new projects.

Energy Efficiency Directive (EED)

European Union

Legislation

The Energy Efficiency Directive (EED), originally adopted in 2012, is a key part of the "Fit for 55" package and aims to increase energy efficiency in the European Union. It aims to reduce energy consumption and greenhouse gas emissions and to foster sustainable growth. The new version of the Directive sets more ambitious targets and emphasises greater involvement of Member States and concrete measures to achieve energy savings targets.

Revised version - in force from 10.10.2023

The main objective of the EED is to increase energy efficiency in the EU by 11.7% by 2030 compared to 2020. To achieve this target, Member States will determine their own contributions based on their local circumstances. This is to ensure a reduction in energy consumption and contribute to achieving climate neutrality by 2050. The Directive promotes energy savings in industry, buildings and transport and aims to increase the EU's energy independence. Another objective at Member State level is to increase the minimum annual savings in final energy consumption.

The revised Directive introduces a number of measures to promote the acceleration of energy efficiency, including the adoption of the principle of "energy efficiency first" in both energy and non-energy policies.

Other changes from the previous Directives 2018/2002 and 2012/27/EU include:

Obligation for Member States to prioritise vulnerable customers and social housing in energy saving measures.
Introduction of an annual target for reducing energy consumption in the public sector by 1.9%.
Extension of the obligation to renovate buildings by 3% per year to all levels of public administration.
Extension of the obligatin to carry out energy audits and integrate energy management systems.Introduction of a new obligation to monitor the energy performance of data centres with an EU-level database to collect and publish data.
Support for local heating and cooling plans in larger municipalities.
Progressive improvement of energy efficiency in heating or cooling supply, including district heating.

Obligations under the EED:

Member States must draw up energy saving plans for a given period, which must include specific measures in different sectors.

Large companies, defined as those with more than 250 employees or an annual turnover of more than €50 million, must carry out energy audits including a detailed overview of energy flows, main consumption drivers, savings potential and cost-effective measures. Although implementation of the recommended measures is not mandatory, the audits aim to provide valuable information on opportunities to reduce energy consumption and costs.

Member States are required to report regularly on progress in energy savings. The European Commission monitors the achievement of targets and sanctions or corrective measures can be imposed in case of non-compliance.

The revisions of the Energy Performance of Buildings Directive (EPBD) and the EED together present opportunities to accelerate efforts to decarbonise the energy system through efficient and optimised energy use.

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Package “Fit for 55”

European Commission

Legislative package

The Fit for 55 package was presented in July 2021 as part of the European Climate Legal Framework and the Green Deal for Europe. The aim is to reduce Europe's net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels, while achieving carbon neutrality in 2050.

The Fit for 55 package is a comprehensive set of legislative and interlinked proposals. These proposals include:

Revision of the EU Emissions Trading System (EU ETS),
revision of the Effort Sharing Regulation (ESR) containing emission reduction commitments for sectors outside the EU ETS (national transport (except aviation), buildings, agriculture, small industry and waste management),
revision of the Renewable Energy Directive (RED)
revision of the Energy Efficiency Directive (EED), introduction of the Carbon Border Adjustment Mechanism; CBAM),
revision of the Energy Performance of Buildings Directive (EPBD), EU Methane Regulation for the energy sector, updated EU rules for decarbonising gas and hydrogen markets,
revision of the Alternative Fuels Infrastructure Regulation; AFIR),the ReFuel EU Aviation Regulation,the FuelEU Maritime Regulation,the Regulation on Land Use, Forestry and Agriculture (LULUCF)

The Effort Sharing Regulation focuses on setting European and national decarbonisation targets for sectors not covered by the EU ETS, such as buildings. As part of the revision of the EU ETS in 2023, a new emissions trading scheme called ETS2 was created. This new system will regulate emissions from fuel combustion in buildings, road transport and other sectors (mainly small industry).

Fit for 55 will affect different target groups in the EU. Businesses, especially in high emission sectors (e.g. energy, transport, industry), will be obliged to adapt their operations to stricter emission limits and invest in sustainable technologies. Obligations include the implementation of low-emission production processes by 2030 and the use of renewable energy sources. Small and medium-sized enterprises may receive support in the form of subsidies and grants for green technologies, but the introduction of changes may be somewhat voluntary for them, except in sectors where regulation applies across the board (such as energy, transport, industry and agriculture). Consumers will be affected by changes in prices for products with a high carbon footprint, which may be due to higher energy or fuel costs.

By 2024, national governments must adopt and subsequently implement updated National Climate and Energy Plans (NCEPs). In the Czech Republic, this is the National Energy and Climate Plan, which outlines how the Czech economy will undergo the decarbonisation process and how it will meet its European climate and energy commitments by 2030. Specific obligations include updating legislation, introducing tax incentives for green investments and supporting energy transition. In the area of energy performance of buildings, the updated NEEAPs are to be in line with the higher targets of the revised EPBD and the "Renovation Wave" strategy to accelerate renovation efforts and decarbonisation of buildings.

REPowerEU

European Commission

Strategy (adaptation of existing legislative initiatives)

REPowerEU presents key legislative proposals embedded in a broader strategic plan to reduce the EU's dependence on Russian fossil fuels and accelerate the transition to renewable energy. The proposals focus on strengthening energy security, modernising energy infrastructure and promoting sustainability through new reforms and investments. In the framework of the REPowerEU plan, the Commission has proposed targeted changes to existing energy legislation, namely the Renewable Energy Directive (RED III), the Energy Performance of Buildings Directive (EPBD IV) and the Energy Efficiency Directive (EED), with the majority of the targeted changes relating to RED III.

Sustainable Finance Disclosure Regulation (SFDR)

European Union

Legislation

The Sustainable Finance Disclosure Regulation (SFDR) is a European Union regulation aimed at increasing transparency in sustainable finance. The aim is to help investors better understand how their investments affect sustainability and whether they are in line with their values. At the same time, the regulation aims to reduce greenwashing - the misrepresentation of products as more sustainable than they actually are - to ensure that investors are not misled by false or exaggerated claims.

Legislation in force with effect from 10 March 2021

The regulation applies to financial institutions, investment firms, fund managers and financial advisers with more than three employees, who must disclose how they integrate environmental, social and governance (ESG) criteria into their investment decisions.

According to the SFRD, financial products are classified into Articles 6, 8 or 9 based on the degree of consideration of ESG criteria. Article 6 is the least sustainable level and includes products that do not consider ESG criteria as a primary objective but may provide information on potential ESG risks. Examples are sovereign bonds and funds investing in them. Article 8 is a category containing funds that support, inter alia, environmental and social issues or a combination of both. These are therefore investments that fulfil ESG characteristics but sustainability is not their primary objective. This category is sometimes referred to as "light green" products, i.e. it is a weaker level of sustainability. Article 9 is a category comprising funds for which sustainability is a direct objective. Specifically, they are concerned with having a positive impact on society and the environment. This category is sometimes referred to as 'dark green', a stronger level of sustainability.

The SFDR also imposes an obligation to report on adverse impacts of investments (PAI, Principle Adverse Impacts). This is based on the "comply or explain" principle. This allows the entities concerned to explain why they do not take into account a certain risk or do not consider it important. However, this option is not available to obliged entities with more than 500 employees, which must disclose information on the consideration of adverse impacts without fail. Financial institutions that do take PAIs into account must disclose information on these adverse impacts, such as greenhouse gas emissions, pollution or negative human rights impacts. This information must be reported at the level of individual products and portfolios, through regular reports and public statements, to give investors a clear picture of the sustainability of the investments in question.

The SFDR is intertwined with the EU Taxonomy Regulation, which defines environmentally sustainable activities, as well as the Corporate Sustainability Reporting Directive (CSRD). Together they form the EU framework for sustainable finance. In the area of environmental protection, the criteria for an investment product under the EU Taxonomy are a stricter version of SFDR Article 9.A product that meets the conditions of the Taxonomy therefore also meets the conditions of SFDR Article 9 (source: fondee.cz).

Information under the SFDR must be disclosed at several levels:

Websites - Institutions publish their policies on the integration of ESG risks and their impact on investment decisions.
Product information documents - Documentation for individual investment products must indicate whether and how they take into account ESG criteria (including classification under Articles 6, 8, or 9).
Regular reports - For example, annual reports must include information on the consideration of ESG risks and the impact of PAIs.

The form must be clear, understandable and easily accessible to investors. This gives regulators the tools to monitor and control compliance with sustainable finance rules more rigorously.

Many entities in the real estate industry (e.g. investors and asset managers) meet the definition of a financial market participant or financial adviser and therefore products such as real estate investment trusts are subject to the provisions of the SFDR. Property developers who deal with financial market participants should take the obligations into account even if they are not directly covered by the legislation. Real estate advisers, such as real estate agents or brokers, may be subject to disclosure requirements if they provide financial advice or promote financial products that are subject to the SFDR.

Renewable Energy Directive (RED III)

European Union

Legislation

Directive (EU) 2023/2413 (RED III) represents a significant shift in the European Union's efforts to switch to renewable energy and reduce dependence on fossil fuels. This Directive updates and complements previous legislation (in particular Directive 2018/2001) and sets new, more ambitious targets for the use of renewable energy.

Revised version - in force from 20.11.2023

Main impacts of the Directive:

It sets a new, more ambitious target for the share of renewable energy in the EU's gross final energy consumption by 2030.
It extends support for renewables to other areas such as renewable hydrogen.
It aims to simplify and streamline the administrative procedures associated with the construction and operation of renewable energy installations.
It places greater emphasis on citizen involvement in the production and consumption of renewable energy, for example through community energy projects.

Share of renewable energy in EU energy consumption

Renewable energy will account for 42.5% of the EU's energy consumption by 2030, with a possible increase of 2.5% to 45%. This represents an increase in ambition from the previous target of 32% in 2018. Member States are also to set an indicative target for innovative renewable energy technologies of at least 5% of newly installed renewable energy capacity by 2030.

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Priority areas for accelerating RES deployment

The Directive introduces so-called acceleration (go-to) zones, where new renewable energy sources can be built much faster. Member States will choose these zones themselves, with the development of renewables now considered an "overriding public interest".

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The transposition of the Directive into Czech legislation results in the Draft Act on the Acceleration of the Use of RES and its links to the JES (Only Environmental Opinion). According to this, the necessary areas will be defined as specific areas in the PÚR (Spatial Development Policy) in the Czech Republic.

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Community Energy

The amendment to the Directive emphasises, among other things, the role of the Renewable Energy Community. There are many advantages of moving towards decentralised energy production, including the use of local energy sources, better security of local energy supply, shorter transport distances and lower losses in energy transmission. This decentralisation also helps development and social cohesion by creating sources of income and jobs at the local level.

In the Czech Republic, electricity sharing will be possible from 1 July 2026. From 1 January 2024, energy communities can be established.

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Administrative processes

The Directive also supports the simplification of administrative processes in the development of new renewable energy sources. Public authorities will set up at least one contact point where applicants will be given advice to facilitate the application for an administrative permit.

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Sectoral objectives

For fuel suppliers in the transport sector, RED III introduces two compliance options: a minimum of 29% renewable energy use by 2030 or a 14.5% reduction in GHG emissions intensity within the same timeframe.

In the industrial sector, RED III aims to increase the share of renewable energy for end-use and non-energy purposes (energy used in industrial production processes) by an average of 1.6% per year over the period 2021-2030. In addition, RED III sets a target for renewable non-biogenic fuels in industry that at least 42% of the hydrogen used for these purposes should come from renewable sources in 2030, rising to 60% by 2035. These targets are intended to encourage the transition to more environmentally friendly energy sources and should create the potential for innovation in renewable fuels and hydrogen technologies.

Context for the construction sector

In the building sector, RED III sets a target for Member States to achieve at least 49% of energy consumption in buildings from renewable sources by 2030. Waste heat and cold can be counted up to the upper limit of 20%.

Public buildings at national, regional and local level should set an example, e.g. by enabling renewable energy production on the roofs of these buildings.

In addition, there should be a requirement to use a specified minimum amount of renewable energy in new buildings and in existing buildings undergoing major renovation, where this is technically, functionally and economically feasible and where it does not adversely affect indoor air quality. This is to be achieved, inter alia, through efficient district heating and cooling using a significant proportion of energy from renewable sources and waste heat and cold.

Another objective is the use of energy labels, eco-labels or other relevant certificates or standards. The State should ensure, inter alia, the provision of adequate information and advice on renewable and highly energy efficient alternatives, as well as on available financial instruments and incentives to encourage a higher rate of replacement of old heating systems and a greater shift to renewable energy solutions

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Publications and resources on sustainable architecture

Subpages

Legislation on sustainability

Construction Products Regulation (CPR)

Corporate Sustainability Reporting Directive (CSRD)

Energy Efficiency Directive (EED)

Package “Fit for 55”

REPowerEU

Sustainable Finance Disclosure Regulation (SFDR)

Renewable Energy Directive (RED III)