BACKGROUND

According to the United Nations Environment Programme in 2020, global building operations accounted for about 31% of total energy consumption. As a result, measures have been taken worldwide to reduce total emissions via the implementation of policies on eco-friendly construction and energy efficiency of existing buildings, and Korea has also made efforts to keep pace with the global trend.

In the past, real estate policies have mostly focused on improving the environmental aspects of public buildings, but regulations will begin to impact the private sector (commercial real estate) starting in 2023. All buildings with a GFA greater than 100,000 sq m with permits to start construction after 2023 are legally obligated to receive a government-accepted rating for greenhouse gas emissions (“GHG”).

KOREA REAL ESTATE ESG RELATED REGULATIONS

The Korean government has announced plans to enhance its Nationally Determined Contribution (NDC) to reduce total national GHG emissions by 4 0 % from 2018 levels (727.6MtCO2eq) by 2030 and achieve the goal of carbon neutrality by 2050.

Seoul, which accounted for 68.7% of carbon emissions from buildings in 2019, has been implementing the Seoul Building GHG Reduction Project from 2020 in line with the Korean government's policy stance to  encourage low-carbon buildings. This was included as a major task in the ‘2050 Greenhouse Gas Reduction Plan’ and ‘Seoul Vision 2030’. The policy direction is based on preemptive implementation in the public sector followed by expansion to the private sector. The Seoul Metropolitan Government set 2005 as the base year for peak greenhouse gas emissions and announced that it would promote 143 detailed projects with the goal of reducing emissions by 30% from 49.445 million tons in 2005 to 34.612 million tons in 2026.