A higher score doesn’t always mean better – what matters is working together
What Latvian entrepreneurs and builders need to know about the EU Taxonomy and BREEAM
In recent years, sustainable construction has become a hot topic – discussed by politicians, banks, developers, and society at large. Yet when it comes to concrete regulations and certifications, many feel lost in a jungle of complicated documents. To navigate this, let’s look at two key instruments – the EU Taxonomy and BREEAM certification. They are closely linked but serve different purposes.
What is the Taxonomy?
The EU Taxonomy is a regulation that defines which economic activities can be considered environmentally sustainable. Think of it as a classification system or “dictionary of green activities.” Its main goal is to direct capital toward projects that help reduce climate change, improve resource efficiency, and protect the environment.
The construction sector is especially important here – buildings consume large amounts of energy, produce waste, and generate CO₂ emissions. For a project to be Taxonomy-compliant, it must:
- Contribute to at least one of six environmental objectives (e.g., climate change mitigation or water protection).
- Do no significant harm in other areas.
- Comply with basic social and environmental safeguards.
- Meet specific technical screening criteria.
In practice, proving that an activity does “no significant harm” is the hardest part. For example, during renovation, hundreds of regulated chemicals cannot be used or produced. This criterion is the main reason why many projects fail to qualify under the Taxonomy.
From 2025, simplifications are expected – less bureaucracy and clearer indicators to focus on, helping businesses operate more efficiently.
What is BREEAM?
BREEAM (Building Research Establishment Environmental Assessment Method) is a voluntary international certification standard that evaluates a building’s sustainability across its entire life cycle – from design to operation and renovation.
Unlike the legally binding Taxonomy, BREEAM serves as a quality label, showing that a building is responsibly built and energy efficient. Its ratings range from “Pass” to “Outstanding.”
In Latvia, BREEAM is gaining popularity, with direct financial benefits: in Riga, new or fully renovated buildings with BREEAM (or an equivalent certificate) can receive a 50% property tax reduction for 10 years.
How do the Taxonomy and BREEAM work together?
Since 2024, BREEAM certification can also confirm compliance with the EU Taxonomy. This means developers who choose BREEAM can simultaneously demonstrate alignment with EU requirements.
However, a high BREEAM rating does not automatically guarantee Taxonomy compliance. For instance, a building rated “Outstanding” may lack a climate risk management plan, disqualifying it from the Taxonomy. Meanwhile, a “Very Good” building can fully comply if documentation is properly prepared.
This makes it essential to integrate both certification and Taxonomy requirements from the start of a project and prepare the necessary evidence carefully.
What does this mean for businesses?
Easier access to financing. Banks and investors increasingly require proof of sustainability. Taxonomy- and BREEAM-compliant projects are more attractive.
Competitiveness. Early adopters of dual compliance will stand out among clients and partners.
Financial benefits. In Riga – property tax reductions; elsewhere – better lending conditions.
Reputation. Sustainability is becoming a business card; clients and society value responsible practices.
Practical steps:
- Consider sustainability from project inception.
- Use BREEAM as a foundation to support Taxonomy compliance.
- Conduct legal-technical due diligence to identify requirements early.
- Work with independent experts to navigate the process.
The EU Taxonomy and BREEAM may seem complex, but in reality, they are tools that help businesses create higher-quality projects and secure a strong position in the future market. Those who achieve dual compliance first will gain not only tax breaks and better financing terms but also the reputation of being industry leaders.
Ultimately, everyone benefits – investors, entrepreneurs and society, who will enjoy buildings that are energy-efficient, healthy and environmentally friendly.
