Green Transition in the European and Hungarian Real Estate Markets
The European construction industry stands at a crossroads. The sector is responsible for more than 35% of the EU’s total waste production and 50% of its raw material consumption. For real estate developers, sustainability is no longer just a “nice commitment” but the foundation of investment stability. Tightening EU regulations (e.g., EU Taxonomy, EPBD, CSRD) and the need to avoid “stranded asset” risks require independent quality assurance.
In Hungary, for the first time in a long while, there is a glimmer of hope that as market processes clear up, professional criteria will once again dominate the leasing and renting of commercial real estate. This also necessitates the understanding, application, and careful selection of certifications.
Current Updates
The latest analysis by Buro Happold [1] compared the newest versions of the three market-leading systems for new buildings (DGNB v23/2030, BREEAM v7, LEED v5) across seven key areas. The author of this article, a building certification expert at TaxonomyReady, has tailored this comparison to the DGNB 2026 International New Construction version, supplemented by personal experience, to best serve the needs of the domestic audience.
This comparison is timely: new BREEAM projects have been restricted to the latest (v7) version for several months, while the registration period for previous LEED versions (v4 and v4.1) closes at the end of June [2]. The first international version of DGNB was launched in 2020, opening doors to a wider, non-German-speaking audience. The author also followed the professional review of the latest (second) international version; the draft is already available [3] and is expected to officially launch within weeks. In terms of structure and logic, it fully aligns with the parent version while allowing for the use of international standards and consideration of local specificities.
Let’s look at how each certification performs across the main thematic groups!
Resilience
Climate risk and vulnerability assessment is an increasingly common method to identify climate hazards related to a specific economic activity—in this case, the construction, renovation, or future operation of a building—after defining the timeframe and scope. This is followed by an analysis of sensitivity and exposure. By determining the severity of the expected impact and the probability of occurrence, a risk level is established, to which we propose adaptation measures. The goal is to reduce the risk levels associated with individual hazards to an acceptable degree.
The report highlights that DGNB and LEED have moved to the next level: climate risk analysis has been made a mandatory prerequisite. This means the certification process cannot even begin without it.
DGNB: Places special emphasis on nature-based, passive solutions, the development of on-site blue-green infrastructure, as well as adaptation measures and their monitoring.
LEED v5: Requires the implementation of adaptation measures for the two most pressing climate risks.
BREEAM v7: Less strict in this area; risk assessment is not mandatory, only an optional credit.
Circular Economy
The integration of digitalization and circular practices is becoming increasingly vital in sustainable building design and operation. Recent updates to certification systems actively encourage this shift. These two areas are closely linked, as digital tools provide the transparency and data necessary to implement circular strategies throughout the building’s entire life cycle.
Due to the EU’s ambitious circularity goals, this area is critical for developers.
DGNB: Currently the most comprehensive in this field; it introduced the “Building Resource Passport,” which documents the future recyclability of materials. Uniquely, the system awards points for demolition planning, encouraging materials to stay within the cycle.
BREEAM: Operates with a material efficiency indicator.
LEED: Primarily measures the proportion of materials from sustainable sources and the diversion of construction waste from landfills.
The Principle of Sufficiency (Moderation)
Many are familiar with the saying: “The most sustainable building is the one that is already built” [4]. Sufficiency challenges the dominant paradigm of unlimited growth and instead advocates for a transition to a sustainable lifestyle. It calls for a critical review of our needs, encouraging us to satisfy them using fewer resources.
The goal of sufficient construction practices is to minimize the demand for land, materials, energy, and floor space. Prioritizing renovation and reuse over demolition and new construction plays a central role in optimizing material use and mitigating environmental impacts. Furthermore, adaptability to future needs, shared use of spaces, and high space utilization are critical for reducing total floor area requirements.
In terms of energy, sufficiency seeks to reduce demand not only through efficient technologies but also by emphasizing passive design strategies that avoid energy consumption altogether. It also urges a critical review of thermal comfort standards. By integrating sufficiency into sustainability frameworks, we can align the built environment with the planet’s carrying capacity while promoting social equity and well-being.
DGNB: Leads the way here, rewarding economically prudent investments with demonstrable returns, flexible floor plans (for future convertibility), shared spaces, and renovation over new construction.
LEED & BREEAM: Encourage developers more indirectly through land-use efficiency and rewarding flexible design
Decarbonization
Effective decarbonization of the construction industry means considering the entire life cycle and addressing all associated emission sources. This includes increasing energy efficiency during the building’s use (operational carbon) and minimizing emissions related to resource extraction, material manufacturing, and construction processes (embodied carbon). Following the update of the EPBD (Energy Performance of Buildings Directive) [5], Member States are required to calculate and disclose life-cycle-based Global Warming Potential (GWP). This becomes mandatory for all new buildings over 1000 m² from 2028, and for all new buildings from 2030.
While measuring Whole-Life Carbon (WLC) used to provide “extra” points, it has now become part of the entry-level requirements in all three systems. The difference lies in the depth of verification and the strictness of the prescribed reduction pathways.
DGNB: Makes Life Cycle Assessment (LCA) and Life Cycle Costing (LCC) mandatory from the start. it sets specific, legally interpretable benchmarks and emphasizes the data quality of EPDs (Environmental Product Declarations).
LEED v5: Includes a new mandatory element: a decarbonization plan and the quantification of CO2 emissions (both operational and embodied). Without a strong decarbonization strategy, it is practically impossible to achieve high (Gold/Platinum) ratings, as half of the total points are linked to this topic. However, specific target values are not yet defined.
BREEAM v7: Particularly strong in reducing the energy demand of the operational phase. With the v7 update, it has caught up regarding the mandatory measurement of embodied carbon and expects the definition of a decarbonization pathway.
Note on Carbon Offsetting: DGNB and BREEAM—quite rightly—do not allow the inclusion of carbon offsetting to reach targets, whereas the LEED system still permits carbon credits and offsetting as tools for achieving carbon neutrality.
Biodiversity and Ecology
Europe’s natural environment is deteriorating at an alarming rate. How do building certifications attempt to mitigate this crisis? All systems consistently advocate for reducing potable water waste, utilizing alternative water sources (greywater, rainwater), and increasing awareness through metering. However, they apply different approaches to preserving biodiversity:
DGNB: Requires a comprehensive biodiversity strategy, supporting local wildlife through the planting of predominantly native and species-rich vegetation tailored to the site, and the long-term maintenance of ecologically valuable habitats.
LEED v5: Has shifted from mere protection toward active restoration.
BREEAM v7: Introduced a new metric for the precise measurement of Net Biodiversity Gain, which is somewhat similar to the Hungarian Green Area Certificate (Zöldfelületi Tanúsítvány) [6]
Quality of Life and Social Impact (S)
Social sustainability (the “S” in ESG) has gained prominence.
LEED v5: Quality of life has become a pillar, accounting for 25% of the points—inclusive design and community well-being are key.
DGNB: Traditionally strong here; it evaluates the integration of acoustic aspects in design, visual comfort, and indoor air quality measurements. Requirements for accessibility and fire safety are mandatory.
BREEAM: Highlights future mobility (e.g., electric vehicle charging, cycling infrastructure) and indoor comfort.
Compliance with Green Financing Conditions
The report suggests that DGNB has integrated EU Taxonomy requirements most deeply, allowing for the simultaneous submission of certification and Taxonomy verification. LEED and BREEAM show partial alignment, but their procedural integration is not yet direct.
Summary from a Developer's Perspective
Sustainability certification systems are undergoing a fundamental transformation: they are evolving from simple compliance tools into active drivers of the built environment’s transition. They don’t just verify minimum standards; they act as catalysts, offering structure and ambition for future-proof, regenerative practices.
While all three systems are effective tools for quality assurance:
DGNB is currently the most “Europe-specific,” particularly regarding the circular economy and regulatory compliance.
LEED v5 has taken a massive step forward in social responsibility and well-being.
BREEAM v7 has become much more ambitious regarding carbon benchmarks.
When choosing, consider: DGNB offers the deepest professional integration for the European market; LEED’s global recognition and renewed social focus may appeal to international investors; while BREEAM remains a flexible but significantly stricter alternative with v7.
Our expert team is available across the CEE region to provide full-scale management of building certification processes (DGNB, LEED, BREEAM), from design to final certification.
[1] Buro Happold (2026): Driving the Green Transformation in Europe – How DGNB, BREEAM and LEED Building Certifications respond to the pressing questions of the building sector. https://www.burohappold.com/wp-content/uploads/2026/04/Buro-Happold_EU_Certification_Comparison_Report.pdf
[2] https://www.usgbc.org/tools/leed-certification/deadlines
[4] Carl Elefante (2025) The greenest building… is the one that is already built. https://carlelefante.com/insights/the-greenest-building-is/