Expert Guide on ESG in Real Estate in Slovenia

  1. Developer/Constructor
  2.  What are the currently applicable emission reduction goals and relevant  provisions for green real estate developments?
  3.  What are the key legal challenges regarding ESG laws, particularly in relation to EU-level measures?
  4.  Are there any specific laws that need to be considered in relation to energy efficiency and ESG factors when selecting project sites?
  5.  What incentives exist for promoting nearly Zero Energy Buildings (nZEB)?
  6. Are there measures or regulations in place for assessing a building's susceptibility to natural hazards and ensuring its resilience? Are environmental impact assessments mandatory?
  7.  Are there specific requirements for waste management, including the implementation of different treatments for different types of waste?
  8.  Are there distinct safety rules for construction sites and specific regulations during the developmental phase?
  9.  Are there established metrics for building energy efficiency? What common efficiency certificates exist and what are their implications?
  10.  What are the obligations regarding energy certificates, performance requirements, and heating types, particularly to promote emission reduction?
  11.  Are there any requirements that need to be followed regarding the installation of alternative energy supply systems (e.g. rooftop photovoltaic)?
  12. Are there any specific requirements that must be adhered to in relation to the installation of charging points for electric vehicles?
  13. Is it mandatory for the contracting authority to consider environmental aspects in public construction procurement procedures?
  14.  Are there special rules for hiring construction workers from third countries due to the labor shortage?
  15.  Are there any obligation to adapt the building to certain standards or to maintain existing appliances for people with special needs?
  16. Investor
  17.  What are the currently applicable emission reduction goals and relevant  provisions for green real estate developments?
  18.  What are the key legal challenges regarding ESG laws, particularly in relation to EU-level measures?
  19.  Are there any specific laws that need to be considered in relation to energy efficiency and ESG factors when selecting project sites?
  20.  What incentives exist for promoting nearly Zero Energy Buildings (nZEB)?
  21. Are there measures or regulations in place for assessing a building's susceptibility to natural hazards and ensuring its resilience? Are environmental impact assessments mandatory?
  22.  Are there specific requirements for waste management, including the implementation of different treatments for different types of waste?
  23. Are there established metrics for building energy efficiency? What common efficiency certificates exist, and what are their implications?
  24.  What are the obligations regarding energy certificates, performance requirements, and heating types, particularly to promote emission reduction?
  25.  Are there any requirements that need to be followed regarding the installation of alternative energy supply systems (e.g. rooftop photovoltaic)?
  26. Are there any specific requirements that must be adhered to in relation to the installation of charging points for electric vehicles?
  27. What are the investor's main obligations when it comes to ensuring compliance with the CSDD?
  28. What are the main implications when it comes to ESG/non-financial reporting obligations?
  29. Owner / operator
  30.  What are the currently applicable emission reduction goals and relevant  provisions for green real estate developments?
  31.  What are the key legal challenges regarding ESG laws, particularly in relation to EU-level measures?
  32.  Are there any specific laws that need to be considered in relation to energy efficiency and ESG factors when selecting project sites?
  33.  What incentives exist for promoting nearly Zero Energy Buildings (nZEB)?
  34. Are there measures or regulations in place for assessing a building's susceptibility to natural hazards and ensuring its resilience? Are environmental impact assessments mandatory?
  35.  Are there specific requirements for waste management, including the implementation of different treatments for different types of waste?
  36.  Are there distinct safety rules for construction sites and specific regulations during the developmental phase?
  37.  What are the obligations regarding energy certificates, performance requirements, and heating types, particularly to promote emission reduction?
  38.  Are there any requirements that need to be followed regarding the installation of alternative energy supply systems (e.g. rooftop photovoltaic)?
  39. Are there any specific requirements that must be adhered to in relation to the installation of charging points for electric vehicles?
  40. Is it mandatory for the contracting authority to consider environmental aspects in public construction procurement procedures?
  41. What are the investor's main obligations when it comes to ensuring compliance with the CSDD?
  42. What are the main implications  when it comes to ESG/non-financial reporting obligations?
  43.  Are there any obligation to adapt the building to certain standards or to maintain existing appliances for people with special needs?

Developer/Constructor

1. What are the currently applicable emission reduction goals and relevant  provisions for green real estate developments?

Buildings caused 13.8% of Slovenia's greenhouse gas emissions in 2020, amounting to 2.2M tonnes. With the exception of non-profit apartments, property values are not tied to sustainability. 

The Slovenian National Energy and Climate Plan from 2020 set targets for emission reduction by sector, with the aim of reducing emissions from buildings by 70% from 2005 levels by 2030, and of reducing final energy consumption in buildings by 20% compared to 2005 by 2030, in order to achieve climate neutrality by 2050, in line with the EU Green Deal. The Building Act cites the promotion of sustainable construction as one of its key objectives. Sustainable construction indicators are currently in preparation under the integral project CARE4CLIMATE coordinated by the Ministry of the Environment, Climate and Energy. 

Real estate developers must guarantee consistency of the construction plan with the relevant EU and national legislation. Challenges encompass adherence to standards laid down by the Building Act and the Environmental Protection Act and their implementing documents. Developers must navigate social compliance, safety regulations, and sustainable practices with respect to ESG laws. Striking a balance between these factors, costs, and property performance is imperative. 

Environmental impact assessment: 

Before any development or construction works likely to have significant effects on the environment, an environmental impact assessment must be carried out, and an environmental permit must be obtained from the Ministry. In connection with construction that may have significant effects on the environment and for which a building permit is required, an environmental impact assessment must be carried out in the context of issuing an integrated building permit. 

Energy efficiency and emissions: Energy efficiency is an important consideration in spatial planning. The Spatial Management Act includes considerations of energy efficiency in preparation of new documentation as the basis of spatial development. 

3. Are there any specific laws that need to be considered in relation to energy efficiency and ESG factors when selecting project sites?

Project site selection is pivotal for energy efficiency and ESG compliance. Key considerations involve: 

Spatial Management Act (ZUreP-3): Sustainable spatial development and energy efficiency must be considered in the process of preparing municipal zoning plans. Municipalities may allow planned investments to diverge from established spatial plans if they offer solutions which are compliant with energy efficiency goals or better with respect to energy efficiency. 

Act on the siting of installations for generation of electricity from renewable energy sources (ZUNPEOVE): This Act regulates priority areas for the siting of photovoltaic and wind energy installations in general (such as rooftops, service buildings, areas of former mines and quarries, and certain landfills). These (potential) priority areas will be further regulated by a national strategic act and further specified by a national implementing spatial act.  

Water Act (Zakon o vodah): For development or construction likely to have a permanent or temporary effect on the water regime or the status of water mandates, a water permit must be obtained in line with legislation on spatial planning and construction of buildings. The Water Act also defines special conditions and procedures for the construction of power generation and storage facilities, and specifically allows the setting-up of photovoltaic systems in certain areas.  

4. What incentives exist for promoting nearly Zero Energy Buildings (nZEB)?

On the EU level, the Energy Performance of Buildings Directive (2010/31/EU) and the Energy Efficiency Directive (2012/27/EU) introduced the concept of nearly zero-energy buildings (NZEB). On the national level, in line with the Act on Energy Efficiency, all newly constructed buildings must be NZEBs and must be constructed in line with the Rules on efficient use of energy in buildings.  

The Slovenian Eco Fund (Eko sklad) provides financial incentives for NZEBs, such as low-cost loans and non-refundable subsidies. For businesses, subsidies are focused on the construction of new buildings, and all calls related to NZEBs for both subsidies and loans are currently open. The current call for tenders includes EUR 2,720,000 in non-refundable grants and EUR 3,000,000 in loans. The financing each project can receive is EUR 85-150 per square metre of the NZEB’s surface, dependent on the construction and insulation material, and can represent at most 30% of the investment’s justified costs. Loans may be granted from a minimum of EUR 25,000 up to a maximum of EUR 2,000,000. 

5. Are there measures or regulations in place for assessing a building's susceptibility to natural hazards and ensuring its resilience? Are environmental impact assessments mandatory?

Properties located in hazard zones often face usage restrictions due to natural hazards. Spatial planning aims to mitigate such hazards when complete exclusion is not possible. Restrictions with respect to construction and development differ across individual spatial (state or municipal) planning documents and depend on the type of protection regime (if any) applicable to the property in question.  

If a certain property is subject to a regime of cultural heritage protection, a regime of valuable natural features protection (wildlife sanctuary), agricultural and forest area protection, or defence protection, the developer/builder may be limited with respect to construction or renovation of such property, or may even not be able to obtain a building permit.  

Environmental impact assessment (EIA) is obligatory for projects significantly impacting the environment, as mandated by the Environmental Protection Act (ZVO-2). The underlying Decree on activities affecting the environment that require an environmental impact assessment (Uredba o posegih v okolje, za katere je treba izvesti presojo vplivov na okolje) lists quantitative thresholds above which an EIA is required. In addition, any building exceeding certain dimensions requires an EIA. 

6. Are there specific requirements for waste management, including the implementation of different treatments for different types of waste?

Core provisions on waste management are included in the Environmental Protection Act (Zakon o varstvu okolja). The Act categorizes waste types and specifies means of waste limitation, management, recycling, and disposal. Detailed treatment of waste is regulated by governmental decrees. The Decree on Waste (Uredba o odpadkih, 2022) specifies the general hierarchy of waste treatment, where reuse and recycling of waste have priority over disposal. Annex 3 to this decree contains criteria for the classification of dangerous waste. Note that until 2024, certain provisions of the old decree from 2015 still apply. The Decree on management of waste arising from construction work (Uredba o ravnanju z odpadki, ki nastanejo pri gradbenih delih) regulates the treatment of waste in cases of construction, reconstruction, adaptation, renovation, or removal of a building. The Building Act (Gradbeni zakon) sets out the general requirement of waste minimization in buildings.

7. Are there distinct safety rules for construction sites and specific regulations during the developmental phase?

As regulated by the Rules on construction sites (Pravilnik o gradbiščih), every construction site must be fenced in and sufficiently marked to rule out danger for passers-by and traffic. For most construction sites (excluding simple projects), the constructor must also prepare a construction site organization plan (načrt organizacije gradbišča), which must be approved by the investor and must include more detailed safety measures for prevention of damage to third persons. Note that the current Rules on construction sites are applicable only until the new Decree on construction sites enters into force. In addition to the general Health and Safety at Work Act (Zakon o varnosti in zdravju pri delu), the Decree on safety and health protection at work at temporary and mobile construction sites (Uredba o zagotavljanju varnosti in zdravja pri delu na začasnih in premičnih gradbiščih) regulates worker safety measures on construction sites. 

8. Are there established metrics for building energy efficiency? What common efficiency certificates exist and what are their implications?

Only authorized professionals in project design or technical consulting and employers of such professionals may issue valid energy certificates in accordance with the Rules on the methodology for the production and issuance of energy performance certificates for buildings (Pravilnik o metodologiji izdelave in izdaji energetskih izkaznic stavb, 2023). Currently, there are no recognized voluntary certifications in Slovenia. Pursuant to the Act on Energy Efficiency (Zakon o učinkoviti rabi energije), a building may have no more than one energy performance certificate at any given time. 

9. What are the obligations regarding energy certificates, performance requirements, and heating types, particularly to promote emission reduction?

The legal framework for energy performance certificates (EPCs) and energy requirements in Slovenia is derived from EU directives transposed into national law. The Rules on the methodology for the production and issuance of energy performance certificates mandate that EPCs must consider energy indicators such as heating, energy consumption, and CO2 emissions of the building. These indicators are ranked in classes from A1 to G. 

Property sale or rental advertisements must include the prescribed energy indicator listed in the EPC. Certain buildings do not need a valid EPC, such as industrial buildings and warehouses without heating and cooling systems, as well as simple and smaller buildings. 

10. Are there any requirements that need to be followed regarding the installation of alternative energy supply systems (e.g. rooftop photovoltaic)?

The new Act on the siting of installations for generation of electricity from renewable energy sources (ZUNPEOVE) prescribes an obligation to install photovoltaic power plants on all new buildings with a roof area of 1,000 sqm or more (and, after an appropriate transitional period, also on existing buildings with a roof area of more than 1,700 sqm), unless this is not possible due to the type and location of the building or other conditions, such as the possibility of connection to the electricity grid. 

Installation of alternative energy supply systems may require a construction permit, depending on the power capacity, placement, and mode of connection to the grid. For each alternative supply system, a permit for connection to the grid must also be obtained, which is issued by the owner of the respective distribution network. If facilities with a rated capacity greater than 10 MW are connected to the public grid, obtaining a final energy permit is also required. 

11. Are there any specific requirements that must be adhered to in relation to the installation of charging points for electric vehicles?

When constructing new buildings and carrying out major renovations, the investor must ensure that the infrastructure prescribed by the Act on Energy Efficiency (Zakon o učinkoviti rabi energije) is in place for laying electrical cables and installing enough charging points. 

For instance, for non-residential buildings with more than ten parking spaces, the owner must ensure the installation of at least one charging point for electric vehicles and the installation of infrastructure for the wiring of electric cables for at least one out of every five parking spaces (to enable the subsequent installation of charging points for electric vehicles). 

Obligations to install charging points also apply to the construction and major renovation of off-street rest areas intended for short stopovers for road users, as well as to stand-alone car parks for motor vehicles. 

In general, a building permit is not required for the installation of charging stations. For connecting charging stations to the grid, a permit must be obtained from the distribution network operator. 

12. Is it mandatory for the contracting authority to consider environmental aspects in public construction procurement procedures?

Yes, according to the Green Public Procurement Regulation (Uredba o zelenem javnem naročanju), environmental considerations are mandatory in public procurement procedures for 22 public procurement items (e.g. design or execution of road construction, electricity, electronic office equipment, etc.). 

When awarding public contracts, the contracting authority must particularly consider the following environmental aspects: 

  • energy efficiency and the use of renewable or other alternative energy sources; 
  • efficient use of water and its reuse; 
  • efficient use of resources; 
  • prevention of risks to health or the environment, in particular air, water and soil pollution, and loss of biodiversity; 
  • reuse of secondary raw materials and products, and prevention and reduction of waste, including through longer lifetimes of goods and construction; 
  • promoting the use of reusable products instead of disposable ones, encouraging the repair, treatment and recovery of end-of-life products and waste for reuse and recycling. 

13. Are there special rules for hiring construction workers from third countries due to the labor shortage?

There are no special rules. Rules for employment of workers from abroad are laid down in the Employment, Self-employment and Work of Foreigners Act (Zakon o zaposlovanju, samozaposlovanju in delu tujcev). A worker from a third country requires either a single permit for work and residence in Slovenia, or an EU Blue Card (for highly skilled workers). Consent of the Employment Agency of Slovenia is required to obtain the permit.  

As of yet, no specific legislation aimed at addressing the labour shortage in construction has been adopted. Construction workers may be employed under the general provisions for employment of foreign workers. Employment of workers from Bosnia and Herzegovina as well as Serbia is facilitated by international treaties on labour migration concluded with these countries. 

14. Are there any obligation to adapt the building to certain standards or to maintain existing appliances for people with special needs?

The Equalisation of Opportunities for Persons with Disabilities Act (Zakon o izenačevanju možnosti invalidov) seeks to prevent discrimination against people with disabilities and to enable equal opportunities for them in all aspects of life. It mandates the technical adaptation of all structures in public use with various technical devices, visual and sonic indicators, and other measures beneficial to those with physical, visual and hearing impairments. 

Further, the Building Act (Gradbeni zakon) prescribes that entrances must allow people with particular functional disabilities to use them independently, and must be equipped with the necessary signalling and equipment for unhindered movement, communication and orientation, and that the number of parking spaces for disabled persons near the main entrance must be sufficient. 

Additional obligations are set out by the Rules on universal construction and the use of construction works (Pravilnik o univerzalni graditvi in uporabi objektov) which, among others, govern the application of construction standards SIST ISO 21542 on accessibility and usability of the built environment, SIST 1186 on tactile walking surface indicators for blind and partially sighted persons, and SIST EN 60118-4 on electroacoustics. 

 

Investor

1. What are the currently applicable emission reduction goals and relevant  provisions for green real estate developments?

Buildings caused 13.8% of Slovenia's greenhouse gas emissions in 2020, amounting to 2.2M tonnes. Property values are not tied to sustainability. 

The Slovenian National Energy and Climate Plan from 2020 set targets for emission reduction by sector, with the aim of reducing emissions from buildings by 70% from 2005 levels by 2030, and of reducing final energy consumption in buildings by 20% compared to 2005 by 2030, in order to achieve climate neutrality by 2050, in line with the EU Green Deal. The Building Act cites the promotion of sustainable construction as one of its key objectives. Sustainable construction indicators are currently in preparation under the integral project CARE4CLIMATE coordinated by the Ministry of the Environment, Climate and Energy. 

Real estate investors must keep up with EU regulations and their national adaptations related to ESG, such as:  

Environmental impact assessment: Before any development or construction works likely to have significant effects on the environment, an environmental impact assessment must be carried out, and an environmental permit must be obtained from the Ministry. In connection with construction that may have significant effects on the environment and for which a building permit is required, an environmental impact assessment must be carried out in the context of issuing of an integrated building permit. 

Energy efficiency and emissions: Energy efficiency is an important consideration in spatial planning. The Spatial Management Act includes considerations of energy efficiency in preparation of new documentation as the basis of spatial development.  

Liability and due diligence: Due diligence is crucial for assessing ESG-related risks before property acquisition. Legislation such as the Environmental Protection Act must be observed to assess the liability of the investor with respect to environmental externalities. 

Sustainability disclosure and reporting: Compliance with the EU Taxonomy Regulation and reporting ESG performance entail rising expectations. Even though the reporting rules of the Corporate Sustainability Reporting Directive will be applicable only in 2024, Slovenia has already implemented its norms on non-financial reporting, which include information on the environment, in the Slovenian Companies Act. 

Green financing: Meeting green investment criteria poses challenges due to the EU Taxonomy Regulation requiring ESG integration into financing decisions. Green financing is supported by certain public institutions, such as the Eco Fund (Eko sklad).  

3. Are there any specific laws that need to be considered in relation to energy efficiency and ESG factors when selecting project sites?

Project site selection is pivotal for energy efficiency and ESG compliance. Key considerations involve: 

Spatial Management Act (ZUreP-3): Sustainable spatial development and energy efficiency must be considered in the process of preparing municipal zoning plans. Municipalities may allow planned investments to diverge from established spatial plans if they offer solutions which are compliant with energy efficiency goals or better with respect to energy efficiency. 

Act on the siting of installations for generation of electricity from renewable energy sources (ZUNPEOVE): This Act regulates priority areas for the siting of photovoltaic and wind energy installations in general (such as rooftops, service buildings, areas of former mines and quarries, and certain landfills). These (potential) priority areas will be further regulated by a national strategic act and further specified by a national implementing spatial act. 

Water Act (Zakon o vodah): For development or construction likely to have a permanent or temporary effect on the water regime or the status of water mandates, a water permit must be obtained in line with legislation on spatial planning and construction of buildings. The Water Act also defines special conditions and procedures for the construction of power generation and storage facilities, and specifically allows the setting-up of photovoltaic systems in certain areas.  

4. What incentives exist for promoting nearly Zero Energy Buildings (nZEB)?

On the EU level, the Energy Performance of Buildings Directive (2010/31/EU) and the Energy Efficiency Directive (2012/27/EU) introduced the concept of nearly zero-energy buildings (NZEB). On the national level, in line with the Act on Energy Efficiency, all newly constructed buildings must be NZEBs and must be constructed in line with the Rules on efficient use of energy in buildings.  

The Slovenian Eco Fund (Eko sklad) provides financial incentives for NZEBs, such as low-cost loans and non-refundable subsidies. For businesses, subsidies are focused on the construction of new buildings, and all calls related to NZEBs for both subsidies and loans are currently open. The current call for tenders includes EUR 2,720,000 in non-refundable grants and EUR 3,000,000 in loans. The financing each project can receive is EUR 85-150 per square metre of the NZEB’s surface, dependent on the construction and insulation material, and can represent at most 30% of the investment’s justified costs. Loans may be granted from a minimum of EUR 25,000 up to a maximum of EUR 2,000,000.

5. Are there measures or regulations in place for assessing a building's susceptibility to natural hazards and ensuring its resilience? Are environmental impact assessments mandatory?

ESG's growing importance makes real estate financing pricier and tougher if there are no environmentally sustainable options for lenders. To earn this label, investments must align with the EU Taxonomy Regulation (2020/852), which defines eco-criteria for investments and bolsters sustainable finance. Sustainability assessment relies on specific delegated acts alongside the Taxonomy Regulation. In real estate, the EU Taxonomy Climate Delegated Act covers new buildings, renovations, maintenance, repair, and ownership acquisition. The Slovenian Sovereign Sustainability Bond Framework is aligned with the Technical Screening Criteria of the EU Taxonomy for a significant part. Internationally, the Framework aligns with the Sustainability Bond Guidelines 2021, the Green Bond Principles 2021, and the Social Bond Principles 2021. 

6. Are there specific requirements for waste management, including the implementation of different treatments for different types of waste?

ESG's growing importance has an influence on Slovenian real estate transaction agreements, which in practice translates into: 

Extended due diligence scope: Documents regarding ESG matters need to be considered carefully to ensure they are not contrary to the investor’s intentions for the property, and to assess potential risks and liabilities linked to the property. Compliance with regulations, contamination assessment, and energy efficiency evaluation minimize future environmental liabilities. 

Expanded warranty and liability regime: ESG matters significantly shape warranty and liability. Transparent ESG disclosure, circular economy, compliance with laws, certifications, sustainability, and ESG's impact on property value at exit are crucial considerations. 

Energy efficiency and retrofitting: Investors must assess property energy efficiency and retrofitting needs to meet energy targets. Balancing upfront costs, long-term savings, and energy performance standards poses challenges. 

Heightened MAC provisions relevance: Material adverse changes (MAC) rules have gained importance, allowing parties to address unforeseen circumstances affecting deal feasibility or value. 

7. Are there established metrics for building energy efficiency? What common efficiency certificates exist, and what are their implications?

Only authorized professionals in project design or technical consulting and employers of such professionals may issue valid energy certificates in accordance with the Rules on the methodology for the production and issuance of energy performance certificates for buildings (Pravilnik o metodologiji izdelave in izdaji energetskih izkaznic stavb, 2023). Currently, there are no recognized voluntary certifications in Slovenia. Pursuant to the Act on Energy Efficiency (Zakon o učinkoviti rabi energije), a building may have no more than one energy performance certificate at any given time. 

8. What are the obligations regarding energy certificates, performance requirements, and heating types, particularly to promote emission reduction?

The legal framework for energy performance certificates (EPCs) and energy requirements in Slovenia is derived from EU directives transposed into national law. The Rules on the methodology for the production and issuance of energy performance certificates mandate that EPCs must consider energy indicators such as heating, energy consumption, and CO2 emissions of the building. These indicators are ranked in classes from A1 to G. Property sale or rental advertisements must include the prescribed energy indicator listed in the EPC.  

After obtaining an occupancy permit, the investor must present a valid EPC to the tenant or buyer. The investor must also conduct a cost-benefit analysis for efficient heating and cooling of certain industrial buildings. Certain buildings do not need a valid EPC, such as industrial buildings and warehouses without heating and cooling systems, as well as simple and smaller buildings. 

9. Are there any requirements that need to be followed regarding the installation of alternative energy supply systems (e.g. rooftop photovoltaic)?

The new Act on the siting of installations for generation of electricity from renewable energy sources (ZUNPEOVE) prescribes an obligation to install photovoltaic power plants on all new buildings with a roof area of 1,000 sqm or more (and, after an appropriate transitional period, also on existing buildings with a roof area of more than 1,700 sqm), unless this is not possible due to the type and location of the building or other conditions, such as the possibility of connection to the electricity grid. 

Installation of alternative energy supply systems may require a construction permit, depending on the power capacity, placement, and mode of connection to the grid. For each alternative supply system, a permit for connection to the grid must also be obtained, which is issued by the owner of the respective distribution network. If facilities with a rated capacity greater than 10 MW are connected to the public grid, obtaining a final energy permit is also required. 

10. Are there any specific requirements that must be adhered to in relation to the installation of charging points for electric vehicles?

When constructing new buildings and carrying out major renovations, the investor must ensure that the infrastructure prescribed by the Act on Energy Efficiency (Zakon o učinkoviti rabi energije) is in place for laying electrical cables and installing enough charging points. 

For instance, for non-residential buildings with more than ten parking spaces, the owner must ensure the installation of at least one charging point for electric vehicles and the installation of infrastructure for the wiring of electric cables for at least one out of every five parking spaces (to enable the subsequent installation of charging points for electric vehicles). 

Obligations to install charging points also apply to the construction and major renovation of off-street rest areas intended for short stopovers for road users, as well as to stand-alone car parks for motor vehicles. 

In general, a building permit is not required for the installation of charging stations. For connecting charging stations to the grid, a permit must be obtained from the distribution network operator. 

11. What are the investor's main obligations when it comes to ensuring compliance with the CSDD?

The Corporate Sustainability Due Diligence Directive (CSDDD) aims to promote sustainability in business operations and basically requires certain companies to conduct comprehensive due diligence of their supply chain to identify, address, and mitigate certain environmental and social risks. Since the CSDDD is currently still at the drafting stage, it does not trigger specific obligations for real estate investors in Slovenia. Implementation of CSDDD policies is left to the private sector’s discretion. The Slovenian legislator has not implemented national laws that would anticipate the subject matters of the CSDDD. 

12. What are the main implications when it comes to ESG/non-financial reporting obligations?

Slovenia enforces ESG reporting under the EU Non-Financial Reporting Directive (NFRD) in its Companies Act (Zakon o gospodarskih družbah).  

The Companies Act requires Slovenian public-interest companies with more than 500 employees to include detailed statements in their annual reports on environmental, social, human resources, human rights, anti-corruption and anti-bribery issues necessary to understand the development, performance and position of the company and the impact of its activities. 

Real estate investors may require further ESG compliance reporting under the EU Taxonomy Regulation. Real estate funds must also address Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector for green property project ESG criteria disclosure. 

 

Owner / operator

1. What are the currently applicable emission reduction goals and relevant  provisions for green real estate developments?

Buildings caused 13.8% of Slovenia's greenhouse gas emissions in 2020, amounting to 2.2M tonnes. Property values are not tied to sustainability. 

The Slovenian National Energy and Climate Plan from 2020 set targets for emission reduction by sector, with the aim of reducing emissions from buildings by 70% from 2005 levels by 2030, and of reducing final energy consumption in buildings by 20% compared to 2005 by 2030, in order to achieve climate neutrality by 2050, in line with the EU Green Deal. The Building Act cites the promotion of sustainable construction as one of its key objectives. Sustainable construction indicators are currently in preparation under the integral project CARE4CLIMATE coordinated by the Ministry of the Environment, Climate and Energy. 

Real estate owners/operators must keep up with EU regulations and their national adaptations related to ESG, such as:  

Energy efficiency and emissions: Pursuant to the Energy Act, the real property owner must submit an energy performance certificate to the buyer upon purchase of the building. In the event of a lease, the lessor must hand over the energy performance certificate to the lessee prior to or with the commencement of the lease. Rules on efficient use of energy in buildings also have to be considered with respect to energy efficiency. 

Tenant rights and social considerations: Upholding social norms, health and safety rules, and ESG practices entails balancing these factors with investment goals.  

Liability and due diligence: Due diligence is crucial for assessing ESG-related risks before property acquisition. Legislation such as the Environmental Protection Act must be observed to assess the liability of the owner/operator with respect to environmental externalities. 

Sustainability disclosure and reporting: Compliance with the EU Taxonomy Regulation and reporting ESG performance entail rising expectations. Even though the reporting rules of the Corporate Sustainability Reporting Directive will be applicable only in 2024, Slovenia has already implemented its norms on non-financial reporting, which include information on the environment, in the Slovenian Companies Act. 

Green financing: Meeting green investment criteria poses challenges due to the EU Taxonomy Regulation requiring ESG integration into financing decisions. Green financing is supported by certain public institutions, such as the Eco Fund (Eko sklad).  

3. Are there any specific laws that need to be considered in relation to energy efficiency and ESG factors when selecting project sites?

Project site selection is pivotal for energy efficiency and ESG compliance. Key considerations involve: 

Spatial Management Act (ZUreP-3): Sustainable spatial development and energy efficiency must be considered in the process of preparing municipal zoning plans. Municipalities may allow planned investments to diverge from established spatial plans if they offer solutions which are compliant with energy efficiency goals or better with respect to energy efficiency. 

Act on the siting of installations for generation of electricity from renewable energy sources (ZUNPEOVE): This Act regulates priority areas for the siting of photovoltaic and wind energy installations in general (such as rooftops, service buildings, areas of former mines and quarries, and certain landfills). These (potential) priority areas will be further regulated by a national strategic act and further specified by a national implementing spatial act. 

Water Act (Zakon o vodah): For development or construction likely to have a permanent or temporary effect on the water regime or the status of water mandates, a water permit must be obtained in line with legislation on spatial planning and construction of buildings. The Water Act also defines special conditions and procedures for the construction of power generation and storage facilities, and specifically allows the setting-up of photovoltaic systems in certain areas.  

4. What incentives exist for promoting nearly Zero Energy Buildings (nZEB)?

On the EU level, the Energy Performance of Buildings Directive (2010/31/EU) and the Energy Efficiency Directive (2012/27/EU) introduced the concept of nearly zero-energy buildings (NZEB). On the national level, in line with the Act on Energy Efficiency, all newly constructed buildings must be NZEBs and must be constructed in line with the Rules on efficient use of energy in buildings.  

The Slovenian Eco Fund (Eko sklad) provides financial incentives for NZEBs, such as low-cost loans and non-refundable subsidies. For businesses, subsidies are focused on the construction of new buildings, and all calls related to NZEBs for both subsidies and loans are currently open. The current call for tenders includes EUR 2,720,000 in non-refundable grants and EUR 3,000,000 in loans. The financing each project can receive is EUR 85-150 per square metre of the NZEB’s surface, dependent on the construction and insulation material, and can represent at most 30% of the investment’s justified costs. Loans may be granted from a minimum of EUR 25,000 up to a maximum of EUR 2,000,000. 

5. Are there measures or regulations in place for assessing a building's susceptibility to natural hazards and ensuring its resilience? Are environmental impact assessments mandatory?

Properties in hazard zones face usage constraints due to natural hazards. Spatial (state and municipal) planning aims to mitigate these risks, including avalanches, floods, mudslides, and more, as natural hazards endanger lives and property. Events impact properties, especially if located in hazard zones. Building permits, spatial plans, and location information (also containing information on applicable protection regimes) offer hazard risk insights.  

If a certain property is subject to a regime of cultural heritage protection, a regime of valuable natural features protection (wildlife sanctuary), agricultural and forest area protection, or defence protection, the owner/operator may be limited with respect to reconstruction or renovation of such property.  

6. Are there specific requirements for waste management, including the implementation of different treatments for different types of waste?

Core provisions on waste management are included in the Environmental Protection Act (Zakon o varstvu okolja). The Act categorizes waste types and specifies means of waste limitation, management, recycling, and disposal. Detailed treatment of waste is regulated by governmental decrees. The Decree on Waste (Uredba o odpadkih, 2022) specifies the general hierarchy of waste treatment where reuse and recycling of waste have priority over disposal. Annex 3 to this decree contains criteria for the classification of dangerous waste. Note that until 2024, certain provisions of the old decree from 2015 still apply. The owner or operator of a waste management facility is responsible for the prescribed treatment of waste, except for waste that is the responsibility of the producer. The owner or operator must cover all costs of waste management, including the cost of the public waste service infrastructure. The Building Act (Gradbeni zakon) sets out the general requirement of waste minimization in buildings.  

7. Are there distinct safety rules for construction sites and specific regulations during the developmental phase?

Different laws and regulations from the health and safety field apply to property owners, such as: 

  • rules on fire safety in buildings,  
  • rules on the ventilation and air conditioning of buildings, 
  • rules on protection against noise in buildings, 
  • rules on lightning protection systems of buildings, 
  • rules on protection of buildings against humidity. 

In accordance with the Housing Act (Stanovanjski zakon), multi-apartment property owners are under a general obligation to guarantee health and safety in multi-apartment buildings. 

In Slovenia, green lease agreements usually contain clauses on charging operating costs based on consumption, sharing data on energy and/or water consumption, and/or obligating the landlord, the tenant or both parties to commit to renewable forms of energy. 

Such green lease clauses can be enforced if they are not in conflict with the data privacy requirements outlined in the GDPR and the Personal Data Protection Act, and the general provisions of the Obligations Code (Obligacijski zakonik). 

8. Are there established metrics for building energy efficiency? What common efficiency certificates exist and what are their implications?

Only authorized professionals in project design or technical consulting and employers of such professionals may issue valid energy certificates in accordance with the Rules on the methodology for the production and issuance of energy performance certificates for buildings (Pravilnik o metodologiji izdelave in izdaji energetskih izkaznic stavb, 2023). Currently, there are no recognized voluntary certifications in Slovenia. Pursuant to the Act on Energy Efficiency (Zakon o učinkoviti rabi energije), a building may have no more than one energy performance certificate at any given time. 

9. What are the obligations regarding energy certificates, performance requirements, and heating types, particularly to promote emission reduction?

The owner or user of the building may obtain an energy performance certificate. The legal framework for energy performance certificates (EPCs) and energy requirements in Slovenia is derived from EU directives transposed into national law. The Rules on the methodology for the production and issuance of energy performance certificates mandate that EPCs must consider energy indicators such as heating, energy consumption, and CO2 emissions of the building. These indicators are ranked in classes from A1 to G. 

Property sale or rental advertisements must include the prescribed energy indicator listed in the EPC. The owner is obligated to present a valid EPC of the building or relevant part of the building for each sale or lease of the property in question. The owner must do so before the conclusion of the sale or lease contract but is exempt from this obligation for rents shorter than one year, sales in enforcement and liquidation, and sales of old buildings that no longer meet requirements for occupancy. Certain buildings do not need a valid EPC, such as industrial buildings and warehouses without heating and cooling systems, as well as simple and smaller buildings. 

10. Are there any requirements that need to be followed regarding the installation of alternative energy supply systems (e.g. rooftop photovoltaic)?

The new Act on the siting of installations for generation of electricity from renewable energy sources (ZUNPEOVE) prescribes an obligation to install photovoltaic power plants on all new buildings with a roof area of 1,000 sqm or more (and, after an appropriate transitional period, also on existing buildings with a roof area of more than 1,700 sqm), unless this is not possible due to the type and location of the building or other conditions, such as the possibility of connection to the electricity grid. 

Installation of alternative energy supply systems may require a construction permit, depending on the power capacity, placement, and mode of connection to the grid. For each alternative supply system, a permit for connection to the grid must also be obtained, which is issued by the owner of the respective distribution network. If facilities with a rated capacity greater than 10 MW are connected to the public grid, obtaining a final energy permit is also required. 

11. Are there any specific requirements that must be adhered to in relation to the installation of charging points for electric vehicles?

When constructing new buildings and carrying out major renovations, the investor must ensure that the infrastructure prescribed by the Act on Energy Efficiency (Zakon o učinkoviti rabi energije) is in place for laying electrical cables and installing enough charging points. 

For instance, for non-residential buildings with more than ten parking spaces, the owner must ensure the installation of at least one charging point for electric vehicles and the installation of infrastructure for the wiring of electric cables for at least one out of every five parking spaces (to enable the subsequent installation of charging points for electric vehicles). 

Obligations to install charging points also apply to the construction and major renovation of off-street rest areas intended for short stopovers for road users, as well as to stand-alone car parks for motor vehicles. 

In general, a building permit is not required for the installation of charging stations. For connecting charging stations to the grid, a permit must be obtained from the distribution network operator. 

12. Is it mandatory for the contracting authority to consider environmental aspects in public construction procurement procedures?

Yes, according to the Green Public Procurement Regulation (Uredba o zelenem javnem naročanju), environmental considerations are mandatory in public procurement procedures for 22 public procurement items (e.g. design or execution of road construction, electricity, electronic office equipment, etc.). 

When awarding public contracts, the contracting authority must particularly consider the following environmental aspects: 

  • energy efficiency and the use of renewable or other alternative energy sources; 
  • efficient use of water and its reuse; 
  • efficient use of resources; 
  • prevention of risks to health or the environment, in particular air, water and soil pollution, and loss of biodiversity; 
  • reuse of secondary raw materials and products, and prevention and reduction of waste, including through longer lifetimes of goods and construction; 
  • promoting the use of reusable products instead of disposable ones, encouraging the repair, treatment and recovery of end-of-life products and waste for reuse and recycling. 

13. What are the investor's main obligations when it comes to ensuring compliance with the CSDD?

The Corporate Sustainability Due Diligence Directive (CSDDD) aims to promote sustainability in business operations and basically requires certain companies to conduct comprehensive due diligence of their supply chain to identify, address, and mitigate certain environmental and social risks. Since the CSDDD is currently still at the drafting stage, it does not trigger specific obligations for real estate investors in Slovenia. Implementation of CSDDD policies is left to the private sector’s discretion. The Slovenian legislator has not implemented national laws that would anticipate the subject matters of the CSDDD. 

14. What are the main implications  when it comes to ESG/non-financial reporting obligations?

Slovenia enforces ESG reporting under the EU Non-Financial Reporting Directive (NFRD) in its Companies Act (Zakon o gospodarskih družbah).  

The Companies Act requires Slovenian public-interest companies with more than 500 employees to include detailed statements in their annual reports on environmental, social, human resources, human rights, anti-corruption and anti-bribery issues necessary to understand the development, performance and position of the company and the impact of its activities.  

Real estate investors may require further ESG compliance reporting under the EU Taxonomy Regulation. Real estate funds must also address Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector for green property project ESG criteria disclosure. 

15. Are there any obligation to adapt the building to certain standards or to maintain existing appliances for people with special needs?

The Equalisation of Opportunities for Persons with Disabilities Act (Zakon o izenačevanju možnosti invalidov) seeks to prevent discrimination against people with disabilities and to enable equal opportunities for them in all aspects of life. It mandates the technical adaptation of all structures in public use with various technical devices, visual and sonic indicators, and other measures beneficial to those with physical, visual and hearing impairments. 

Further, the Building Act (Gradbeni zakon) prescribes that entrances must allow people with particular functional disabilities to use them independently, and must be equipped with the necessary signalling and equipment for unhindered movement, communication and orientation, and that the number of parking spaces for disabled persons near the main entrance must be sufficient. 

Additional obligations are set out by the Rules on universal construction and the use of construction works (Pravilnik o univerzalni graditvi in uporabi objektov) which, among others, govern the application of construction standards SIST ISO 21542 on accessibility and usability of the built environment, SIST 1186 on tactile walking surface indicators for blind and partially sighted persons, and SIST EN 60118-4 on electroacoustics. 

Portrait ofDunja Jandl
Dunja Jandl
Partner
Ljubljana
Graden Kjuder