Integrating the Circular Economy into ESG in the Real Estate Sector: Current Practices, Challenges, and Pathways to Standardization

Abstract Climate change and resource depletion are issues accelerating the development of a circular economy (CE). The question arises of whether and how real estate companies, through their activities, support the development of the circular economy. To answer this, both qualitative and quantitative methods were used. Firstly, a review of the literature on the development of the circular economy was conducted. Secondly, the ESG reports and strategies of real estate and construction companies listed on the stock exchange were analyzed in detail, focusing on the development of circular construction, circular policies, goals, and principles against the background of the ESRS E5. The study identifies four key disclosure areas: organization, stakeholders, construction investments and surroundings, and the construction process. The reported circular economy practices are limited and vary in alignment with circular economy principles, the ReSOLVE model, and the 10R principles. The growing emphasis on ESG is driving the real estate sector to adopt circular economy solutions. Public authorities must support this change by creating favorable legal, economic, technological, and social conditions, which will lead to improvements in the quantity and diversity of the applied circular solutions, as well as the quality and transparency of reporting.