NEWS: Pioneering banks prepare to pilot energy efficiency mortgages across Europe
Ground-breaking new proposals for a European ‘energy efficiency mortgage’ scheme were launched today by the EU-funded ‘EeMAP’ initiative, which pioneering banks and buildings experts in piloting are preparing to pilot across Europe.
A public consultation on the proposals is now open for comments until 12 March, following the release of a major EU report on sustainable finance for financial regulators that recommended support for energy efficient mortgages.
WorldGBC’s Europe Regional Network is one of the key partners behind the EeMAP initiative, which aims to help meet the €100bn shortfall in annual investment for energy efficiency in buildings that is required to meet the EU’s climate targets. In response to calls from the banking sector, the proposals in the consultation set out a standardised European approach to energy efficient mortgages, to help lenders establish and grow these products. Energy efficiency mortgages aim to offer consumers better lending rates or additional finance when they invest in highly energy efficient homes or energy saving renovations.
A series of market briefings setting out the building energy performance landscape in a number of key European markets have been published by Green Building Councils alongside the proposals, to aid banks and other actors looking to launch national pilots under the new scheme. The UK market briefing is available here.
James Drinkwater, Director of WorldGBC’s Europe Regional Network, said: “To hit Europe’s climate and energy goals, it is critical we leverage the power of mortgage lenders to scale-up private finance for energy efficient building renovation. The proposals and market briefings represent a crucial step in greening Europe’s €7 trillion mortgage market. We call on Europe’s green building community to work with us to ensure the proposals can achieve this goal.”
Alongside the public consultation, European Green Building Councils are hosting a series of events aimed at establishing national expert ‘hubs’ for the energy efficient mortgage pilot, and to examine and strengthen the proposals published today. A half day conference will be hosted in the UK on Tuesday 20 March – click here for the details.
The final proposals for the mortgage pilot scheme will be released on 14 June 2018 at a major conference in Windsor, UK. The event will gather over 100 high level finance and green building experts, and will mark the official start of the energy efficient mortgages pilot scheme. A group of pioneer lenders, including major banks, medium size players and local, specialised lenders in Europe have already signalled their interest in being involved in the pilot.
- The EeMAP Initiative – led by the European Mortgage Federation-European Covered Bond Council, Ca’ Foscari University of Venice,RICS, the Europe Regional Network of the World Green Building Council, ON and SAFE Goethe University Frankfurt – aims to create an energy efficient mortgage through which homebuyers are incentivised to improve the energy efficiency of their building or acquire an already energy efficient property by way of favourable conditions liked to the mortgage. The cornerstone of the initiative is the assumption that energy efficiency has a risk mitigation effect for banks as a result of the impact on a borrower’s ability to service his/her loan and on the value of the property, a correlation which the EeMAP Initiative will seek to substantiate.
- The Energy efficient Data Portal & Protocol Initiative (EeDaPP) will support the EeMAP pilot scheme by designing a market-led protocol, which will facilitate the large-scale gathering and processing of data relating to energy efficient mortgage assets (loan-by-loan), via a standardised reporting template. In the long term, the data will be accessed by way of a common, centralised portal, allowing for continuous tracking of the performance of the energy efficient mortgage assets, thereby also facilitating the tagging of such assets for the purposes of energy efficient bond issuance. The EeDaPP Initiative is led by the European Mortgage Federation-European Covered Bond Council, European DataWarehouse, CRIF, Hypoport, TXS, Ca’ Foscari University of Venice and SAFE Goethe University Frankfurt.
For more information about the EeMAP & EeDaPP Initiatives, please visit the EeMAP website: www.energyefficientmortgages.eu
The design of the draft energy efficient mortgage proposals build on leading research by the EeMAP initiative published in late 2017, including the following reports:
- White Paper: Creating a Green Mortgage for Europe
- Review of the State of Play of Green Finance
- Review of the State of Play on Building Performance Indicators that Impact Mortgage Credit Risk
- Review of the State of Play on Mortgage Lending Valuation and the Impact of Energy Efficiency Value
- Review of the Impact of Energy Efficiency on the Probability of Default
This project has received funding from the European Union’s Horizon 2020 research and innovation programme under grant agreement No 746205. The sole responsibility for the content of this material lies with the authors. It does not necessarily represent the views of the European Union, and neither EASME nor the European Commission are responsible for any use of this material.