Energy Efficient Mortgages initiative seeks market views to shape forthcoming pilot scheme with banks

Brussels, 12 February 2018 – For immediate release

Today, the Energy Efficient Mortgages Action Plan (EeMAP) Consortium has launched a major market consultation on guidelines for a pan-European ‘energy efficient mortgage’ pilot scheme. EeMAP is aimed at delivering a standardised European framework and data collection process for energy efficient mortgages, with favourable financing conditions for energy efficient buildings and energy saving renovations.

EeMAP not only offers a concrete response to the call for immediate market action on climate, particularly in relation to finance, at December 2017’s ‘One Planet Summit’ in Paris, but will also provide a solid evidence base to support the European Commission’s analysis of the risk profile of energy efficient mortgages, as recently highlighted in the Final Report of the High-Level Expert Group on Sustainable Finance.

In the context of the ongoing work of the EU to create a Capital Markets Union, EeMAP will create a solid, new asset class, which can be used for the purpose of energy efficient bond or covered bond funding. The innovation of the initiative is the delivery of a win-win process, with a mechanism to incentivise property owners to improve the energy performance of their buildings and a focus specifically on those aspects of the energy performance of buildings that correlate with key risks metrics used by banks, such as probability of default and loss given default.

Today’s consultation aims at collecting market views on three sets of high-level EeMAP guidelines which set out a European blueprint for the forthcoming pilot scheme at national level:

  1. Implementation Guidelines for Lending Institutions
  2. Building Performance Assessment Criteria
  3. Valuation and Energy Efficiency Checklist

The consultation will run until 12 March 2018. The input collected during the public consultation will help to shape the final energy efficient mortgage framework, as will feedback collected during a series of national expert events across the EU to examine and strengthen the proposed guidelines. The final guidelines will be formally presented on 14 June 2018 at an Energy Efficient Mortgages event in Windsor, UK, which will also mark the official start of the pilot scheme.

The objective of the pilot scheme is to test the energy efficient mortgage product blueprint at national level with key stakeholders such as banks, property valuers, Green Building Councils and energy utilities. Crucially the pilot will also involve collecting and analysing loan data over time to substantiate the correlation between energy efficiency and reduced levels of risk. A large 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.

Luca Bertalot, EeMAP Coordinator & EMF-ECBC Secretary General, said: “This is an ambitious and exciting initiative with a long-term horizon and a scope of action with the potential to reach 500 million citizens living in different climatic, social and market conditions. We recognise the complexity of the process but at the same time understand the urgent need to provide immediate market solutions to accelerate energy efficiency investment. We are determined to design a market infrastructure which will be adaptable over time, will respond to market and climate conditions and will deliver financial support for citizens to futureproof their houses. At the heart of our project is also a desire which speaks to each and everyone one of us: a desire to ensure the house we raise our families in is a home and the best one it can be.”

Notes to Editors

For more information about the EeMAP Initiative, please visit the EeMAP website:

The public consultation is accompanied by a series of national roundtables and by the launch of national market briefing publications by national Green Building Councils across Europe, aimed at helping lenders and actors in the building sector understand the technical building assessment landscape in these countries.

The design of the draft energy efficient mortgage guidelines build on leading research by the EeMAP initiative published in late 2017, including:


Pilot Scheme Guidelines:

Energy Efficient Mortgages Going Global

Brussels, 8 February 2018 – For immediate release

Today, the Energy Efficient Mortgages Initiative is being presented at a Roundtable on Sustainable Finance & Energy Efficiency in Singapore in collaboration with the National University of Singapore’s School of Design and Environment. Attended by Singaporean, European and Asian representatives from a wide range of sectors, the Roundtable is a strong sign of the growing global interest in energy efficiency financing.

Today’s roundtable is a standout event in a series of global meetings of the covered bond community in Singapore with issuers and investors from all over the globe in attendance to promote the Capital Markets Union to Asian investors. It therefore provides a perfect opportunity to bring together relevant stakeholders to discuss the state of play of energy efficiency and its financing across the two continents and exchange information and best practice on the ways in which financial actors can play a leading role in this market. In this context, the Energy Efficient Mortgage Initiative will be showcased as an example of how the mortgage sector can take the lead in scaling-up private investment in building energy performance.

Singapore is also a perfect location for the fourth in a series of Energy Efficient Mortgage Initiative Roundtables, since Singapore has declared 2018 as a Year of Climate Action following the United Nations Climate Change Conference (COP23) and has pledged to reduce its carbon emission, with energy efficiency being one of the key components identified to reach the targets.

Luca Bertalot, EeMAP Coordinator & EMF-ECBC Secretary General, said: “The interest expressed by the Singapore community in organising and participating in this Roundtable is a testament to the fact that the Energy Efficient Mortgages Initiative is going global. We’re excited about the opportunity to present the Initiative to a global audience and describe European efforts to support the transition to a low-carbon, more resource-efficient and sustainable economy by way of the Capital Markets Union and a specific focus on sustainable finance.”

Notes to Editors

The final Energy Efficient Mortgage framework will be formally presented on 14 June 2018 at an Energy Efficient Mortgages Stakeholder Event in Windsor, UK. This event will also mark the official start of the EeMAP Pilot Phase.

The Energy Efficient Mortgages Initiative consists of two EU funded projects:

  1. 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.
  2. The Energy efficient Data Portal & Protocol Initiative (EeDaPP) will support the EeMAP Pilot Phase 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:

EeMAP press release – Dutch banks meet for first EeMAP roundtable in the Netherlands


Brussels, 19 January 2018 – For immediate release

Dutch banks meet for first EeMAP roundtable in the Netherlands

Today, the Energy Efficient Mortgages Initiative, which brings together two Horizon 2020 funded Projects, the Energy Efficient Mortgages Action Plan (EeMAP) and the Energy Efficient Data Protocol & Portal (EeDaPP), takes another important step forward with the third in a series of national Roundtable events, this time focussing on the Netherlands.

The event, organised in Amsterdam and hosted by ING, brings together representatives from the Dutch banking industry for an exchange of views on the practical implementation in the Dutch market of the Initiative, which seeks to scale-up mortgage financing for energy efficient buildings at European level and collect and analyse related data.

The outcomes of today’s discussions will feed into the EeMAP Pilot Phase, which will test the framework for energy efficient mortgages produced by the EeMAP project’s technical committees. The Pilot Phase is expected to begin in June 2018 with a view to delivering a final framework for an energy efficient mortgage product in the final stage of the EeMAP Initiative in 2019.

The first EeMAP national case study, with a focus on Italy, was launched on 13 November 2017 in Milan; the second, with a focus on Belgium, took place on 15 November 2017. A series of other national Roundtable events are in the pipeline for later this year.

Luca Bertalot, EeMAP Coordinator, commented:

“We are delighted to have the opportunity to discuss our Energy Efficient Mortgages Initiative with the Dutch banking community. Exchanges of this kind with local stakeholders are invaluable for identifying and incorporating national best practices into the framework at European level and, ultimately, for the long-term success of the Initiative.”

For more information on the Energy Efficient Mortgages Initiative, visit the project’s website at and follow the project on Twitter.

Why Retail Banks should get involved in the EeMAP Initiative?

By Miguel Garcia de Eulate, Head of Capital Markets, Caja Rural de Navarra

One can be forgiven for embracing a pessimistic view on the future of retail banking: low margins, huge adaptation costs to digitalisation, and new regulatory burdens are constantly – and rightly – mentioned as the biggest challenges for the industry.

However, what if retail banks could reinvent themselves as, well, retail banks, committed precisely to the very needs of their client base? What if new sources of revenue do exist, and the role of banks is to effectively channel savings to finance long-term financing needs, helping to overcome social and intergenerational gaps?

What if – on top of that- , the above-mentioned aims could be pursued within the global agenda developed by the international community to protect the environment?

Caja Rural de Navarra is a regional retail bank belonging to the European cooperative banking family. Cooperative banks know what it takes to be sustainable, because they serve their local communities, and are expected to reinvest profits for the future generations of clients and members instead of maximising short-term shareholder value.

We issued our first Sustainable Covered Bond in 2016, and we have followed this year with a Sustainable Senior Unsecured transaction. Our Sustainability Framework (which has a Second Opinion by Sustainalytics) has nine different social and environmental lines, one of them being “Energy Efficiency”. However, we were disappointed by the fact that we had not enough data to include buildings’ energy efficiency (that is, for residential and commercial purposes) within the framework at the time when it was developed.

This is why we have joined the EMF-ECBC’s EeMAP initiative.

The EeMAP initiative has in my view all the ingredients to successfully incentivise both borrowers and lenders to embark on the improvement of buildings’ energy efficiency in Europe:

  • Since its creation, it has involved finance, valuation and technical institution and experts.
  • It has adopted a professional approach by acknowledging the need to find positive evidence to prove the lower risk nature of energy efficiency financing, involving academics from top Universities and getting the support of the European institutions.
  • It has the enthusiasm and long-term view for such a complex project to be pushed forward.

Green finance is a multifaceted subject: We – banks – can originate those assets on the first place by lending to our clients, but we can also issue bonds with a “use of proceeds” commitment (Green or Sustainable bonds) and benefit from the lower risk of these loans and also from the diversification of investors’ base that green issuing brings; Borrowers can improve their building’s value and reduce their energy bill; The EU can greatly improve the CO2 reduction targets; and new jobs and growth can be created from the huge investments that the renovation of an outdated housing stock in Europe would release.

Nevertheless, the Energy efficient Mortgages Action Plan (EeMAP) initiative faces huge challenges. Mortgage lending is a very relationship-intensive, cumbersome and highly bureaucratic process, with a very granular base and still within nationally regulated legal frameworks.

This is why, in my view, retail banks should get involved in EeMAP. They (we) have the capabilities to reach a dispersed population, with a regional focus that takes into account local differences in housing and energy needs. They can participate in the financing of buildings’ improvements as well as in the construction sector’s necessary involvement in these efficiency upgrades.

Caja Rural de Navarra, as part of the Spanish Caja Rural Group and UNACC, belongs to the European Association of Cooperative Banks (EACB). The EACB is engaged in the dialogue with the European institutions and has participated in the consultation by the High Level Expert Group on Sustainable Finance (HLEG), highlighting the role played by co-operative banks in stimulating investment and creating jobs by lending to the real economy and financing activities aimed at climate protection and renewable energy.

The European energy efficiency mortgage (EEM) can be a game-changer for the European economy and for its citizens. It can also mobilise finance to enable an economic development which is at the same time compatible with the preservation of the environment through a meaningful reduction of CO2 emissions in line with the objectives included in the EU’s 2020 climate and energy package and the Paris Agreement.

The European banking sector, and particularly the retail networks that form the backbone of the financial services in our continent, are an essential ingredient of any economic strategy oriented towards a more sustainable economic model that takes a broader and more inclusive perspective of the different stakeholders – present and future – involved.
We believe that the EeMAP initiative is a clear example of a win-win project which needs to be fostered. As once a character of Cervantes (El rufian dichoso, 1615) said: “Good acts never lack rewards”. 400 years later, his sentence still holds true.

EeMAP: High Visibility in the Press and at International Events

We are delighted to share that the EeMAP project is starting to attract attention in both national and international press thanks to efforts of the EeMAP consortium partners and their respective members and contacts to promote and disseminate the Project and its first major findings in relation to the financing of energy efficiency and all of the relevant components of that.

On 15 November 2017, the Financial Times cited the project in an article on the growing green bond market, noting that EeMAP “could further boost green bond issuance by banks, by providing them with a larger pool of green assets to fund.” Following the launch of the EeMAP technical reports at the Irish Green Building Council’s 26 October 2017 Conference on Housing, a 5 November 2017 Irish Times article on why quality housing matters noted that the EeMAP project “could be the carrot that convinces both home buyers and sellers” of the merits of greener buildings. Additionally, the lead article Brüssels macht Druck, published in the Immobilien & Finanzierung (number 21 – 2017), considers EeMAP as a first preliminary positive step forward for a deep renovation of the building stock.  On 30 November EeMAP was mentioned in Il Sole 24 Ore – Casa as a market-led initiative focused on the design and delivery of “green mortgages” and on the  improvement of the energy efficiency of buildings. Finally, a video interview featuring Luca Bertalot, EeMAP Coordinator, highlighting  the main challenges of the initiative, was published on, an Italian website addressed to banks and financial organisations. A video filmed for Belgian tv station, KanaalZ, to mark the first EeMAP National Roundtable in Belgium on 15 November and featuring Luca Bertalot will be televised shortly and will also be available in due course on the EeMAP website.

Astana, July 24, 2017: Clean energy solutions for the buildings of the future

EeMAP is not only attracting attention from journalists, but the EeMAP consortium has also been invited to present the initiative at several high-profile events on climate issues, such as the EU Energy Day at Expo 2017 in Astana on 24 July and COP23 in Bonn on 9 November.

A video filmed for Belgian tv station, KanaalZ, to mark the first EeMAP National Roundtable in Belgium on 15 November and featuring Luca Bertalot will be televised shortly and is also available here 

The forthcoming international events where EeMAP will be promoted and disseminated are One Planet Summit and its side events in Paris on 11 and 12 December. The Summit is being organised by the Office of the Presidency of the French Republic and aims to mobilise the international community, private players, the financial sector, local governments, the research community and civil society to step up the fight against climate change, focusing on two main priorities: reducing greenhouse gas emissions and protecting people from the effects of climate change.  This is a unique opportunity to further disseminate the EeMAP initiative: Follow us and stay tuned!

EeMAP White Paper: How to Spark a Market in Green Mortgages

By James Drinkwater, Regional Director, Europe Network – World Green Building Council

If you look deep into the dynamics of the property sector, there are two groups of actors that have a greater influence than any others: building occupants and institutional investors. The behaviour of these two groups will, to a large degree, determine whether or not we meet our sustainability goals in the building sector, which accounts for over a third of Europe’s emissions.

In Europe, there is no more central instrument to both consumers and institutional investors than the mortgage.  Mortgages account for around a third of the total assets of the European banking sector – equivalent to half of the EU’s GDP (EUR 7 trillion at the end 2016). The potential of this capital to drive deep energy efficiency improvements to Europe’s building stock and lower its emissions is enormous, but it remains almost entirely untapped.

Apart from a few niche ‘green mortgage’ products offered by a tiny number of banks to reward consumers for purchasing or renovating greener homes, building performance and mortgage loan conditions are not being linked. However, in late October 2017 the Energy efficiency Mortgages Action Plan (EeMAP) initiative published a ground-breaking new ‘White Paper’ aimed at changing all that.

Through its partners, the EeMAP project brings together the separate worlds of institutional investors, consumer experts, property valuers and green building experts, to establish a European ‘energy efficiency mortgage’ product. The White Paper, published on 26 October, sets out a series of key recommendations for the development of energy efficiency mortgages across Europe, to create a market that helps fill a significant part of Europe’s energy efficiency financing gap. Crucially, given the cross-border nature of banking and capital markets, EeMAP is looking to establish a pan-European approach to green mortgages.

At the centre of the EeMAP project is the belief that a building’s energy efficiency has a risk mitigation effect for banks as a result of its impact on running costs and a borrower’s ability to service their loan, and on the value of the property. If this can be proven, energy efficient mortgages could offer homebuyers across the EU better interest rates or additional capital in return for purchasing more energy efficient homes or committing to energy saving renovation work. This is precisely what a 2018 EeMAP pilot phase aims to prove.

“EeMAP has the potential to change consumer behaviour and encourage energy efficiency investment in buildings via mortgage finance. In this way, the mortgage market could be a driver of the improvement of the quality of the EU’s building stock, opening new market opportunities, stimulating best practices and making banks’ portfolios more resilient; that is why we support the development of the EeMAP initiative.”

Luciano Chiarelli, Head of Group Secured Funding at UniCredit,

Based on feedback from market-leading banks across Europe, the EeMAP White Paper sets out the following key recommendations:

1. A simple and standardised framework for an energy efficient mortgage would help to pave the way for the market entry. Similarly, a clear definition of an energy efficient mortgage would help banks to make a differentiation between energy efficient and conventional mortgages in their risk management processes. In this way they can build datasets, to further demonstrate the risk reduction impacts of energy efficiency.
2. Banks need clear guidance on how and what to instruct property valuers in relation to the energy performance of buildings. This would help to ensure that energy efficiency is appropriately taken account of in property valuations.
3. Simple and proportionate energy efficiency measurement indicators would help banks to integrate energy efficiency into credit risk assessments.

The White Paper builds on four EeMAP reports, which represent the most up-to-date body of knowledge on the research and principles that should inform the growth of Europe’s green mortgage market. These examine current market practices within the areas of green finance, building performance indicators, property valuation and the impact of energy efficiency on risk, and are a must read for those who are interested in how we unlock private sector finance for energy efficiency. This research is now informing the design of key principles to underpin EeMAP’s pilot phase, due to launch in June 2018.

The White Paper has already been presented at a number of key climate events, including Buildings Day at the recent COP23 climate change negotiations, where focus on green finance is intensifying.  Significantly, there is growing enthusiasm from major investors and energy utilities to support the EeMAP initiative.

On the launch of the White Paper, Agnès Gourc, Director of Sustainable Capital Markets at BNP Paribas said:

“Financing of energy efficiency projects opens tremendous social and economic opportunities for households, lenders and investors. In order to satisfy investor appetite for green bonds, we need to develop the right mechanism to deliver energy efficient assets. We need to focus on a simpe, robust and cost-efficient framework embedding energy efficiency into the mortgage origination and funding processes.”

Marco Marijewycz, representing EeMAP partner E.ON, Europe’s largest green utility, said:

“Improving our customers’ lives by helping them to reduce their energy costs through smarter and more efficient energy solutions is at the heart of E.ON’s business. Affordable finance is key to unlocking the potential of these solutions at scale and we believe energy efficient mortgages could offer customers a simple, understandable solution.”

Importantly, the White Paper also issues a call to action to key players whose input and support is vital to drive forward energy efficient mortgages both at EU and at national level across the region. Ahead of a market consultation in February and March of next year, it calls on all interested organisations to participate in forming the proposals for energy efficient mortgages which will underpin the EeMAP pilot phase. Contact if your organisation wishes to join forces with EeMAP and spark a market in green mortgages.

Banks to help tackle climate related risks and safeguard financial stability

The days when energy efficient finance was only a vision upheld by few are numbered. Once seen as a niche activity, green and energy efficiency finance is now shaping the international agenda, and green/energy efficiency financial products are scaling-up across industries and capital markets.

The political drive for green finance has pushed forward the development of a green financial market with banks increasingly allocating billions of euros to green and energy efficiency investments. Even though the political will for energy efficiency finance has never been bigger than it is today, the present lack of standardised large-scale energy efficient asset datasets hampers the development of a true energy efficient financial market by hindering transparency, viability and comprehensive risk analysis, elements which would otherwise act as a driver for further implementation and mobilisation of private bank finance for energy efficient investments.

Though the move to a more low-carbon economy has unquestionably begun, the transformation cannot be delivered by politicians alone. Looking at capital markets, banks are uniquely placed to play a central role by facilitating energy efficiency considerations in the process of purchase/re-mortgage of homes and buildings. Indeed, with buildings representing 40% of the total energy consumption in the EU alone, energy efficient mortgage financing is a top European political priority.

In response, the EMF-ECBC, together with Hypoport, European DataWarehouse, Ca’ Foscari University, CRIF and TXS, has launched a market-led initiative to address the current lack of standardisation in terms of datasets by delivering a framework for standardisation of technical and financial data gathering, with the aim of stimulating energy efficient financing.

The project, which is known as the Energy efficient Data Protocol and Portal (EeDaPP) Initiative, aims to design and deliver a market-led protocol, which will enable the large-scale recording of data relating to energy efficient mortgage assets (loan-by-loan), via a standardised reporting template. 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.

In parallel with the political agenda, financial markets and regulators are beginning to recognise that environmental degradation can pose a risk to the financial system with climate changes impacting the value and pricing of carbon intensive assets. Banks can help address climate related risks going forward and safeguard financial stability, with standardised energy effect data being incorporated into risk models, deployed for the purposes of mortgage affordability calculations, used for investor due diligence and accessed by rating agencies and other relevant market participants. The gathering of standardised data records will help to reduce uncertainty about the financial performance of energy efficient assets and their viability, which, in turn, will mobilise private capital into energy efficient investments, strongly supporting the EU political agenda. In doing so, the Initiative also has the potential to be a trigger for financial stability by shedding light on the most effective way of managing climate related risks.

The technical and financial datasets gathered under the EeDaPP Initiative will allow for the linking between energy efficient features of a building, its value and the loan performance, thereby creating a better understanding of the impact of energy efficiency on borrowers’ probability of default (PD) and on loss-given default (LGD). The aim is to identify and demonstrate that energy efficient mortgage assets can be identified for preferential capital treatment based on large-scale standardised data and correlation analysis.

In this way, EeDaPP will build on and complement the Energy efficiency Mortgages Action Plan (EeMAP) Initiative, launched by the EMF-ECBC and its Consortium Partners earlier this year with the aim of creating a standardised mortgage product according to which building owners are incentivised to improve the energy efficiency of their buildings by way of preferential financing conditions linked to the mortgage. Standardised data collection and reporting will also be at the heart of the forthcoming EeMAP Pilot Phase, during which banks will originate energy efficient mortgage products and in which all financial institutions under the EMF-ECBC umbrella are invited to play an active role.

Earlier this year, the EeDaPP Initiative received support from the European Commission in the form of Horizon 2020 funding. In the context of the Horizon 2020 programme, the EeDaPP Consortium will undertake five “operational” Work Packages, each with a clear set of deliverables: (1) identification and summary of market best practices within data systems; (2) definition of energy efficiency reporting criteria; (3) design and delivery of standardised data protocol and common centralised portal; (4) data and substantiation correlation analysis; and (5) roadmap for system integration.

The EeDaPP Initiative will be officially launched at an opening event in H1 2018. More information will follow in due course.

EeDaPP- Energy efficiency Data Protocol and Portal –  is an initiative by the European Mortgage Federation – European Covered Bond Council (EMF-ECBC), European DataWarehouse, CRIF, Hypoport, TXS GmbH, University Ca’ Foscari Venezia and Johann Wolfgang Goethe-Universitat Frankfurt am Main.

What valuers tell banks about energy efficiency: a snapshot of current practices

By Zsolt Toth, External Affairs & EU Liaison Manager, Europe RICS

Lenders rely on valuations as part of the risk assessment process of offering loans. When deciding whether to make a mortgage offer, lenders take into account, along with other factors, both the customer’s ability to make the payments and the advice provided by the valuer on the quality and market value of the property being offered as security against the mortgage loan. The role of the valuer is to supply advice and an estimate of the market value (MV) based on market evidence applied to an appropriate valuation methodology. Current prevailing practice for secured lending is that the valuer will not be instructed specifically about the energy rating of the property, however this is beginning to change as lenders are now asking for more information in relation to energy efficiency.

A survey currently being carried out among valuers and credit risk departments of significant European banks intends to gather market insights about the extent property features are typically considered to have an impact on securing the loan. The first, high level findings are presented below with the aim to stimulate further discussions among lenders and valuation professionals.

A diverse picture

The feedback received reflect the variety and cultural diversity of real estate and mortgage markets in Europe. The basis of any valuation, including the leeway of the valuer to include an assessment of energy efficiency and sustainability impacts, depends on both, the purpose for which it is being prepared as well as the regulatory framework within which the valuation is being carried out. For example, if a valuation based on market value according to Red Book standards is being prepared, the valuer would be expected to consider and comment on sustainability-related building features. However, this would not be the case if it were a valuation based on market value according to the German valuation order; here the valuer would only be expected to consider and comment on energy efficiency issues. Whereas a valuation based on mortgage lending value according to specific national valuation regimes might not even require the valuer to comment on any of those sustainability features.

Critical to the energy efficiency mortgages initiative is to understand what the underlying internal processes are within the financing institutions, who instructs the valuer and at what point of the mortgage origination process, as well as what is the weight placed on the valuer’s report. It should also be noted that in most European countries there are legislative and regulatory constraints on residential lending including different rules regarding both the basis and method of valuation to be applied.

Energy efficiency and value

One of the positive trends noted was that current valuation instructions already include requests to comment on energy efficiency. More than half of the major European banks participating in the survey instruct their valuers to consider the potential impact of the energy efficiency rating of the property (usually EPCs) with notable exceptions which go even further to include actual energy performance and wider environmental impacts. Energy efficiency features can also be picked up by valuers when doing physical inspections as 9 out of 10 banks require valuers to comment on the building fabric and the overall condition of the property. It is important to emphasise however, that a mortgage valuation is to inform the lender, not the borrower. The reality is that many borrower rely on a mortgage valuation when in fact they would be better served by purchasing their own report on a property to include environmental issues.

This is an encouraging finding which enables the EeMAP consortium to continue working closely with banks on developing valuation checklists and instructions to reflect energy efficiency in the valuation process in a more thorough and standardised way. It remains to be further explored how energy efficiency is accounted for in the risk assessment further down the underwriting stream. The replies suggest that it is a mix of traditional factors and value drivers that determines the creditworthiness of a property however, age and condition of the building envelope and technical equipment will count to a large degree.

Data availability

Rapid technological advances in most sectors, such as Internet of Things, Blockchain and Big Data, are responsible for an ever-growing avalanche of data and yet, despite this trend, a lack of data and information in the built environment real estate sector may be increasingly perceived as a tangible risk factor by those underwriting lending decisions. The survey looked at what building related data is being collected and stored in-house by banks, who provides this information and whether it is shared and used during the mortgage underwriting process. Core indicators which are routinely collected, considered and used in analysis and estimates include location, age, construction costs, transaction prices and tax values. Interestingly, energy performance and renewables have only been mentioned sparingly. Other environmental performance indicators such as carbon emissions, water, waste and adaptability to climate change feature even lower on the radar of both valuers and lenders, especially qualitative indicators such as user comfort and health.

Availability of data poses a significant challenge for valuation professionals as regardless of whether market evidence exists or not, it remains the responsibility of the valuer to take into account all those quality attributes which might have an impact on value. In the context of insufficient empirical evidence, the weighting of these attributes (especially in the case of qualitative indicators) remains with the professional judgement of the valuer. In this sense, improving the availability and consistency of data is an area which needs to be urgently addressed in order to reinforce the positive link between building performance and reduced risk.

Looking forward

EeMAP is quickly approaching a pilot phase to be launched early next year. In order to equip banks and their valuers with the necessary tools and skills to better recognise the impact of energy efficiency, a workshop was held on the 24th of November in Brussels to validate findings on existing valuation and risk assessment practices.

The ability of valuers to advise on the impact of energy efficiency is a key piece for lenders to calculate mortgage affordability without increasing the credit risk and thus allowing additional funds to be provided to the consumer. A better understanding of the relationship between energy efficiency and value is also important for a more robust and risk sensitive property rating in the loan portfolio of banks.

Individual Building Renovation Roadmaps (iBRoad): Developing customised tools for deep renovation and comfortable energy efficient homes

By Mariangiola Fabbri, Senior Project Manager, Buildings Performance Institute Europe (BPIE)

In Europe, buildings are responsible for around 40% of energy consumption. Without a long-term plan to renovate and decarbonise the European building stock, the road to achieve the EU’s climate and energy objectives and the Paris Climate Agreement commitments will be long and winding.

While building performance is constantly improving, only 3% of the EU’s building stock has been built to a standard that can be considered efficient. This means that 97% of the building stock needs upgrading[1] .

Renovating a building can be complex and time consuming. For building owners, together with the difficulty of accessing dedicated financing for renovation, the lack of knowledge about what to do and how to implement renovation measures are the main obstacles to improving the energy performance of their building. That is why, to succeed in such an endeavour, building owners need support.

The iBRoad project is helping to lift these barriers by developing an Individual Building Renovation Roadmap for single-family houses and small multi-family houses. This tool looks at the building as a whole and provides a customised renovation plan over a long-term horizon (15-20 years). At its core, the renovation roadmap is a home-improvement plan, which considers the occupant’s needs and specific situations (e.g. age, financial situation, composition and expected evolution of the household, etc.) and avoids the risk of ‘locking-in’ future renovation solutions due to a lack of foresight.

An individual Building Renovation Roadmap is an evolution of the Energy Performance Certificate (EPC), as it supports building owners with personalised suggestions on their renovation options. An on-site energy audit, fulfilling specific criteria and established with the owner, results in a ready-to-use, personalised renovation plan for the building owner, presenting all the measures to implement and the order to implement them, together with an explanation of the benefits to be expected after the renovation is completed, including energy savings and comfort improvements.

The plan will be combined with a repository of information (known as a building logbook) on aspects like the energy consumption, energy production, executed maintenance and building plans.

With its innovative approach, iBRoad aims to empower home owners and support them in taking informed decisions concerning renovation, based on their individual needs. By doing this, iBRoad will encourage cost-effective building renovation measures and boost deep renovation to achieve greater energy efficiency.

The project builds upon existing examples in Germany, France and Flanders (Belgium), to identify successful features and tools that can be adapted to different national conditions (such as climate zones and regulatory frameworks).

The concept and tools developed by iBRoad will be tested in Bulgaria, Poland, Portugal and Germany (Germany will only test the logbook). A training programme for auditors will also be provided. The feasibility and replicability of the iBRoad model in other building typologies and EU Member States will be assessed through auditor- and user experience feedback.

iBRoad and the Energy efficient Mortgage Action Plan (EeMAP) Initiative are  complementary in scope and expertise. By providing a user-friendly tool to guide building owners through a step-by-step deep renovation (iBRoad) and the financial means to implement it (EeMAP), together they can help to lift two of the main barriers to renovation (complexity and access to finance). The products resulting from these two projects can incentivise home owners to improve the energy performance of their building and to finance it through a dedicated energy efficiency mortgage available on the European market.

By maintaining an open and continuous dialogue between both iBRoad and EeMAP, and providing input to the development of the projects (including, stakeholder engagement, market research and customer surveys), the projects’ key features can be developed in tandem, ensuring that all relevant issues are considered and potential ‘lock-ins’ are avoided.

The iBRoad project is funded by the European Commission under the Horizon 2020 framework programme for research and innovation, under grant agreement N. 754045. The project started in 2017 and will run until June 2020. The project has 12 partners from 9 countries.

Twitter: @iBRoad _project


[1] Only 3% of the EU building stock has an Energy Performance Certificate with an “A” label, which although definitions differ between countries, is broadly considered as a “very efficient” building.

Energy Efficient Mortgage Initiative Gains Strong National Support from Belgium

Brussels, 15 November 2017 – For immediate release

Second EeMAP National Roundtable event takes place in Brussels

Today, the Energy Efficient Mortgages Action Plan (EeMAP) Initiative takes another concrete step forward with the second in a series of national Roundtable events, this time focussing on Belgium. The event, organised in Brussels in cooperation with the Flemish Construction Confederation (VCB), brings together experts from the Belgian and European banking, construction, valuation and engineering sectors with a strong interest in building energy efficiency and its financing.

Significantly, today’s Roundtable event will also be attended by representatives of the Cabinets of the Belgian Regional Energy Ministers, underlining the political support that EeMAP is garnering also at national level.

The event’s aim is to discuss how energy measurement calculations and asset performance documentation developed and deployed in Belgium can be scaled up to support the development of an Energy Efficient Mortgage product for Europe, which will be put to the test in a forthcoming EeMAP Pilot Phase.

The first EeMAP national case study, with a focus on Italy, was launched 13 November 2017 in Milan. Other national Roundtable events are in the pipeline for later this year and early in 2018.

Luca Bertalot, EeMAP Coordinator, commented:

“We are excited to see so much interdisciplinary support from Belgium for this national EeMAP case study. We are particularly encouraged by the strong political interest from Belgium in the Initiative. Exchanges of this kind between local and European stakeholders are invaluable for identifying and incorporating national best practices into the EeMAP framework at European level and, ultimately, for the long-term success of the Initiative.”

Ivo Van Bulck (Secretary General UPC/BVK; Director Commercial Banking Febelfin), commented:

“The Belgian credit sector is playing a leading role in this European social initiative. This kind of close cooperation between the construction industry, the credit sector and the political world is absolutely crucial if Belgium and Europe still want to pursue the environmental objectives set for 2050. The Belgian credit sector is also prepared to assume its responsibility for the timely achievement of those goals.”

Marc Dillen, Managing Director, Flemish Construction Federation, commented:

“The goal set forward by the Flemish government to make all homes energy efficient by 2050 is very ambitious. In order to achieve this goal, we need initiatives on the national level as well as on the EU level, such as EeMAP. A major challenge is to find long-term financing for home renovations, therefore we have developed our ReCalculator tool to provide an accurate estimation of the real energy savings after renovation.”

Johan Van Der Biest, General Manager, Wienerberger, commented:

“Renovation of the existing housing stock is key to reach the CO2 reduction targets. The payback lies in the combination of energy cost reductions and the increase of the total value (physically and aesthetically) of the property. The focus must be on financing the reduction of energy consumption and upgrading the fundamental quality of the building, since they define the value, and not the production of green energy in a property.” 

Presentation materials are available here . The agenda of the meeting is available here.