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SMARTER Finance for Families–Improving Citizens’ Health, Comfort and Financial Well-Being by Supporting Banks, Residential Investors and Solution Providers with Green Homes and Green Mortgage programs

Periodic Reporting for period 1 - SMARTER (SMARTER Finance for Families–Improving Citizens’ Health, Comfort and Financial Well-Being by Supporting Banks, Residential Investors and Solution Providers with Green Homes and Green Mortgage programs)

Berichtszeitraum: 2019-05-15 bis 2020-01-14

"The SMARTER Finance for Families (SMARTER) will create “on the ground” operational and self-sustaining Green Homes and Green Mortgage (GHGM) programs in 11 European countries. While “energy efficient mortgages” exist, SMARTER brings an innovative approach with a heavy focus on addressing all key stakeholder motivations and concerns with a focus on the end consumer or families that must ultimately choose to use the green finance product created. The full GHGM program has already been tested successfully in one market but the SMARTER project will bring valuable research support to remove real and perceived barriers to the systemic challenge inhibiting GHGM program’s development to date.

While the prime objective of SMARTER is to introduce “Innovative financing for energy efficiency investments”, the most important enabler of this is to create citizen-driven demand for green finance. By demonstrating the benefits of shifting spending attitudes toward a “total cost of monthly ownership” view of the cost of their home purchase or new construction or renovation project and, in doing so, unlocking a critical increase in construction budgets (often ranging from 15 to 25%) without increasing monthly costs to families. This allows not only buying “less bad” homes but rather buying homes that reach the highest levels of energy, comfort, health and performance while reducing the financial through lower total monthly costs – applying to all housing types from low-income housing to luxury housing and single-family homes to multi-unit residential projects. Citizen-driven demand will help convince Residential Investors/Developers to build to a high EE/Green standard who will be rewarded with positive market differentiation, availability of discounted finance to facilitate purchasing their homes, and ultimately greater sales and Return On Investment success.

SMARTER will demonstrate to banks that considering energy, health and repair costs savings as a (typically) smaller but equally predictable and valid source of “income” to augment borrower salaries will reduce their mortgage and renovation loan default risk on Energy Efficient / Green Homes (EE/Green Homes). Engaging National Banks and Banking Regulators to provide clear guidance to the Financial Sector about the acceptability of Energy Savings as additional ""income"" for borrowers will further improve new understanding among Mortgage Lenders about how their underwriting practices can benefit from incorporating green principles. Going further, SMARTER will demonstrate that, while a borrower’s stable and growing family income will always be the best assurance a loan will be repaid, ceteris paribus loaning money to the family whose home has a lower cost profile will be the bank’s best business choice."
SMARTER’s key achievements in the initial project period are summarized as follows:

● All Project Management procedures were established. This includes an online “Real Time Performance Management” system used by all project team participants that efficiently provides transparent access to all discussions, decisions and issues by project Task, Deliverable and Milestone. Documents and videos were created to provide orientation to new project team members.

● A public launch event was held in Brussels in May 2019 in addition to a kick off physical workshop and seven full team meetings via webinar to plan, discuss and implement project activities during the first project period. In addition, “Thematic” webinars on the topics of Certification, Green Homes Solution Providers (several), Minimum Recommended Energy Performance, SMARTER Communication Strategy and Activities, SMARTER Green Homes Education, and SMARTER Toolkits Preparation. All were recorded for future reference.

● An extensive research effort to augment the “Essential Tools” – including Toolkits for Residential Investors & Developers, Toolkits for Financial Institutions, and Toolkits for Green Homes Solution Providers – produced high quality, updated references, statistics and quotes for use within those tools.

● 102 dissemination activities of physical events/workshops/conference presentations/media articles were held or created and posted by SMARTER partners during this first project period across the 14 countries involved to date.

● Additional countries were engaged and have expressed interest to follow and consider adopting local Green Homes & Green Mortgage programs in the near future. These “Listening Partners” include (alphabetically) Armenia, Belgium , Croatia, Hungary, Indonesia, Morocco, Portugal, Rep. of Moldova and Serbia. More countries are being considered for the remaining months of the project.

● Useful research and tools were created to assist governments, NGOs and other stakeholders to mitigate Energy Poverty in Implementing Partner countries and beyond. The output focused on facilitating the creation of “hybrid” green finance products that combine public and private resources and significantly reduce the complexity in assuring residential projects achieve the desired financial and other benefits associated with green home performance.

● The design and implementation of a comprehensive, tailored Communication Plan and suggested content was completed to support the projects objectives namely by engaging and motivating all essential stakeholder groups.

● The “SMARTER Finance for Families Residential Green Finance online platform” was established to consolidate and share, in an internationally accessible manner the activities of the SMARTER consortium, the developments of each partner’s GHGM program, and details about the purpose, methodology and steps to get involved with the initiative.
"The project is very well aligned and on track to incorporate very positive European trends in green finance. The ""EU Taxonomy for Sustainable Activities"" has been published and sets minimum conditions for investments to be considered ""green"" and therefore eligible to be included in a ""Green Bond"" or similar investment vehicle. The Taxonomy required both ambitious energy performance from buildings as well as a ""Do No Significant Harm"" requirement where the energy performance should not be achieved to the detriment of other non-energy green criteria (e.g. natural resource protection, construction waste mitigation, water savings, etc.). The residential green certifications used by the project partners meet or exceed these conditions required by the Taxonomy and thus provide an excellent mechanism for retail banks to comply through green mortgage partnerships.

In addition, the project consortium has also made significant steps to align their residential green certifications with the EU's ""Level(s)"" framework for green building certifications developed and administered by the Directorate General - Environment. Important criteria such as the use of ""Life Cycle Assessment"" in choosing materials and building approaches assure that projects not only save energy in their operational use but minimize the use of fossil fuel derived energy during their construction or renovation process."
SMARTER Finance for Families - Delivering Green Homes through Green Mortgages