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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 2 - 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)

Periodo di rendicontazione: 2020-01-15 al 2021-11-14

The SMARTER Finance for Families (SMARTER) created “on the ground” operational and self-sustaining Green Homes and Green Mortgage (GHGM) programs in 11 European countries. While “energy efficient mortgages” exist, SMARTER brought 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 had already been tested successfully in one market. The SMARTER project brought 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 demonstrated 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 reduced 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 further improved new understanding among Mortgage Lenders about how their underwriting practices can benefit from incorporating green principles.
SMARTER’s key achievements during the project:

● A public launch event was held in Brussels in May 2019 in addition monthly team meetings via webinar to plan, discuss and implement project activities. Thematic webinars on the topics of Certification, Green Homes Solution Providers , Minimum Recommended Energy Performance, SMARTER Communication Strategy and Activities, SMARTER Green Homes Education, SMARTER Toolkits Preparation and Financial Valuation were held during the project..

● 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. All 11 new Implementing Partners successfully created, launched, promoted and are prepared to administer comprehensive Green Homes & Green Mortgage countries in their local markets in accordance with the state objectives of the SMARTER Finance for Families initiative.

● An expert “European Advisory Board” – Chaired by the Copenhagen Centre on Energy Efficiency - was identified, convened, informed about the SMARTER project activities and objectives, then provided extensive feedback and guidance, and endorsed the energy and other non-energy green criteria performance levels to be required by the initiative going forward.

● A comprehensive Communication Plan and and related tools were created. 384 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 at project inception.

● 12 new partnerships between banks and the SMARTER Implementing partners were signed. 69 Projects totaling 31.437 housing units have been certified or under agreement to be certified representing a total residential project value of 8.560.000.000 Euros.

● Additional countries were engaged and have committed to adopting local Green Homes & Green Mortgage programs. These “Listening Partners” include (alphabetically) Green Building Councils of Brasil, Colombia, Indonesia, Rep. of Moldova and Morocco. The Green Building Councils of Moldova and Colombia have already created toolkits and launched their programs with support from SMARTER with the others new partners with planned
launches in 2022. Online and In-Person workshops were held to introduce these programs. More countries are considering joining the SMARTER initiative.

● The “SMARTER Finance for Families Residential Green Finance Platform" and "Green Homes Investment Platform" were established online 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.

● Extensive tools and new online, specific platforms, conference participation and a SMARTER “Let’s Build Green” campaign gathered 106 signatories from 14 countries advanced the tools available for mitigating energy poverty
using innovative green finance. 40 municipal and NGO representatives attended training organized by SMARTER partners. MOUs with municipalities were signed to develop new affordable housing projects utilizing energy efficient/green principles created by the SMARTER project partners.
The project incorporated 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