Energy efficient Mortgage Market Implementation Plan

Project Information

EeMMiP

Grant agreement ID: 894117

DOI

10.3030/894117

Project closed

EC signature date 5 May 2020

Start date 1 September 2020

End date 28 February 2023

Funded under

• SOCIETAL CHALLENGES - Secure, clean and efficient energy

Total cost

€ 1 767 177,50

EU contribution

€ 1 500 000,00

Coordinated by

COVERED BOND & MORTGAGE COUNCIL
Belgium

Periodic Reporting for period 2 - EeMMiP (Energy efficient Mortgage Market Implementation Plan)

Reporting period: 2021-09-01 to 2023-02-28

Summary of the context and overall objectives of the project

The Energy Efficient Mortgage Market Implementation Plan (EeMMIP) builds on efforts to develop EEM by delivering an integrated market and a blueprint for established and emerging markets around the globe. The Project conducts an analysis of the current market systems relevant to the development of an EEM market and establish demonstrators to support the demonstration of the end-to-end customer journey and EEM life-cycle. It fosters the establishment market-based governance and an EEM Label establishment to support recognition of and confidence in EEM and facilitate access to quality information for market participants. It delivers guidance for the inclusion of energy efficiency in credit risk assessments for lending institutions and supervisors and policy recommendations for the prudential framework in line with the principle of risk sensitivity and promote a well-functioning banking market. Finally, it supports global take-up of EEM through the Label and institutional cooperation. EeMMIP responds to the objectives of the EU in the areas of sustainable finance and climate change, all against the background of Capital Markets Union, and aims to influence the entire value chain, from consumer to bond investor, stimulating mentality change and securing energy efficiency in market attitudes and best practices both in Europe and globally.

Work performed from the beginning of the project to the end of the period covered by the report and main results achieved so far

All the work performed in the first year of the project was described in the first reporting preriod and could be found as well in the final technical report for year 2.

The second year of the project, which ran from September 2021 to February 2023 further to a six-month extension, focussed on the finalisation of WP4, WP5, WP6 and WP7:

1. Development and market positioning of the EEM Label
- Deliverables: D4.2-D4.6;
- Positioning the Label in the context of the EU Taxonomy & analysing impact on EEM Label Convention;
- Maintaining the governance structure of the EEM Label and introducing a fee structure;
- Positioning the EEM Label on the market: banks with 38 products representing 13 countries have joined the Label; discussion with other banks is ongoing;
- EEM data disclosure through the HDT & HRT templates;
- Development of the Product Future Grid with the aim of to delivering a seamless end-to-end customer journey and EEM life-cycle in a consumer friendly form.

2.Building the EEMI Ecosystem platform
- Optimising the end-to-end customer journey and experience, deploying market interventions and partnerships that support delivery of the EEM;
- Setting up and developing 3 pillars of the EEM Ecosystem: Simulator, EEM financing & Marketplace;
- Scaling up the work of the EEM national market hubs to support the deployment of local ‘ecosystems’

3.Analysis of the optimal EE value chain
- Identification of the key pillars of the EE market value chain: analysis and key learnings from Scotland and The Province of Trento;
- Analysis of the available IT solutions available for EE market participants.
- Creation of a ‘roadmap’ to energy efficient mortgage market development.

4.Scaling-up the work of the EEM national hubs
- Actively supporting and organising meetings for the national hubs within EEM Label
- Chat room meetings facilitating the discussion between national hubs (see point 1.3.)
- Meetings of the Taxonomy Task Force (see point 1.3.)

5. Identification and mapping of EEM public actions
- Deliverables: D7.1-D7.4;
- Analysis of national EE legislation based on the extracted dataset of EE policies related to residential and commercial buildings;
- Gap analysis of the EE support actions policies on the example of selected European Countries;
- Identification and description of best practices in national support schemes across Member States;
- Case study analysis of global best practice in green finance: EU, Kenya, Malaysia and Japan.

6.Communication and dissemination
- Deliverables: D8.2 D8.3 & D8.4
- Series of EEMI Events: EEMI Bauhaus Week in Trento & EEMI International Sustainable Housing Finance Symposium
- Building EEM community through dialogue and with experts from the market, academia, and government as well as institutional investors, leads of product units of energy companies and lending institutions
- Numerous press releases and newsletters, articles and social media activities on LinkedIn and Twitter;

Progress beyond the state of the art and expected potential impact (including the socio-economic impact and the wider societal implications of the project so far)

The broader Energy Efficient Mortgages Initiative, of which the EeMMIP Project is a part, has been developing a pan-European effort to coordinate market interventions in relation to the financing of energy efficiency in buildings, create synergies in the mortgage and mortgage funding value chain, and in this way deliver a virtuous circle between lenders, borrowers and investors from the origination of the mortgage to the pooling of energy efficient collateral that would be the underlying collateral for “green” funding. These efforts have resulted in wide-ranging engagement and consultation with banks, real estate advisory services providers, built environment professionals and consumers/borrowers.

In terms of concrete outputs, the EEM Label is a cornerstone of the Project and was created with the aim of catalysing the EEM market through:

1. Supporting market transparency on the flows of finance to energy efficient assets and products;
2. Providing valuable information on the portfolios of energy efficient loans that could be packaged as asset backed securities into green (covered) bonds;
3. Facilitating the evaluation of the financial performance of EEM relative to their inefficient alternatives;
4. Developing the profile of building energy efficiency and provide a platform to improve market awareness, also on the part of consumers.

Since its launch in February 2021, around 40 lending institutions with approximately the same number of products have joined the EEM Label from 14 jurisdictions. During this period, the EEM Label Committee, the governing body of the EEM Label, assertively pursued both the onboarding of new labels as well as the completion of the Harmonised Disclosure Template (HDT), the reporting template of the EEM underlying asset information. With the introduction of a fee structure at the beginning of 2023 the EEM Label witnessed an adjustment of the membership to the EEM Label which currently counts 32 lending institutions with 33 labelled products of which 32 are mortgage products and one is an ESG Retrofitting Loan product.At the time of writing (April 2023), 23 of the 32 mortgage-based EEM labelled products have reported at least one HDT on the EEM Label Website, which is linked to the HDT uploaded on the lending institutions’ website.

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