Periodic Reporting for period 2 - LEVEL EEI (Level the playing field for Energy Efficiency Investment products)
Période du rapport: 2022-03-01 au 2023-08-31
The European union increased its GHG emissions reduction target to at least 55% compared to 1990 levels by 2030. To reach this goal, investments in renewable Energy Efficiency Investment (EEI) and Sustainable Energy Investments (SEI) are needed. LEVEL-EEI aimed at addressing the market failures to close the EEI/SEI funding gap by:
1) Revealing end-users’ demand. LEVEL EEI established scientific evidence regarding the environmental investment objectives of end-users in Europe, and notably assess the demand for EEI/SEI financial products (Objective 1).
2) Boosting the offer of EEI/SEI products and by leveraging the demand for ‘environmental products’ (Objective 2).
3) Establishing a legal framework and standards for assessing the environmental contributions of financial products/institutions and substantiating environmental marketing claims (Objective 3).
4) Making evidence on what works and what doesn’t available to the industry and supervisors, fostering the emergence of best practices and establishing the basis for continuous improvement of the market (Objective 4).
1) Revealing end-users’ demand. LEVEL EEI established scientific evidence regarding the environmental investment objectives of end-users in Europe, and notably assess the demand for EEI/SEI financial products (Objective 1).
2) Boosting the offer of EEI/SEI products and by leveraging the demand for ‘environmental products’ (Objective 2).
3) Establishing a legal framework and standards for assessing the environmental contributions of financial products/institutions and substantiating environmental marketing claims (Objective 3).
4) Making evidence on what works and what doesn’t available to the industry and supervisors, fostering the emergence of best practices and establishing the basis for continuous improvement of the market (Objective 4).
Outputs related to Objective 1:
- A series of six market reports which summarise quantitative and qualitative research (quantitative surveys, bilateral interviews, focus groups, mystery shopping visits) on the current situation regarding demand, supply and distribution of sustainable retail investment products in six European countries.
- A series of six-country reports (in the form of slide decks) addressing the retail demand and market potential for environmental financial products in six EU countries.
- A paper which assesses the sustainability preferences of pension fund beneficiaries and their willingness to pay for it
- A paper which investigates the willingness to pay (WTP) additional fees for sustainable funds and how this may differ across countries (five EU countries) and different sustainability strategies
- A paper in which social preferences are deducted from an administrative database in which researchers can follow the reinvesting pattern of clients.
- A paper based on a lab experiment (among business school students) on belief elicitation.
- A survey Report on Discrete Choice Experiment.
- A survey Report on Beliefs Elicitation Experiment.
- A paper assessing the sustainability preferences of pension fund beneficiaries.
- A survey Report “Eliciting Risk Preferences of Pensioenfonds Detailhandel’s Participants. How linked to sustainability?
Outputs related to Objective 2.
- A state of the art report on the impact potential of most common green financial products on EEI/SEI in the real economy.
- A new science-based framework to assess the impact potential of financial products.
- A Product Category Climate Impact Factsheet.
- A practitioner guide for asset managers & asset owners to assess clients’ and beneficiaries’ sustainability preferences including a series of scientific experiment designs and questionnaires.
- A best-practice Guidance and Questionnaire for assessing client sustainability preferences and motivations.
Outputs related to Objective 3:
- A legal analysis of the regulatory framework on greenwashing.
- A legal analysis of the regulatory framework on suitability assessments.
- A guide on environmental impact claims for EU financial products.
- Integration of an impact criterion for the European Ecolabel for financial products.
- Recommendations for a Sustainable EU Retail Investment Policy.
- Recommendations for the Consumer Credit Directive (CCD).
- Recommendations for the Energy Performance of Building Directive (EPBD) Proposal Recast.
- Answer to the Public Consultation on the review of the Mortgage Credit Directive (MCD).
Outputs related to Objective 4.
- Environmental impact product databases.
- Green fund product database.
- A series of six market reports which summarise quantitative and qualitative research (quantitative surveys, bilateral interviews, focus groups, mystery shopping visits) on the current situation regarding demand, supply and distribution of sustainable retail investment products in six European countries.
- A series of six-country reports (in the form of slide decks) addressing the retail demand and market potential for environmental financial products in six EU countries.
- A paper which assesses the sustainability preferences of pension fund beneficiaries and their willingness to pay for it
- A paper which investigates the willingness to pay (WTP) additional fees for sustainable funds and how this may differ across countries (five EU countries) and different sustainability strategies
- A paper in which social preferences are deducted from an administrative database in which researchers can follow the reinvesting pattern of clients.
- A paper based on a lab experiment (among business school students) on belief elicitation.
- A survey Report on Discrete Choice Experiment.
- A survey Report on Beliefs Elicitation Experiment.
- A paper assessing the sustainability preferences of pension fund beneficiaries.
- A survey Report “Eliciting Risk Preferences of Pensioenfonds Detailhandel’s Participants. How linked to sustainability?
Outputs related to Objective 2.
- A state of the art report on the impact potential of most common green financial products on EEI/SEI in the real economy.
- A new science-based framework to assess the impact potential of financial products.
- A Product Category Climate Impact Factsheet.
- A practitioner guide for asset managers & asset owners to assess clients’ and beneficiaries’ sustainability preferences including a series of scientific experiment designs and questionnaires.
- A best-practice Guidance and Questionnaire for assessing client sustainability preferences and motivations.
Outputs related to Objective 3:
- A legal analysis of the regulatory framework on greenwashing.
- A legal analysis of the regulatory framework on suitability assessments.
- A guide on environmental impact claims for EU financial products.
- Integration of an impact criterion for the European Ecolabel for financial products.
- Recommendations for a Sustainable EU Retail Investment Policy.
- Recommendations for the Consumer Credit Directive (CCD).
- Recommendations for the Energy Performance of Building Directive (EPBD) Proposal Recast.
- Answer to the Public Consultation on the review of the Mortgage Credit Directive (MCD).
Outputs related to Objective 4.
- Environmental impact product databases.
- Green fund product database.
Objective 1. Based on the methodological experiences from the experiments on retail preferences with large pension funds in the Netherlands and UK, LEVEL EEI developed scientifically tested surveys to reduce stated preference biases to a maximum. Over 15k data points on environmental investment objectives of end-users in 14 European members states were collected. This database represents one of the largest existing open-source databases on environmental preferences of retail investors worldwide and increased the level of acceptance by the industry and policymakers to address the overwhelming demand for impactful EEI/SEI products. This evidence have already triggered the necessary changes in the product offering, product distribution and regulatory framework necessary to exponentially increase the level of investments in EEI/SEI products by European retail investors.
Objective 2. LEVEL EEI has created a database with around 900 financial products (including public funds, equity funds, deposits and crowdfunding) with a focus on EEI/SEI. LEVEL EEI has identified ten mainstream environmental products and analyzed their real-world impact potential. LEVEL has proved that current mainstream environmental investment products and their marketing materials do not meet European end users’ demand and impact expectations. LEVEL EEI has revealed a significant market demand for environmental products with strong positive impact potential on EEI and SEI in the real economy and evidence-based marketing materials. LEVEL EEI has shown a multi-trillion Euro market gap between current supply and demand for environmental products with high impact potential on EEI and SEI which will drive institutional investors to exponentially increase the supply for these instruments on primary and secondary markets.
Objective 3. Through advocacy work, LEVEL EEI has contributed to the development and amendment of legal files to increase the deployment and distribution of EEI/SEI products which satisfy the end users demand and expectations. By developing impact management guidelines and principles of responsible environmental marketing together with industry stakeholders, this project has ensured that market standards and regulatory adaptation becomes increasingly harmonized. Harmonization between regulation and market practices on environmental impact management and communication will eventually ensure that the growing number of EE/SE-related instruments will actually contribute to additional investments in EE and SE in the real economy and minimize the risk of misleading marketing and greenwashing.
Objective 4. myfairmoney.eu a unique European online product database including environmental secondary market fund products and primary market products available for retail investors across Europe, was launched and promoted across Europe. The non-commercial and independent product database was made available for financial advisors across Europe to find products which are suitable for the sustainability preferences of their clients. Standards for an Impact Potential Assessment Framework (IPAF) as well as best practice guidelines to assess client sustainability preferences and motivations and to formulate non-misleading environmental impact claims were integrated in the platform. They will definitively trigger the growth of EE/SE-related instruments, products and strategies and maximize additional investments in EE and SE.
Objective 2. LEVEL EEI has created a database with around 900 financial products (including public funds, equity funds, deposits and crowdfunding) with a focus on EEI/SEI. LEVEL EEI has identified ten mainstream environmental products and analyzed their real-world impact potential. LEVEL has proved that current mainstream environmental investment products and their marketing materials do not meet European end users’ demand and impact expectations. LEVEL EEI has revealed a significant market demand for environmental products with strong positive impact potential on EEI and SEI in the real economy and evidence-based marketing materials. LEVEL EEI has shown a multi-trillion Euro market gap between current supply and demand for environmental products with high impact potential on EEI and SEI which will drive institutional investors to exponentially increase the supply for these instruments on primary and secondary markets.
Objective 3. Through advocacy work, LEVEL EEI has contributed to the development and amendment of legal files to increase the deployment and distribution of EEI/SEI products which satisfy the end users demand and expectations. By developing impact management guidelines and principles of responsible environmental marketing together with industry stakeholders, this project has ensured that market standards and regulatory adaptation becomes increasingly harmonized. Harmonization between regulation and market practices on environmental impact management and communication will eventually ensure that the growing number of EE/SE-related instruments will actually contribute to additional investments in EE and SE in the real economy and minimize the risk of misleading marketing and greenwashing.
Objective 4. myfairmoney.eu a unique European online product database including environmental secondary market fund products and primary market products available for retail investors across Europe, was launched and promoted across Europe. The non-commercial and independent product database was made available for financial advisors across Europe to find products which are suitable for the sustainability preferences of their clients. Standards for an Impact Potential Assessment Framework (IPAF) as well as best practice guidelines to assess client sustainability preferences and motivations and to formulate non-misleading environmental impact claims were integrated in the platform. They will definitively trigger the growth of EE/SE-related instruments, products and strategies and maximize additional investments in EE and SE.