Investors and research for green mortgages

For more sustainable houses, we need ‘Green Mortgages’, that reward the energy efficiency of buildings. To enable a process of ‘efficiency’ on a larger scale, studying a financial mechanism that benefits the economy and the environment, the "Energy efficient Mortgages Action Plan” (EeMAP) is founded, a project funded by the Horizon 2020 program from the European Commission.

Organized through the European Mortgage Federation, an association for the most active institutes in mortgages, the project involves the skills of scholars from the Department of Economics at Ca’ Foscari University of Venice and from the SAFE Centre of Research of the Goethe University of Frankfurt, as well as three partners from the United Kingdom: the Royal Institution of Chartered Surveyors (RICS), the UK Green Building Council (UK-GBC) and energy company E.ON.

Today in Brussels, the first stage of the project began; a meeting between all the institutions involved in the study of ‘green mortgages’, in which Jyrki Katainen, the European Commission vice-president for Jobs, Growth, Investment and Competitiveness, participated.

The project will explore strategies for mobilizing mortgage funding in a way that incentivizes energy efficiency of European buildings. The objective is to create an opportune context for useful and efficient products to finance families interested in investing in the energy efficiency of their own homes.

The importance of this challenge is confirmed in the data: In Europe, buildings are responsible for 40% of energy consumption and 36% of carbon dioxide emissions. A greater energy efficiency in buildings would result in saving 5-6% of energy consumption and a 5% reduction in emissions. Furthermore, an increase in these restorations would generate new job opportunities. Finally, the more efficient buildings are seen as an advantage for banks and investors deciding to aim for ‘green’ credit.

“The support from market participants and the European Commission, and the feedback from our survey on banks’ ‘green’ lending practices reveal a strong interest in further developing the green market and underlines the importance of standardisation for energy efficient mortgages”, says Luca Bertalot, General Secretary for the European Mortgage Federation - European Covered Bond Council’s (EMF-ECBC).

“We should make the expertise for the research in financial fields available, providing the necessary data for developing a European initiative intent on making a large impact” commented Monica Bilio, professor of Econometrics at the Ca’ Foscari University of Venice, a partner to this project; “By issuing 35 thousand green mortgages every year, creating an annual saving of 88GWh (Gigawatt hours), Europe will be able to record not only a relevant energy saving but also to ultimately step up to the challenge put in place by global climate change”.

Bilio will coordinate Ca’ Foscari’s research group that will work principally on the econometric analyses used to understand the mechanisms of the market and the way that financial tools function, as well as the risk management linked to the mortgages.