EeMap Energy Efficient Mortgages Action Plan
The EeMAP Initiative aims to create a standardised “energy efficient mortgage”, according to which building owners are incentivised to improve the energy efficiency of their buildings or acquire an already energy efficient property by way of preferential financing conditions linked to the mortgage.
At the heart of this Energy Efficient Mortgage Initiative is the assumption that energy efficiency has a risk mitigation effect for banks as a result of its impact on a borrower’s ability to service their loan and on the value of the property. This means that energy efficient mortgages will represent a lower risk on the balance sheet of banks and could, therefore, qualify for a better capital treatment.
The EeMAP mortgage financing mechanism is intended to be supported by a data protocol and portal – delivered by the EeDaPP Initiative – to collect and access large-scale empirical evidence relating to energy efficient mortgage assets allowing a comprehensive analysis of de-risking energy efficient features.
The Energy Efficient Mortgages Initiative, under which umbrella the EeMAP and EeDaPP initiatives runs in parallel, is based on the realisation that: (i) banks, in financing the purchase of homes, can play a game-changing role in supporting the EU’s energy savings targets, by bringing energy efficiency into the conversation between banks and consumers by means of a standardised approach to the financing of energy efficient buildings/renovation, and (ii) it is essential to gather and access large-scale data relating to energy efficient mortgage assets (loan-by-loan) for the purpose of risk analysis by way of an accompanying data protocol and portal.
The Energy Efficient Mortgages Initiative is built on the premise that the mortgage and covered bond industries can help to bridge the renovation gap with a private financing initiative, which is independent from but complementary to public funds, tax incentives and utility rebates, and in this way support the EU in meeting its energy savings targets, whilst at the same time creating a strong link between the Capital Markets Union and energy efficiency agendas.
Significantly, the Energy Efficient Mortgages Initiative represents the first time a group of major banks and mortgage lenders, as well as data providers, companies and organisations from the building and energy industries and the valuation profession have proactively come together to discuss private financing of energy efficiency.