Long deadline: To a create a private bank financing mechanism to encourage the energy efficiency improvement of households which is a key means of helping deliver on the COP21 Paris Agreement.
Progress: The European Energy Efficiency Mortgage initiative was launched on 21 September in Madrid by a consortium also including the Europe Network of the Green Building Councils, energy suppliers (E.ON) and academia.
RICS has partnered with the European Mortgage Federation (EMF) representing over 2000 banks in Europe to develop preferential mortgages based on the reduced probability of default and the increase in value of energy efficient retrofits. The initiative is significant for banks, investors and valuers, and could lead to loans which represent a lower risk on the balance sheet and could therefore qualify for a better capital treatment. It could also ensure that banks are able to recognise ‘green’ assets in their risk profiling, which would begin to help the market to price-in the added value of energy efficient real estate. RICS is contributing to this initiative through the development of training, an inspection checklist and instructions for banks on how to value these properties.