Green mortgages to boost the demand for energy-efficient homes | SMARTER Project | Results in brief | H2020 | CORDIS

Both homeowners and banks have been reluctant to invest much in energy-efficient buildings. But change is under way. The SMARTER project has been shifting mindsets with holistic green criteria and an ambitious framework for mortgages.

Energy

Greening homes is not so much a technical challenge as it is a financial one. Without getting financial institutions on board, energy-efficient buildings will never reach their full potential to support Europe’s climate goals.

“It’s time to borrow responsibly and build wisely,” says Steven Borncamp, project director at the Romania Green Building Council and coordinator of the SMARTER project. “Buying a green home is often thought to have financial benefits in the long term. But the truth is, it provides immediate benefits from the first month of ownership.”

SMARTER wants us to favour greener homes when making investment decisions. To reach this goal, the project shed light on benefits of sustainability measures and helped families understand how to sign up. It also helped investors and developers understand energy performance criteria and demonstrate this performance to homebuyers.

Green Building Councils in the project have developed holistic green certifications that can give banks a ready-made and reliable answer to the question ’Is the home we are financing green and climate resilient?’ “We’ve created a credible, ambitious yet achievable framework to define green mortgages consistent with the environmental performance our planet and citizens require,” Borncamp explains.

SMARTER assembled research on the relationship of financial risk to green versus non-green homes, and delivered a substantial number of projects which are following the holistic green criteria required by their certifications. “We have made a very compelling argument that banks should demand very ambitious energy performance and other environmental criteria to qualify their green financial projects,” Borncamp adds.

Two platforms, one purpose

The project built two main platforms: the Green Home Investment Platform and the Green Homes Solution Providers ecosystem.

In the first, stakeholders can follow developments in residential green finance. “The platform includes timely research on how ‘green’ affects financial risk and performance, key developments of interest to the banking and investment communities, and even information on ongoing residential projects,” Borncamp notes.

The second, Green Homes Solution Providers, is an ecosystem of companies providing services, materials, technologies and other products necessary to bring a green residential project to life. Not only is this great for homeowners, it also helps companies to increase the number of project opportunities ahead.

Since its launch in 2019, SMARTER has helped banks move from seeing green finance as an area to watch to an area needing an urgent response. Despite hesitancy and uncertainty linked to the pandemic, 74 projects worth a total of EUR 3.35 billion are either already certified or in the process of certification. According to Borncamp, this shows green homes are not a niche market as often claimed.

The project was initially focused on 12 European countries, but recently extended to Brazil, Colombia, Indonesia, Moldova and Morocco. Colombia and Moldova were the first to launch their green mortgage programmes using SMARTER tools, while the other countries followed at the end of 2021.

Keywords

SMARTER, energy efficiency, buildings, financing, climate, mortgages, finance, Romania

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