Greener housing thanks to the banking sector

The banking sector can play a role in the transition to more energy efficient building and renovation. How? By encouraging green loans that are good for the planet but also have benefits for you as a consumer.

To better identify these loans, a label resulting from the "Energy Efficient Mortgages" initiative, a project that brings together several European banks and in which Belgium has played a leading role, was launched in mid-February 2021.

To tell us more about it, we interviewed Elisabeth Minjauw. She is actively involved in this initiative as Febelfin's representative to the European Mortgage Federation, where she is chairperson until the end of 2022. Furthermore, Minjauw is also responsible for the implementation of sustainability themes within the credit department of BNP Paribas Fortis and is the contact person at Group level for issues concerning energy efficient lending.

The European Mortgage Federation launched this initiative with various stakeholders, including the European Commission, to define what a green mortgage loan is: i.e. a loan that is energy efficient. It also aims to get us thinking about how to raise awareness of this energy-efficient credit. The banking sector can take concrete action in this area and encourage the transition to energy-efficient renovations or construction.

When someone starts the process of buying a property, banks come to the forefront. Their role here is primarily to raise awareness. Low-energy houses are responsible for 20% of CO2 emissions in Belgium. Banks can therefore make their customers aware of the fact that these properties have a major impact on the environment and advise them accordingly.

Moreover, banks can also point out to their customers that a property with a higher EPC score is more valuable than a similar property with a lower EPC score. After all, a study by the KULeuven shows that houses with good energy performance are sold for 10.6% more. More and more we see the importance of energy efficiency in determining the value of a property.

A quality label was indeed launched on 12 February 2021. Its main objective is to identify energy efficient mortgage loans in the portfolios of credit institutions. The purpose of these loans is to finance the purchase, construction or renovation of real estate, albeit subject to conditions. For example, new buildings must have energy performance in line with current European standards. As for renovations, energy efficiency must be improved by at least 30%.

Consumers will be able to check, in full transparency, why a mortgage is a green loan and they will be able to be sure that it meets certain defined criteria. Banks that decide to become certified commit themselves to achieving the objectives set out in the label.

In general, consumers who opt for energy-efficient mortgages will be able to enjoy benefits that will vary from bank to bank. These may include preferential interest rates, a more favourable equity weighting, etc. Finally, these customers will contribute to the reduction of CO2 emissions in Belgium and thus make a positive contribution to the climate.

The cooperation with the European institutions will ensure that the label becomes a real market reference and is used by as many credit institutions as possible. The label will be able to serve as a benchmark for a whole series of parameters related to green loans. In short, it can be a quality guarantee showing that the banks are committed to a successful energy transition.