Green homes a “multi-trillion euros opportunity” – but greenwashing must end

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(above) Pictured at the Smarter Finance for EU banking sector launch in Brussels are (l-r); João Pedro dos Santos Amaral Tomaz, Banking Association Portugal; Rostislav Rozsypal, the European Commission asset management unit; Hanane El Hayek, head of sustainable finance at Certivea/ GBC France and chair of the Smarter Finance for EU advisory board; Stephen O’Shea, head of sustainable construction and reporting, Cairn Homes; Alexios Fragkiadakis, department climate advisor, EIB; Anna-Maria Spyriouni, European policy head, Climate Bonds Initiative; Eduardo Hernandez O´Reilly, sustainable finance lead, UCI; Hans Rhein, LIFE programme head of unit, European Climate, Infrastructure and Environment Executive Agency (CINEA); Michele Sansoni, project advisor, CINEA; Steven Borncamp, founder, Romanian Green Building Council.

According to Alexandra Hedesiu, managing partner at EnerSave Capital and spokesperson on the pan-European project Smarter Finance for EU: “The need to rapidly transition to a decarbonised, green European housing stock represents a multi-trillion euro opportunity – and it’s one that the finance community must embrace.”

With a range of drivers emerging to force the hand of finance to quantify and substantially improve the environmental and social performance of investments, Hedesiu warned against finance professionals seeking to do the bare minimum to meet the requirements for individual drivers in isolation.

“Investors who take a narrow interpretation of their obligations regarding any one green driver are heading for trouble,” said Hedesiu. “The EU taxonomy is one thing. But what about the Sustainable Financial Disclosure Regulations (SFDR), the Corporate Sustainability Reporting Directive (CSRD), or the recast Energy Performance of Buildings Directive? Property investments that barely meet the requirements of these drivers risk becoming stranded assets. The only prudent approach is to stop thinking about doing the bare minimum, and instead invest in property with credible green building certification.”

A European Union-funded consortium of green building councils, energy agencies, NGOs and sectoral experts, Smarter Finance for EU is aiming to kickstart the en masse greening and decarbonisation of Europe’s housing stock by unlocking €100bn worth of EU taxonomy-aligned green homes – over €10bn of which has already been secured.

Green homes finance professional course launched

The consortium has developed a green homes-accredited finance professional training programme to upskill finance professionals on greening their portfolios, led by Hedesiu. “This comprehensive training initiative offers a robust curriculum,” said Hedesiu. “It encompasses key areas such as green homes certifications and EU taxonomy alignment, real estate loan portfolio assessment, reporting and governances, risk management, regulatory compliance and marketing strategies for residential green finance.”

Hedesiu said the training will play a key role in equipping finance professionals with specialized knowledge and skills in green financing, focusing on sustainable housing projects and green investment strategies.

Hedesiu announced the new training programme at the Smarter Finance for EU banking sector launch event, “Banking on green homes: exploring the world of sustainable finance”.

Held in Brussels in May, the event focused on supporting the banking sector and the journey to “greenify” portfolios, and was attended by an audience of property financiers and investors. The EU LIFE co-funded project, Smarter Finance for EU, is dedicated to driving the change Europe needs in the development of finance and credible green certification for homes.

Smarter has unlocked finance and green home certification for over 31,000 new homes across Europe, by taking a systemic, multidisciplinary approach to solving a systemic problem. The needs and motivations of all of the essential stakeholder groups that are critical to moving the green finance topic forward to promote greener homes for Europe’s are considered.

Co-ordinated by the Romania Green Building Council, the partners in Smarter Finance for EU include the Irish Green Building Council, Luxembourg- based sustainable finance facilitator EnerSave Capital, Passive House Plus publishers Temple Media Ltd, the association Energy Efficient Cities of Ukraine, Green Building Council España, Portuguese energy agency Adene, Habitat for Humanity International, and the European-Ukrainian Energy Agency. With energy poverty on the rise across Europe in the aftermath of Russia’s invasion of Ukraine, the consortium also includes a focus on developing hybrid green finance products to help lift vulnerable people out of energy poverty and provide healthy, comfortable homes with low exposure to energy price spikes.

A number of banking partners already offer finance products tied to green home certifications by partners in Smarter Finance for EU, and the EU Horizon 2020-funded programme which preceded it, Smarter Finance for Families. Tailored development finance discounts of 0.1 to 0.5 per cent are available in Ireland for housing schemes certified to the Irish Green Building Council’s Home Performance Index (HPI) certification by pillar bank AIB and Home Building Finance Ireland. A range of banks offer preferential green mortgages tied to Romania Green Building Council’s Green Homes certification, including Alpha Bank Romania, Banca Transilvania, BCR Erste Group, BRD Groupe Societe Generale, Garanti BBVA, Raiffeisen Bank Romania, Romanian Commercial Bank, Vista Bank and Libra Internet Bank, who also offer preferential development finance terms. Meanwhile, Smarter Finance for Families partner Polish Green Building Council has secured green mortgages on its Zielony Dom certified homes from BNP Paribas and BOS Bank.

For information on green home certification, finance for green homes visit www.smarter4.eu

For information on the courses offered by Smarter4EU partners including for green homes finance accredited professionals and a range of other courses, visit www.smarterfinance4.EU/education.