The World Green Building Council (WorldGBC) Europe Network and major European banks have today launched a new energy efficiency mortgages pilot scheme. The launch event in Windsor marks a major signal from investors that green building is a key growth market across Europe.

The pilot scheme, developed by Green Building Councils in WorldGBC’s Europe network under the EU funded Energy Efficient Mortgages Initiative, is aimed at trialling new European criteria for energy efficiency mortgages. Some of Europe’s largest banks are participating in the pilot, including BNP Paribas, ING Bank, Nordea Bank and Société Générale. UKGBC is one of ten participating Green Building Councils who are supporting WorldGBC on the project and a summary of our work on the Energy Efficiency Mortgage Action Plan can be found here. Green Building Councils across Europe led a market consultation with over 500 experts to develop the pilot and ensure that the pilot is applicable at the local level.

Lower utility costs and their ability to hold their value better over time mean green homes are increasingly recognised as lower risk investments for both borrowers and lenders. Additionally, there is rapidly growing investor demand for green mortgage backed-bonds, helping make the business case for lenders to provide more attractive mortgages to those opting for greener homes.

The pilot scheme will see participating banks explore lower interest rates for mortgages meeting the scheme’s criteria, as well as other forms of preferential finance. The participation of nearly 40 major banks in the scheme is proof that big investors are increasingly recognising energy efficient homes as better investments. The participating banks will be investigating how the scheme’s criteria can be applied across their mortgage businesses over the coming years. The initiative hopes to establish a new generation of energy efficiency mortgages that help consumers drive energy use reductions across the property sector.

Terri Wills, CEO of WorldGBC said:

The commitment by Europe’s leading banks to this pilot shows green building is hitting the mainstream. WorldGBC’s Europe network has developed energy performance criteria for new builds and renovations to help set a consistent market standard for banks issuing green mortgage products. We look forward to developing the standards over time to support the investor community in addressing climate risks.

Michael Lewis, CEO E.ON UK said:

Green mortgages have the potential to unlock an energy efficiency revolution by enabling home-owners to access affordable finance through which to improve their homes. We are proud to be involved as a leading partner in the Energy Efficient Mortgages Initiative and believe that the pilot phase launched today offers a great opportunity for banks, utilities and energy efficiency experts to work together to turn a great vision into reality.