The urgency to address carbon emissions and embrace eco-conscious practices underscores the significance of the housing industry. Continental Europe suffers from vast amounts of CO2 emissions which stem from housing, amplifying the need for transformative measures that enhance energy efficiency and curtail greenhouse gases.
The financial sector has emerged as a pivotal player in this transition, offering vital support to achieve Europe’s 2030 Green Deal objectives. A report from tech startup Oper Credits highlights the significant strategies implemented by European governments and borrowers’ evolving roles in this landscape.
European governments have taken proactive steps, employing incentives and enforcing regulations to drive energy efficiency in housing. Simultaneously, borrowers are becoming more involved, motivated by economic impacts, financial incentives, and a growing environmental consciousness.
However, this transformation presents challenges for both lenders and borrowers. For lenders, the task involves navigating complexities while incorporating sustainability into their operations. Borrowers, on the other hand, face increased anxiety due to added complexities in mortgage applications and navigating available grants and subsidies.
The report identifies five key responsibilities for sustainable lenders to actively support this energy transition. From guiding borrowers and identifying optimal financing mixes to building sustainable portfolios, each responsibility contributes to fostering a mutually beneficial relationship between borrowers and financial institutions.
Yet, this transformation isn’t without risks. Focusing solely on energy-performant lending might restrict financing access, while ambiguities in EPC values could lead to misaligned financings, potentially hindering the overall goal.
To address these challenges, lenders must navigate several stages, including activation, advisory, fulfillment, and aftercare, employing various tactics and technological solutions to ensure efficiency and accuracy in the lending process.
As financial institutions decide their approach towards sustainable finance, they can opt for a basic compliance-driven strategy, an opportunistic approach integrating sustainability with strategic advancements, or a transformative approach embedding sustainability as a core identity.
This transformation isn’t confined to lenders alone. Real estate players and mortgage brokers play a crucial role in contributing positively to the overall ecosystem by integrating sustainability into their advisory processes and leveraging their expertise in navigating housing-related challenges.
When prompted for comment on the report, Geert Van Kerckhoven, CEO & co-founder of Oper Credits said, “The journey toward meeting Europe’s Green Deal targets demands a collective effort, with the financial sector at its core. Our report highlights the pivotal role of lenders in this evolution, from upgrading advisory processes to embracing sustainability as a core USP. By offering green mortgages and fostering sustainable home ecosystems, we not only meet regulatory expectations but actively contribute to a more sustainable and environmentally conscious society.”
Read the full report here
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