Press release

EMF-ECBC Welcomes European Commission’s Renovation Wave Communication

14 October 2020

EMF-ECBC Welcomes European Commission’s Renovation Wave Communication


Brussels, 14 October 2020 – For immediate release


The European Mortgage Federation – European Covered Bond Council (EMF-ECBC) welcomes the publication today of the European Commission’s Communication on A Renovation Wave for Europe – greening our buildings, creating jobs, improving lives. We particularly welcome the explicit recognition of the EMF-ECBC-led “Energy Efficient Mortgages Initiative (EEMI)” as a way of designing a new, green market ecosystem where banks and financial institutions can play a crucial role in the Renovation Wave by financing the improvement of the EU’s building stock. Indeed, the Renovation Wave – in parallel with the Capital Markets Union and NextGenerationEU projects – and supported by market-led initiatives and tools such as the EEMI, ESG Covered Bonds and European Secured Notes, has the potential to achieve a significant market transformation.


Mortgage finance has significant potential to support the energy efficient renovation of the EU’s building stock, given the inherent link between mortgages and buildings. The combined effect of sustainability and digitalisation applied to outstanding mortgages in Europe, which account for 44% of EU GDP, could represent a key driver for market innovation and trigger an unprecedented magnitude of financial flows from the private finance sector. In turn, this can give a significant structural boost to building energy efficiency investments, reinforce the labour market, with 18 jobs created for every €1m invested in green building retrofits (BPIE 2020), stimulate growth in the real economy and facilitate social mobility, thereby delivering tangible benefits and opportunities for citizens.


Furthermore, mortgage finance can act as a bridge between energy efficient renovation of the EU’s building stock and financial stability, by supporting credit risk enhancement for borrowers and improved asset quality for lenders, as demonstrated by the recently published EeDaPP Study into the correlation between building energy performance and credit risk, conducted by Ca’ Foscari University, Venice and CRIF. In this respect, the EMF-ECBC also welcomes the Communication’s acknowledgement that an improved regulatory environment will form an integral part of the base upon which energy efficient financing mechanisms can be scaled-up to meet the challenge of the coming decade.


To recap, it has been estimated that achieving the new 2030 climate and energy targets will require almost EUR 300 billion of additional annual investment in buildings alone. This flow of investment will need to be sustained over time and will require the channelling of private finance to support the transition, as a complement to public finance.


It is against this overall backdrop that the EMF-ECBC, together with a group of pioneer partners and 65 EEMI Pilot Banks, has been undertaking efforts since 2015 to establish a new, green market paradigm by way of the EEMI. At the time of writing, EEMI stakeholders are coordinating further actions to develop green financing products in support of the Renovation Wave in the form of the soon to be launched Energy Efficient Mortgage Label for consumers, SMEs, lenders, investors and policy makers.


Commenting on the European Commission’s announcement, EMF-ECBC Secretary General, Luca Bertalot, said:


“The EMF-ECBC welcomes today’s publication of the Renovation Wave Communication and fully supports its goals which are closely aligned with those of the Energy Efficient Mortgages Initiative. In the context of the current, unprecedented crisis scenario, we stand ready to deliver concrete solutions and market support to foster economic recovery and stimulate a green Renaissance, which will turn challenges into opportunities and transform our cities, our towns and our homes into better places to live.”