How to comply and align with the EU policy agenda 

In recent years, a comprehensive but complex regulatory and supervisory landscape has emerged around the concept of sustainable finance, as the EU authorities and Member State governments have realised that the scale of investment needed to achieve the EU’s energy savings targets cannot be met by the public sector alone and that the EU financial sector will play a fundamental role in the climate transition, with positive spillovers for economic growth and job creation.

In the first of this series of two Reports, we identified and explored the key touch- points between the EU regulatory and supervisory landscape and energy efficient mortgages, with a focus on the Energy Efficient Mortgage definition, Energy Efficient Mortgage Label and the prudential treatment of energy efficient mortgages. This analysis concluded that the landscape presents very specific impacts and opportunities in relation to the development of energy efficient mortgages and, as a result, the key outputs of the Energy Efficient Mortgages Initiative (EEMI) and the present Project, the Nordic Energy Efficient Mortgage Hub (NEEM).

The analysis furthermore points to the fact that no part of banks’ activities will remain untouched by these policy and legislative initiatives and actions, whether they be retail, funding or supervisory-related and draws particular attention to the most significant impact on banks’ activities of this landscape, notably those which impact materially on the three pillars of the supervisory framework.

This analysis was intended as a precursor to the present Report which considers the challenges and opportunities faced by lending institutions in relation to energy efficient mortgages starting from a supervisory perspective and then moving on to retail and funding considerations.