Quality label for energy efficient mortgages goes live

The "Energy Efficient Mortgage Label" (EEML), a new quality label that banks can obtain for their mortgages granted to finance energy efficient properties, will soon be introduced to the banking market. The label, which was primarily initiated by the European Mortgage Federation/ European Covered Bond Council (EMF-ECBC), will be officially launched at a virtual event on 12 February. The EEML is intended as a private-sector quality label for consumers, lenders and investors to identify energy efficient mortgages in the portfolios of credit institutions. It is also intended to support "green" projects at EU level (e.g. EU Green Deal). Banks can apply for the EEML for their loan programmes that meet the requirements for energy efficient mortgages defined by the Energy Efficient Mortgage Initiative (see chart) as part of a self-certification process. Upon receiving the label, banks must report at least quarterly on key features of their EEM portfolio using a standardised reporting format (Harmonised Disclosure Template, HDT). The HDT is intended to become a global reporting standard for energy efficient mortgage portfolios.

In our view, the label for energy efficient mortgages is a first step in the right direction to provide more transparency in the green mortgage market. However, the EEM definition on which the label is based is formulated in very general terms and, at least at present, as we understand it, is based only on current market standards, which are also likely to vary from country to country.

-- Thorsten Euler

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