EBA Seeks Input From Credit Institutions on Green Loans and Mortgages
On 13 February 2023, the European Banking Authority (EBA) launched an industry survey to receive input from credit institutions on their green loans and mortgages as well as market practices related to these loans. The survey is targeted at credit institutions and aims to collect both quantitative and qualitative information that EBA can use to respond to the European Commission´s Call for Advice from November 2022 on the definition of and possible supporting tools for green loans and mortgages to retail and SME borrowers.
Institutions interested in participating in the survey are required to contact their national competent authority in their EU/EEA country to receive the survey templates as well as the information on the process. The deadline for the submission of input is 7 April 2023.
EBA will organise an industry workshop with institutions participating in this survey. The survey is framed within EBA’s work on its advice to the European Commission – due by 29 December 2023 – following the Call for Advice of November 2022, which builds around the following four areas:
- An overview of existing market practices
- A green loan definition based on the EU Taxonomy
- Measures to encourage and facilitate the uptake of green loans while ensuring the protection of retail borrowers
- Green loan origination process.
The Call for Advice is part of the wider European Commission Strategy on Financing the Transition to a Sustainable Economy. The development of a more inclusive sustainable finance framework is one of the four policy areas of the Strategy, striving to allow households and SMEs to access sustainable finance. The EBA´s advice intends to allow the Commission to consider measures to encourage the development of the green loans and mortgages market.
The request from the European Commission is based on and complements ongoing work on the EU sustainable finance framework. These include the EU Taxonomy Regulation and related sustainable finance efforts such as the European Green Bonds Standard proposal.
EDW strongly supports the European Commission’s strategy for financing the transition to a sustainable economy, which highlights the need to develop measures that support the uptake of green loans and mortgages by households and SMEs. In fact, EDW is at the forefront to enhance data transparency for investors via its participation in sustainable finance projects such as ENGAGE for ESG Activation Investments and Green Auto Securitisation (GAS). In particular, ENGAGE plans to integrate the requirements of the EU Taxonomy into a Green Investment Portal to help financial institutions check the alignment of their mortgages and home renovation loans with the Taxonomy, whilst the GAS study investigates how a green finance mechanism could support the financing of low-emission vehicles (LEVs).