Around the world, the private sector is leading the transition to renewable energy, with annual investment now approaching nearly $300 billion. However, many of these economic and environmental gains are lost through inefficiency, particularly in our buildings. Current investment in energy efficiency falls short of what is possible and what is needed to meet climate change targets. This toolkit will make it easier for financial institutions to carry out risk appraisals and assess value, for developers to attract capital, for businesses to fund projects and for citizens to access home improvement mortgages.
The European Commission has proposed 2030 energy efficiency targets of 30%. Some 80% of Europe’s investment in energy efficiency is in the building sector. This reaches as much as 90% in Germany, France and the UK, which means the potential for market growth is enormous.
For example, France aims to reduce housing energy use by 38% by 2020. This will require 500,000 renovations a year, creating a potential financing market of nearly €6 billion. To make that possible, the European Union, European Investment Bank and private sector companies, like the BPCE banking group, are working together through the ELENA initiative. Already, €110 million of European Union support is triggering €4 billion of investment. As a result, schemes like the Picardie Renovation Pass are providing a one-stop-shop to help home owners cut energy use by 50-75%. So, young families, like the Ilics and the Coppin-Wachnickis, and retirees, like the Lamberts, live in healthier homes, with lower fuel bills. What’s more, nearly 3,000 local workers are supported, with 300 jobs saved or created.
This practical guide to energy efficiency transactions aims to scale up that kind of engagement, investment and benefit. In sharing a standard framework, best practice and common language, it builds understanding and operational capacity for any organization appraising the value and risks of projects.
UN Environment’s Finance Initiative has been working on these issues with leading banks, investors and insurance companies since the 1992 Rio Earth Summit. Close collaboration with the European Commission and financial institutions across the continent has made this toolkit possible. I hope that relationship will go from strength to strength and recommend this toolkit to any policy maker, investor, business, developer or citizen seeking a more inclusive, green economy.