In the Eurozone, the Bank Lending Survey reveals a continued tightening of credit standards for businesses, with a notable exception in Italy, where credit conditions have eased for low-energy manufacturing firms.
This divergence is attributed to banks' risk tolerance, particularly in France and Germany.
Over the past year, credit terms have favored 'green' companies while becoming stricter for 'brown' ones, influenced by evolving regulations on sustainability reporting and climate risk assessment.
A dynamic component of sustainable finance is the 'green mortgage, ' which lacks a standardized definition but generally refers to loans with favorable terms for energy-efficient properties.
These mortgages have grown significantly from 2020 to 2022, with major banks leading the charge.
An Occasional Paper by the Bank of Italy highlights a modest 'green mortgage discount, ' offering slightly lower interest rates for energy-efficient homes.
Despite the small financial advantage, these mortgages are pivotal in the context of the EU's energy performance directive, which aims to reduce the real estate sector's substantial energy consumption and CO2 emissions.
The directive, effective from May 2024, underscores the importance of the real estate sector in achieving decarbonization, as buildings account for a significant portion of energy use and emissions in the EU. The transition to energy-efficient buildings is crucial for economic growth and job creation, aligning with the broader goal of reducing environmental impact.