Jyske first to disclose under EEM Label in industry push

Jyske Realkredit published the first Energy Efficient Mortgage (EEM) Label harmonised disclosure template yesterday (Thursday), with the EMF-ECBC hailing the move as supportive of preferential treatment for green mortgages as the EBA and European Commission move ahead with regulation.

Launched in February, the EEM Label offers mortgage lenders a platform to disclose green products and energy efficiency data on their portfolios, with a view to promoting transparency and collating data under the umbrella Energy Efficient Mortgages Initiative (EEMI).

The EEM Label now has 27 members, with Denmark’s Jyske the latest joiner but the first to disclose its mortgage portfolio energy efficiency data in a harmonised disclosure template (HDT). The HDT provides a breakdown of some 150,000 loans according to various categories, including energy performance certificate (EPC) or estimated EPC.

“We believe it is important that financial institutions disclose data on sustainability in a standard format as the EEM HDT and we are proud to be the first financial institution to publish the template,” said Christian Bech-Ravn, head of rating and investor relations at Jyske Realkredit. “We look forward to developing the HDT even further in the coming years and providing even more transparency on sustainability for investors and borrowers.”

Jyske in February announced that it was introducing green mortgage loans for corporate clients financed by green covered bonds and outstandings now amount to DKK1.86bn (€250m). The green bonds are issued under the Jyske group’s green finance framework, which as well as green buildings, includes categories such as renewable energy and clean transportation. Jyske is targeting an increase in lending against green commercial buildings to DKK10bn before the end of 2025, and the development of products to incentivise clients to make energy saving renovations.

The HDT includes breakdowns of Jyske Realkredit’s entire mortgage portfolio, as well as the residential and commercial cover pools backing its covered bonds, and also a breakdown of those assets that fall under the EEMI definition of an energy efficient mortgage.

“We believe that investors will require more transparency on ESG for their investments, not only for green bonds, but for the entire company/cover pool they are investing in,” said Bech-Ravn.

Jyske Realkredit: share of EEM eligible mortgages in total portfolio (volume outstanding)

Source: EEM Label website

Jyske Realkredit has been publishing its own sustainability transparency template since 2019, showing related data such as CO2 emissions, property type (e.g. social housing) and relevant SDGs for its mortgage loans and covered bonds.

The publication of the first EEM Label HDT comes a day after the European Banking Authority (EBA) published a report on the management and supervision of ESG risks for banks, with a view to including them in its Supervisory Review & Evaluation Process (SREP).

The European Mortgage Federation-European Covered Bond Council (EMF-ECBC) is meanwhile pushing for preferential treatment for energy efficient mortgages as the European Commission prepares its Basel III implementation proposals, citing recent analysis that it hopes to bolster through the EEM Label.

“In the context of the implementation of the final Basel III Framework into EU legislation, Jyske’s full disclosure of data relating to its energy efficient mortgage portfolio is a major step forward in meeting the EEM Label’s objectives, in terms of compliance with prudential norms and transparency requirements,” said Luca Bertalot, EMF-ECBC secretary general and EEM Label administrator.

“This significant development sends a clear signal to the G20 and COP26 that the banking sector can play a transformative role in the climate transition, and is leading a Green Renaissance.”

In a letter to Bertalot seen by Sustainabonds, Mairead McGuinness, European Commissioner for financial services, financial stability and capital markets union, commended the EEMI.

“I see it of particular relevance for the analysis on how the promotion of sustainable objectives through energy efficiency actions impacts property values,” she said.

Jyske’s move comes after Berlin Hyp became the first German member of the EEM Label on Monday, and Bertalot said he expects membership to expand further in the coming months.

ABN AMRO