Legal & Regulatory News

European Commission publishes EEFIG working group’s final report

On 17 November, the European Commission published the Energy Efficiency Financial Institutions Group (EEFIG) working group’s final report, ‘Applying the Energy Efficiency First principle in sustainable finance’. The Loan Market Association is delighted to have participated in the EEFIG working group, which has been looking at ways to embed the energy efficiency first principle amongst financial institutions.

The energy efficiency first approach is defined by the Commission as “taking utmost account in energy planning, and in policy and investment decisions, of alternative cost-efficiency energy efficiency measures to make demand and energy supply more efficient”. As one of the five pillars of the European Union’s energy strategy, the principle was formally established by the Energy Efficiency Directive, and has been integrated into numerous key regulations, with the objective of reducing energy consumption and production.

The recommendations for financial institutions are organised into three levels including policy and governance, portfolio and transaction. These recommendations are accompanied by twenty-five tools – for example, measuring the energy efficiency of a portfolio. At the transaction level, the recommendations encourage financial institutions to help clients identify and assess energy efficiency aspects of projects and assets. This means that, by adopting these recommendations, financial institutions not only have the potential to reform their own practices, but also encourage the financing of energy efficiency measures which contribute to climate change targets.

In addition to financial institutions, the report also provides recommendations for other stakeholders and for public policy makers on building capacity to increase energy efficiency measures.

Click here to read the report.