Joule Assets Europe will participate in EEFIG’s Working Group on “Input on energy efficiency to the emerging sustainable finance taxonomy and tagging of energy efficiency loans”
Before investing in an environmental sustainability initiative, it is critical for financiers to first assess whether such an investment is in line with their risk/return profile. There are major barriers in this assessment process, however, preventing organizations from growing via third-party financing.
To identify and address the barriers to long-term financing of energy efficiency, the European Commission Directorate-General for Energy (DG Energy) and the United Nations Environment Program Finance Initiative (UNEP FI) created The Energy Efficiency Financial Institutions Group (EEFIG) in 2013.
A member of EEFIG since 2016, Joule Europe has been selected to contribute as member of its newly launched Taxonomy and Tagging working group, which aims to enable informed investments in clean energy and environmental protection, providing transparency and clarity to investors. The group is expected to contribute to the development of an EU classification system used to determine whether a given economic activity is environmentally sustainable.
EEFIG’s taxonomy and tagging group will focus on understanding how national Nearly Zero-Energy Buildings (NZEB) definitions and Energy Performance Certificates can be used in the process of identifying sustainable investments in buildings.
The partnership will benefit Joule as well as investors. In order to reach Europe’s 2050 goal of over €1 trillion annual average investments, it is essential for Joule to work with EEFIG to create an appropriate support structure for private funds. Joule will also use the working groups as an opportunity to share our best practices on EE investments, collected through our eQuad platform, furthering our goal of creating a sustainable energy asset framework for small and medium energy efficiency projects.
Joule helps developers standardise their projects, while guiding investors to contribute to sustainability initiatives. A common taxonomy will enable Joule to further support and grow our current investor base, while identifying sustainable investable assets in a quick, cheap and scalable manner. These actions will collectively enable potential investors to approach environmental initiatives with greater clarity, and to invest confidently.
Facilitating the creation of a uniform classification system will also streamline global communication. Numerous financiers are looking to expand to new European markets, but struggle to overcome the confusion of different national labels, standards and rules.
Appropriate EU taxonomy will both diversify investors’ risk, and support access to finance by developers who are active in different sustainability sectors.
The creation of this taxonomy will be a strategic financial move for EE project developers in two key ways:
· It will enable effective communication between different types of financial institutions within the same project portfolio (e.g. banks, private equity funds, leasing companies, etc.).
· It will support portfolio diversification – by allowing bundling of sustainable investments that are currently treated as different under the same investment umbrella (e.g. waste management, energy efficiency, water treatment, renewable generation).
We are proud to apply our expertise in energy efficiency project finance to a broader European framework: lowering the risk of energy efficiency investments and thus enabling a fast and effective transition to clean energy.