Green Mortgages & Renovation Loans

A toolkit for Financial Institutions Paying less for more!

Increase Asset Values

Reduced Mortgage Default & Other Credit Risk

Improve Cash Flow for Borrowers for their Green Homes

Assure expected green performance through credible, low cost, certification programs

Greater Environmental Responsibility for our Planet

SMARTER FINANCE FOR | 1 1 FAMILIES Introduction

A successful and growing initiative that combines rewarding the greenest residential projects with innovative, discounted green financing , and awareness-building activities for homebuyers, creating accessible and widely-promoted GreenHomes. The solutions database helps project design teams find and learn about your solution!

AMBER GARDENS BY ALESONOR. A NET-ZERO ENERGY HOME ELIGIBLE FOR A GREEN MORTGAGE

As of July 2020, the Green Homes program has certified has signed agreements to certify over 10.000 housing units in Romania representing over €1.500.000.000 of residential project value.

The Green Homes certified by Romania Green Building Council program prepares builders and the industry for important 2020 EU regulations for Net Zero Executive summary Energy Buildings, Construction Waste reduction, use of non-toxic materials, and reduced environmental impact of the production of those materials.

Supporting the creation of Green Homes residential projects that are is supported by leading academic institutions through a credible, cost-effective environmentally-responsible and including the Université Libre de Bruxelles Example of total monthly cost of certification pogram represents an energy efficient relative to the standard and the Copenhagen Centre on Energy ownership for a 100K EUR apartment opportunity for residential investors & offer in Romania generating financial, social Efficiency; A partnership of the United See Appendix 3 for more details developers to differentiate the quality Nations Environment Program and Danish and environmental benefit. Increased 700 and environmental performance of their Technical University. energy savings and other financial benefits 680 construction projects while educating (such as improved occupant health and 660 consumers about the financial and wellness less frequent/ lower home repair costs) The introduction of such a financial poduct 640 benefits. Financial institutions – through substantially reduce the mortgage default is very timely in the context of the current 620 the issuance of Green Mortgages tied to risk allowing the lender to lower the and impending European Directives 600 certified Geen Homes – can significantly monthly interest rate while maintaining that require progress toward Net Zero 580 reduce their mortgage default risk and raise profit magins. This enables the home buyer Energy Buildings, significantly reduced 560 the asset valuation of homes they finance to invest into a more energy efficient and construction waste, and reduced toxicity EPC EPC RoGBC in order to offer a lower cost of financing. greener home while lowering their total of building materials compulsory for all "B" rated "A" rated Green Homes monthly cost of ownership. Lower financing costs provides the new and existing residential buildings. apartment apartment certified apartment homebuyer with greater purchasing Growing energy security concerns and power to invest in improved construction rising energy costs reward residential quality. As the Green Mortgage accurately The project is strongly supported by projects that require less costly and naturally values the significant reduction in energy, the European Commission’s Directorate scarce resources to build and operate. By repair and health costs of those who General Energy (DG Energy). It is also on contributing to the creation of certified purchase Green Homes. Green Mortgages the forefront of aligning the green home Green Homes, residential investors and also help the Romanian marketplace certifications with the Directorate General developers can greatly facilitate a rapid and better evaluate the positive value of Environment’s (DG Environment’s) Level(s) profitable transformation of the construction sensible borrowing to invest properly at the framework to include embodied carbon/ and real estate industry towards a low beginning of the building process. Life-cycle Assessment and success carbon/green economy. This initiative creates a consortium between towards a Circular Economy. The project a bank, an investor/developer, a home is being implemented by Green Building buyer and a certifier to certify green Councils and National Energy Agencies and

This work revised from 1 August 2014 is licensed to the SMARTER Finance for Families consortium, and the Romania Green Building Council and under a Creative Commons Attribution-Non-Commercial-No Derivatives 4.0 International License.

For information please see http://creativecommons.org/licenses/by-nc-sa/4.0/ This replaces the license from the version Romania Green Building Council created in April 2008.

2 Table of contents

Opportunities & challenges for Romanian homes 4

What is a Green Home? 7

Assessing green performance of projects to determine qualification for Green Finance 8

How does the “Green Homes certified by RoGBC” Program work? 9

What are the typical costs to the Project Developer for RoGBC’s Green Homes certification? 10

What is a Green Mortage? 11

How does the RoGBC Green Mortgage program work? 12

Green Mortgage Eligibility Process 13

Responsibilities & Benefits from the program 14

Other Benefits to Stakeholders 15

Assessing Renovation projects for eligibility for Green Finance products 16

Green Renovation Loan Eligibility Process 17

Risks and mitigating factors 18

EU Taxonomy 19

About the Romania Green Building Council 27

Authors and researchers of the Green Homes certified by RoGBC and Green Mortgage program 29

Frequently asked questions 30

Reference notes cited in this toolkit 31

Appendix 1: Multi-Family Assessment criteria for Green Homes certified pojects New Construction & Major Refurbishment, Renovation & Retrrofits 32

Appendix 2: Single Family Assessment criteria for Green Homes certified pojects New Construction & Major Refurbishment, Renovation & Retrrofits 35 Appendix 3 36 Financial example for Green Mortgages

Appendix 4 37 Selection of projects for RoGBC’s Green Homes & Green Mortgage program

3 Opportunities & challenges for Romanian home

Romanian energy costs as a percentage of family income are the 2nd highest in the European Union.

There is a direct correlation between the Another comprehensive academic study Health issues of the borrower or a family energy efficiency and green performance found mortgage defaults were: member have material impacts on the of a home and the level of quality in the ability to pay financial obligations. Holding design, construction and operation of – 32% less likely if the apartment healthier homes in mortgage portfolios will that home. Fear of bank financing often building is within a mile of protected have a material, positive financial benefit leads homeowners to make suboptimal open space; from reductions in accidents like: decisions and underinvest in the design – 34% less likely if the building is in a and construction process (often choosing neighborhood with at least 16 retail – from bad lighting or mistakenly homes only on the lowest “Cost per Square stores; and installed electric wirining – 58% less likely if in an area where at Meter” value) and resulting in owning – from exposure to volatile organic least 30 percent of workers commute homes that are more costly to heat and cool, compounds (VOCs), formaldehyde, by subway/elevated train.2 require more maintenance, more frequent asbestos, lead, mold, and radon renovations, and subject to reduced long- through choosing healthier building A study of over 1.6 million homes in North materials and utilizing proper insulation term asset values relative to Green Homes. America released in June 2014 concluded and renovation techniques; and Certified green homes have a 9% certified green homes have a 9% increased – from exposure to carbon monoxide selling price relative to standard. The green and tobacco smoke from better increased selling price relative to homes in the study averaged 20 to 30% ventilation. standard. The green homes in the savings in energy and water use compared to code-built homes. A lower level of code Sensible financing is the best choice to study averaged 20 to 30% savings in and similar low energy prices indicate the bring forward the available resources early energy and water use compared to market can expect similar price premiums/ into the construction process of homes. asset values for certified Green homes as This allows the homeowner to offset their code-built homes. the study identified.3,4 early investment in quality and energy performance (via monthly mortgage Some of the most prevalent reasons for payments) with the enhanced savings (via The most cost-effective moment to invest in early damage to a home affecting ongoing reduced monthly energy and repair bills). energy efficiency and other green features energy efficiency, visual appeal and asset This allows banks underwriting mortgages of a home is at its initial design and creation. value include insufficient and/or improperly to offer lower costs of financing without This is particularly true regarding the installed thermal and hydro insulation. loss of profitabiliy due to better repayment “building envelope” or the roof, windows Green building solutions, by design and by rates and higher long term values of the and walls which contribute substantially definition, must be durable and therefore properties they finance. The points that to energy efficiency performance but are reduce the frequency and severity of repairs follow ofer additional benefits from costly and problematic to improve after to a home. supporting greener homes. the initial construction is complete. Buildings account for over 30% of total In a 2013 study of 71,000 homes energy consumption and 40 to 50% of CO2 comparing default risks in Energy Efficient emissions in Europe. and Green Homes to standard homes, a 32% reduction in mortgage default risk was The current building regulations and found in the Green Homes. The study also achievement of an “A” on the Romanian Energy found that homes that exceed the minimum Performance Certificate require only a low level standard to be considered “green” for the of energy efficiency which leads to high energy study exhibited an even higher reduction costs for the end-users during the period of in default risk. The annual energy savings ownership. Furthermore, the energy audit process is inconsistently applied and leaves for green homes can be equal to one or two little incentive for a developer/investor to aim mortgage payments per year.1 for higher performance as they fear buyers will not be able to recognize the existence of superior building energy performance.

4 The Romania Green Building Council – Significant restrictions on toxic organizes the Green Home Pavilion@ chemicals allowed in building TNI in partnership with the National Real materials and requirements to Estate Fair held twice yearly in Bucharest. disclose all chemicals used in The Green Home Pavilion showcases the materials production (e.g. REACH country’s exemplary green residential legislation). projects and the solutions that made Sensible financial mechanisms such them possible. RoGBC also delivers as Green Homes & Green Mortgage presentations about the financial, health programes prepare the Construction and and others benefits of Geen Homes. Real Estate industries for this impending Key EU-driven legislation will dramatically legislation ensuring that green building improve the quality, energy and green pioneers have the financial tools to deliver performance of homes beginning now and homes to the market today or in the near increasingly over the coming years. This future that include a strong business case includes: for all stakeholders. – Nearly “Net Zero Energy Buildings” Most countries - and all in the European by 2020 requiring ultra low energy Union - require Energy Performance buildings and energy use requiring Certificates for new buildings and during offset by production of green energy; significant events for existing buildings such – The amount of Construction Waste as sales, rentals, and major upgrades. The required to be diverted from landfill, cost of the energy audit, therefore, no longer currently ~25%, to be increased to 70%; and represents an optional or additional cost but home buying public and active real estate a required cost of the real estate developer. developers and investors. Green Home Pavilion@TNI has proven to be the most popular exhibit at the tradeshow and continues to add partner developers and solution providers, demonstrating the growing interest in sustainable construction approaches in Romania.

The National Bank of Romania joins The Network of Central Banks and Supervisors for The EU Taxonomy for Sustainable construction of new buildings, renovation Activities1,2,3,4 ('EU Taxonomy') is a of existing buildings, individual renovation Greening the Financial System classification system under which measures and the acquisition and (NGFS) environmentally sustainable activities are ownership of buildings. The table below defined to help investors, companies, demonstrates where the SMARTER issuers and project promoters navigate the Assessment Criteria meets or exceeds the In October of 2020, The National Bank of transition to a low-carbon, resilient, technical screening criteria and DNSH Romania (NBR) became a formal member resource-efficient and sustainable Assessment for each building-related of the Network for Green the Financial economy. The EU Taxonomy considers four economic activity addressed by the EU System as they move towards addressing economic activities in the building sector: Taxonomy. the nexus between environmental and financial risks with respect to top global climate-related policy initiatives. SMARTER Finance for Families: Assessment Criteria for Green Homes Certified projects: (New Construction, Major Refurbishment, Renovation and Retrofits) X EU Taxonomy for Sustainable Activities: Cross-Evaluation EU Taxonomy for Sustainable Activities They join over 80 central banks and SMARTER Finance for Families Mitigation Activities Adaptation Activities Assessment Criteria for Green Homes Certified projects: Constrution of New Buildings Buildings Renovation Acquisition and Ownership of Constrution of New Buildings Buildings Renovation supervisors in improving the analysis, New Construction, Major Refurbishment, Buildings Renovation and Retrofits Technical Do No Significant Technical Do No Significant Technical Do No Significant Technical Do No Significant Technical Do No Significant management, and reduction of climate- Screening Criteria Harm Assessment Screening Criteria Harm Assessment Screening Criteria Harm Assessment Screening Criteria Harm Assessment Screening Criteria Harm Assessment Environmental Leadership related and environmental risk in the Ongoing Performance Site & Location banking sector. The NBR is moving Water Efficiency toward alignment and application of Materials and Resources Human Health & Wellness specific climate risk analysis tools within Energy Optimisation Innovation the financial stability policy framework 5 SMARTER Comprehensively Meets or Surpasses EU Taxonomy 26 70 23 65 23 65 165 65 165 57 organized in conjunction with the IMF . SMARTER Assessment Criteria Exceeds EU Taxonomy for Sustainable Activities Technical Screening Criteria SMARTER Assessment Criteria Meets EU Taxonomy for Sustainable Activities Technical Screening Criteria SANELA KLARIĆ PRESENTING GREEN HOMES GREEN MORTGAGES AT @MOSTAR GREEN DESIGN BIENNALE IN BOSNIA & HERZEGOVINIA

5 What does the market think?

EnR feels that SMARTER Finance for Families will be a benefit to the objectives of the European Energy Agency due to: An innovative approach to unlocking essential, additional construction Implications Need For Action budgets for residential projects without elevating the monthly cost Economic In consideration of the previous facts and to homeowners/homebuyers. The increasing energy costs and relatively implications, engaging the financial Actions to improve the credibility and insufficient energy efficiency in homes industry, residential investors/developers appreciation of Energy Performance will constantly be augmenting the strain Certificates as a valuable tool for on households’ available monthly cash and those that provide the necessary important stakeholders such as and limiting the ability to pay debt solutions to develop energy efficient and the banking industry, as well as citizens obligations. Poor building quality increases environmentally-responsible homes are and government agencies charged with maintenance/repair costs and reduces a necessary and economically-preferable improving energy efficiency and the future market value of homes in the solution to reduce the financial risk of mortgage promoting green energy usage. event they must be repossessed by the portfolios and “future proof” homes for bank; raising potential losses of mortgage upcoming conditions in the near and The intent to better leverage public financing by creating “hybrid” portfolios and the cost of borrowing for long term. Banks’ mortgage portfolios solution to Energy Poverty that potential homeowners. will perform better if homebuyers select promises to serve more citizens while sensible, cost-effective homes with the Social making this challenging market more long-term financial outlook of the property appealing to private sector banks. Loss of energy subsidies without adequate considered at the time of taking the preparation will affect all households and mortgage and purchasing the home. The Ilaria Bertini all income levels. More so, this role of investors/developers and green Head of ENEA’s Department More so, this disproportionately affects the for Energy Efficiency building solution providers in leading the low and middle-income class as the energy way is of paramount importance. bill is a higher percentage of their income and they generally live in lower quality (hence lower energy efficient, albeit smaller) houses.

Additionally, unstable energy security reduces policy options to confront aggressive petrol driven countries leading to increased or prolonged conflic We believe that the project “SMARTER conflict. Finance for Families” will contribute significantly to meeting sustainable Environmental development goals through proposed At the planned rate of construction, the measures to expand successful negative impact on the environment Green Homes & Green Mortgage of home construction is increasing programmes to new European markets, significantly, as well as the stress on the and to develop essential supporting stock of conventional fossil fuels and on the tools for these programmes. supply of natural resources. Scott Foster Director Sustainable Energy Division

Given a growing supply of conclusive evidence concerning the challenges with the security and projected long-term costs of conventional energy supplies, and the lower We think that collaborative efforts putting together sustainability excellence maintenance costs of green homes, ‘business as usual’ is with the banks to reward the lower risk of greener homes with discounted the risky choice for banks wishing to minimize risk in their interest rates will greatly help the mortgage loan portfolios. residential market grow in the best interest of all involved stakeholders. Steven Borncamp Umberto Irti Project Director, SMARTER Finance for Families Managing Director COAF SRL Lead Author, Green Homes & Green Mortgage program

6 What does the market think? What is a Green Home? We are confident that this project would provide a great benefit to our building industry and the citizen building potentially attractive programs to significantly increase consumer engagement and uptake of Green Homes. There are many valid approaches to creating Bioclimatic Design: Lighting, PhD Alexandra Velická a Green Home but all are thoughtful in their Shading and More General Director design, construction and operation to Green Homes use “bioclimatic design” minimize or eliminate the environmental principles that include shading from the impact of the home. Here are some of the summer sun and collecting the winter main components of Green Homes: sun with thoughtful orientation of the building and placement of the windows and skylights. Deciduous trees drop their leaves Energy Efficiency & Green Energy in winter to allow in sun and evergreen We have successfully collaborated with Using “Bio-Climatic Design” principles trees keep their leaves to protect against the Romania Green Building Council (explained further below), a superior harsh winter winds and “solar gains” in a joint implementation of green “Building Envelope” with significantly from summer sunshine. Indoor lighting is finance initiatives and we believe the improved insulation and better doors and designed to ensure a safe, productive, and activities supported by the SMARTER windows, and more efficient Heating, warm environment with a minimum amount Project will have a crucial positive Ventilating, and Air Conditioning (HVAC) of energy use. Designs that ensure natural contribution to our current and future or natural ventilation and “Passive House” daylight enters the building without solar green finance offerings as well as help approaches; a Green Home minimizes gains in summer contribute to a Green improve the building industry’s capacity energy use. Introduction of Green Energy Home. to deliver better, safer and healthier – either on the home itself or through homes to the Romanian customers. Construction Site and ongoing specifying contractually the delivery of Vladimir Kalinov Green Energy through Energy Suppliers Property Management Vice President Raiffeisen Bank Romania ensures the reduction or elimination of fossil The construction process of a green home fuel derived energy. takes important steps to ensure the building does not damage or destroy the surrounding Location environment (reducing/eliminating erosion, The construction of a green home does not protecting existing trees and biodiversity utilize land with important contributions on the site). In addition, residents receive to biodiversity or a city’s green space. The information and have facilities (e.g. location reduces transportation impacts by Composting area, Recycling Collection Helping projects with energy efficiency having access to public transportation or rail area, etc.) to operate their homes in an and green performance differentiate or bus terminals and/or is in a “walk-able” environmentally-responsible manner to themselves from their competitors using community with the homeowner’s needs for ensure the home over time has a neutral to credible energy performance certificates, shopping, dining, schools, etc. nearby. positive impact on the planet. Landscaping green certification and significant is created using prolific and indigenous energy efficiency measures in general Sustainable & Healthy Materials plants to minimize “Urban Heat Islands”, is part of our Green Lending strategy. Green Homes utilize materials that are as well as reduce the need for pesticides, Our organization will participate in the nontoxic to the home’s occupants and safe fertilizers and irrigation systems. planned education and capacity building in their production. Heavy construction activities to support Green Housing loans. Other Green Design Principles materials are chosen that are manufactured David Gabelashvili Green Homes are designed to be durable close to the construction site to minimize Director JSC ProCredit Bank Georgia transportation impact. Materials that to minimize repairs and heavy construction Levan Khmiadashvili contained recycled materials or, better, work if future needs changes. Smart design Energy Efficiency Expert creatively “up-cycle” or “re-purpose” allows for different uses of the home as items that might otherwise end up a family’s needs change or new owners as waste should be included. Durable arrive with different needs. Green building materials mean less repair costs, principles demand better planning efforts less construction waste, and reduced and “Integrated Design” of the different environmental impact over time. disciplines to ensure optimal results, maximizes the use of space, avoid costly Indoor Air Quality construction mistakes, and minimize waste Homes’ Construction and Renovation Technology solutions and natural ventilation using ambitious energy efficient (or both) are employed to ensure air is both Green Homes Scorecard and green standards will create healthy and pleasant. Paints, other coatings This scorecard of criteria (see Appendix 2) opportunities for greener energy and adhesives are chosen that do not provides a full understanding of the criteria sources as well as assist out citizens introduce toxins into the home. that need to be achieved to be certified as a Green Homes approved project. in the form of lower energy bills and The scorecard for both single family and greater heating and cooling comfort, multi unit homes are available in Appendix II combating energy poverty. of this toolkit. Ivaylo Aleksiev Executive Director

7 Assessing green performance of projects to determine qualification for Green Finance

Th ere are two types of processes to be The second type of process to be considered considered when assessing the eligibility includes smaller renovation projects where of projects for Green Finance products. homeowners’ scope of work does not allow the full range of green criteria to be The first process includes full or holistic applied yet still deserve to benefit from projects where the green assessment Green Finance products. Here lenders can would provide a certification of the entire incent the purchase and finance of building project. This type of assessment would be materials, products, technologies and most suitable for projects including: services which have substantially improved environmental qualities. The substantial 1. new construction of a number of projects and relatively low homebuyer’s own home investment value may make these projects less practical to provide a dedicated Green 2. new construction by a professional Homes assessor. For these projects, a selection developer of a multi-family apartment of “pre-approved” solutions that qualify for complex, townhomes or villas for resale or green financial products is appropriate. 3. a “deep” renovation by a homeowner or professional developer resulting in This process is described in the section a substantially changed residence and entitled “Assessing Renovation projects likely necessity of a secured mortgage fo r eligibility for Green Finance products”. (e.g. >10.000EUR of investment)

This process requires a dedicated Green Homes assessor and Energy Auditor to advise on the required criteria and certify the achievement of this criteria upon project completion. This type of process is particularly useful for a new construction as a larger number of green criteria can be implemented in the project (including, for example, choosing land with little or no environmental impact, good public transit connectivity, and walkable proximity to essential and desirable amenities).

This process is described in the next section entitled “ How does the ‘Green Homes certified by RoGBC’ program work?”.

8 9 How does the “Green Homes certified by RoGBC” program work?

The advisory and certification process works Registration and signing the Designation of the residential to ensure, a real estate investor/developer/ “Pre-Certification Agreement” project as a “Green Homes certified homeowner building or renovating a home The Project Developer wishing to proceed by RoGBC” approved project” (hereafter referred to as “Project Developer”) with the Green Homes certification by RoGBC upon project completion, RoGBC and a successfully meets the program’s criteria registers the project and pays the registration qualified energy auditor review the project (listed for both Multi-family and Single-family fee. The RoGBC, working with the project as constructed to confirm the criteria as residences in Appendix 2 of this document). team and the information already collected agreed in the Pre-Certification Scorecard The process includes a close collaboration at the Pre-Certification Review further have been achieved. The RoGBC will check between the Romania Green Building Council, defines the achievable criteria. The Project that the new owners are provided adequate the Project Developer seeking certification Developer and RoGBC agree upon which information to operate their home in an for their project, and the project team and criteria will be achieved that provide the energy efficient and green manner. The solution providers who will undertake the minimum score necessary and all mandatory project team is provided the final scorecard necessary actions. The Steps include: requirements to satisfy the established and either a notification of successful criteria of a Green Homes certified project. certification of the project or indications of remaining corrective actions to be taken. Planning a Green Residential Project – Preliminary Review A “Pre-Certification scorecard” is signed by the Project Developer indicating the actions to be Project Developers considering certifying taken and the method upon which they will be Offer a Green Mortgage to Home Buyers their project can request a “Pre-Certification assessed. U pon the signing of this document, Projects pursuing the “Green Homes Review” with RoGBC to – in a no cost or low the Project Developer can begin to market certified by Romania Green Building cost manner – quickly assess the feasibility of their project as “Green Homes Pre-Certified Council” designation should discuss early obtaining a Green Homes certification by RoGBC. by Romania Green Building Council” informing in the process with participating banks who The Project Developer meets with the RoGBC potential buyers about the program and the agree to underwrite Green Mortgages that to discuss the project (site location, building green criteria they are pursuing. For those receive discounted financing costs based or renovation approach, energy performance, projects eligible for RoGBC’s Green Mortgage on the green performance and reduced pricing target, etc.) they intend to pursue. The program offered with a partner bank, this is also operating costs of the homes (see “What is a process includes an estimated 2 hour meeting an indicator that this potential financial benefit ‘Green Mortgage’?” in the next section). from which the RoGBC will produce an initial can be mentioned (see “How does RoGBC’s indication of the feasibility in a point-by-point Green Mortgage program work?” section below Monitoring of the Program comparison with the established criteria. Recipients of Green Homes certification agree NOTE: Project Developers are strongly advised Guidance toward a Green Homes to share energy cost date of their homes and to to begin this process as early as possible, even certified residential project operate the units as advised upon purchasing the home. The data will be useful to inform before a site has been selected. Projects that have The RoGBC and a qualified energy auditor, the various stakeholders of the environmental already begun construction can be considered for whose work is verified by RoGBC’s trusted and financial outcomes of the program the RoGBC Green Homes certification program, energy auditors, meet and advise the but they will be held to the same requirements as project’s design team throughout the design, and contribute to future improvements. projects that pursued certification from inception. construction, and commissioning process to guide the project to successful achievement of RoGBC Green Homes criteria. Using criteria agreed to be pursued as listed in the Pre-Certification Scorecard and encouraging “Integrated Design”, the process is designed to ensure projects meet or exceed compliance with the program’s requirements and produce no negative surprises at the conclusion of the project. Through the RoGBC’s “Green Homes Approved Solution Provider” program, project teams can readily identify companies with the technology, materials, and other products and services that will contribute to achieving the necessary green criteria for the project.

9 What are the typical cost to the Project Developer for RoGBC’s Green Homes certifications?

The program is designed to expedite and encourage widespread adoption of greener Multi Family Apartments Non-Members RoGBC Members industry practices. The program has a very modest price structure designed to provide the necessary resources to administer a high- Pre-Certification Review €150 FREE quality coaching and certification process while not causing an undue burden on the partners Registration €1,100 €875 participating in the program. Certification €65 per unit €52 per unit For Homebuyers There is no cost to participate to the homebuyer. They are, in fact, rewarded substantially through Integrated Environmental Assessment €4,225 per building €3,575 per building a lower monthly cost of ownership and better quality, healthier home than the standard offer. The full project must be certified (i.e. not only those units that are transacted via a participating banks’ Green Mortgage offer). For Residential Investors/Developers The following table includes the total fees to certify a residential project. The Pre-Certification fee, if any, is due prior to initiation of the review. The Registration fee includes creation of the Pre- Single-Family Housing / Certification agreement signed between the Non-Members RoGBC Members Investor/Developer and RoGBC. Detached Units

Pre-Certification Review €150 FREE

Registration €700 €200

Certification €475 per home €375 per home €1,500/home Cost is per unique home plan that requires separate evaluation (i.e. this is only charged once on multi-unit projects Integrated Environmental Assessment €2,400 per home* €2,000 per home*

* Cost is per unique home plan that requires separate evaluation (i.e. this is only charged once on multi-unit projects replicating the same plan and construction approach)

Note: Fee structure valid for Projects Registered with initial fee paid by 30 April 2020. To ensure an accurate, mutual understanding, investors/developers are encouraged to discuss the project’s fee structure at the Pre-Certification review. Reasonable Travel expenses, if necessary, must be reimbursed. The necessity of travel will be determined at the Precertification Review to ensue full understanding of the costs prior to initiating the full cerrtification process.

10 What is a Green Mortage?

A Green Mortgage is a unique home mortgage product offered by participating banks that reward the purchase of a certified Geen Home with a discounted interest rate due to the reduced mortgage risk default and higher home values associated with Green Homes versus standard homes.

Per the definition above, a certified Green Homes residential project will have significant educations in the utilities and repair bills allowing households to save extra cash that can be applied to paying back their mortgage. This additional monthly income for the homeowner significantly reduces the risk of mortgage default from the owner of a Green Home compared to standard homes. In return, the bank reduces the monthly interest rate relative to similar products for standard homes due to the improved default risk and higher asset values of the Green Homes in the Green Mortgage portfolio of the bank. The Green Homes certifcation is the indicator to partner The “total monthly cost of ownership” banks that the residential project has been assessed upon completion and satisfes the necessary criteria to receive the of the home is, however, reduced as fnancial beneets of a Green Mortgage. the monthly energy savings and lower mortgage interest rate offset the slightly larger loan required for the purchase of a Green Mortgage qualified

While Green Homes require a new approach, they do not necessarily result in increased overall project costs. We can, however, consider an additional investment of 5 to 15% for construction costs as a potential premium for a home to reach the quality, operational cost reduction and environmental performance of a Green Home. The “total monthly cost Our program conducts workshops and of ownership” of the home is, however, creates an educational brochures in 11 reduced as the monthly energy savings languages for home buyers to be informed and lower mortgage interest rate offset on the financial health and other benefits of borrowing responsibly to buy a green home. the slightly larger loan required for the purchase of a Green Mortgage qualified home. Any green construction cost premium largely contributes to the quality of the construction. This allows the investor/ developer to recoup any additional investment to maintain profit margins without increasing the monthly ownership cost to the home buyer facilitating the transaction.

11 H ow does the Green Mortgage program work?

The Green Mortgage is delivered Identifying Partner Banks through the Green Mortgage program. through a consortium between The Certifier and prospective Partner It is the sole responsibility of the a participating bank, a real Banks agree to jointly administer Investor/Developer to achieve all of the necessary criteria upon completion to estate investor/developer and promote the Green Mortgage program. The program is made enable issuance of the Green Mortgage agreeing to meet the program’s available to all qualified banks offering product. All advertising of interest rates criteria, a home buyer seeking home mortgages who agree to the must conform to local law. the benefits of the program, required criteria. The Partner Bank will continue to be responsible for and the Certifier who guides Completion of Project, Certification all financial due diligence associated the process and evaluates the and transacting Green Mortgage for with its normal underwriting process. Home Buyers project upon completion. The Partner Bank will agree to accept the Certifier’s criteria and process Upon analysis and successful of certification of that criteria being achievement of a project as “Green met as valid to determine residential Homes certified”, the Certifier notifies projects qualified to receive the the partner bank(s) that the project beneficial terms of a Green Mortgage. is eligible to receive the discounted The Partner Bank also agrees to offer terms of the bank’s Green Mortgage a substantive interest rate reduction product. The underwriting process commensurate with default risk is similar to the partner bank(s)’s Luca Bertalot reduction and enhanced long term standard procedure from this point Secretary General of the European asset value of Green Mortgage- forward. Mortgage Federation qualified homes. This discount NOTE: while the Green Mortgage terms are made supporting Green Mortgage program must be significant relative to the available only upon the Certification after the project and presenting at “Changing Finance, has been completed, Investors/Developers must Financing Change” Workshop. normal market offer and not offset confirm with the participating banks at the inception by additional fees and be upheld of the project that the bank(s) are willing to issue throughout the life of the mortgage. mortgages for the project and would extend the benefits of a Green Mortgage should the project qualify.

Promoting Benefits for “Pre-Certified” Green Homes Monitoring of the Program The Investor/Developer agrees, at the Borrowers benefiting from Green beginning of the development process Mortgages will agree to supply annual to create a residential development energy and water usage data to the subject to the Green Homes Criteria and Certifier, confirm the installation signs a “Pre-Certification Agreement” of energy efficient appliances post- (see “How does the “Green Homes” occupancy, and be subject to retesting program work?” section above). The of indoor air quality and water quality. investor/developer meets with the Certifier and Partner Bank(s) to This data will be shared with the discuss including the project in their participating banks to compare Green Mortgage program. Upon predicted versus actual green The Green Homes & performance and to determine Green Mortgage program these partners’ agreement and an is included as a Case accepted and signed “Pre-Certification continued eligibility for a discounted Study in a green finance mortgage. Additionally, the partner guide from the Energy agreement”, the developer/investor Efficiency - Financial can begin to market their project as banks will share information on Institutions Group established by the portfolio performance comparing European Commission’s DG Energy and the “Pre-Certified for Green Homes” and United Nations Environment Programme informing potential buyers they will their Green Mortgage to standard have a special discount on financing mortgage results.

12 13 Green Mortgage Eligibility Process

Project Developer

RoGBC Assessor Pre-Certification scorecard Project Energy Auditor

Home(s) in construction

Bank

Green Mortgage Product

Final score Home(s) card completed

RoGBC collects annual Home(s) energy data and shares in use with the Bank

13 14 Responsibilities and benefits of Stakeholders of the Green Mortgage program

Provides assurance long term energy performance & other cost savings from green features will be delivered

C k ert an ifie B r ng & Delivers homes i Higher disposable E at n with reduced risk of p income from energy e i rg mortgage default ic & other costs savings y t & higher long-term r applied to mortgage A asset value a repayment u P d Ensures practical Ensures residential i t benefits & projects meet strict o r provides green energy performance, mortgage green and quality approved status criteria that can be realized or passed on to new buyers Implements energy efficiency & green criteria

P Shares cost savings Enables higher r o from lower risk with r initial purchasing je homebuyer via e power of c y t discounted mortgage u homebuyer D B e e v m el o op H er

Invests in quality, Sells energy energy efficiency and efficient/green homes green home at equal or lower performance total monthly cost of ownership

Gre ers en H ovid omes Solution Pr

Delivers best-in-class Green Homes solutions to help Project Developers achieve the necessary energy efficiency and green homes performance to deliver to Home Buyers see https://greenhomes.solutions/

14 Other Benefits to What does the market think? Stakeholders

We will fully support this effort including enrolling our latest project “Gelovani Project” into the “Green Homes & Green Mortgage programme” to certify its energy and green performance. M2 creates new standards of quality General benefits of the project and comfortable living in Georgia. We are in a constant search for innovative – Elimination of the initial cost barrier for – The “rationality problem”: people do not ideas which would elevate optimal implementing energy efficient residential always act rationally in their economic design of residential areas and projects; interests when assessing short-term vs construction quality to new heights. long-term benefit. Introducing a Green – Overcomes other market failures that Irakli Burdiladze and Energy Efficiency component into CEO JSC M2 Real Estate seriously inhibit the construction of financing brings a new incentive that greener, more energy efficient homes transforms long-term benefits ino short including: term (monthly) benefit; and – The “agency problem”: the different – Demonstrates a concept that can be interests of the developer and buyer are replicated and scaled upward. aligned though bank financing; Certified Geen Homes require due Mortgage – The “information problem”: lack of consideration of indoor air quality, understanding of some home buyers elimination of toxic building materials In 2017, our organization took the first of the reduction in the overall life-cycle including paints, other coatings, adhesives major step to promote energy efficient costs due to energy efficiency measures and flooring, superior and efficient lighting buildings by launching our Green is overcome by the energy audit, green quality, and other attributes that ensure a Mortgage product. Considering the criteria, coaching through the process and more healthy, enjoyable and valuable home. significant share of residential energy bank financing; consumption, the widespread usage of green mortgages will contribute greatly to Turkey’s energy efficiency targets and its transition to a low-carbon economy. Murat Atay CEO Garanti BBVA Mortgage

The project will also bring important benefits 0 all stakeholders

For the investor/developer, this For the bank, this program provides For the home-buyer, this program program provides provides – Introduction of a new financial poduct – Market differentiation as the Certified with predicable costs and revenues – Benefits fom a higher-quality and energy Green Homes program is the only allowing differentiation in a highly efficient house with a net positive monthly significant, project-level indicator of competitive banking market; financial benefit from energy savings and quality, long-term cost savings, and green a discounted mortgage interest rate; – Reduction of risk of mortgage default performance on the local market; in the bank’s mortgage portfolio via the – The health attributes associated – Assurance of increased buying power of introduction of loans underwriting homes with Green Homes include reduced interested home-buyers; and with lower energy and maintenance costs, exposure to toxic materials (including and higher asset values; carcinogens) and, for example, reduced – Increased demand for a unique market incidence of asthma. Over the length offering and competitive advantage (as – An effective program that aligns the of homeownership, this can provide the home-buyer will not feel the burden of banks’ social and environmental significant financial benefit by lowering the increased initial costs that are covered responsibility objectives with the types of medical costs and reducing work days lost by the loan). preferred projects they choose to finance; due to illness; – Demonstration of the bank’s recognition – A higher price in case of reselling the of the higher value of green buildings in house due to a high “A” score on the terms of income security, quality, and Energy Performance Certificate, additional market value; and green criteria and the associated quality – Contributes to significantly impoving improvements. the environmental responsibility of the construction and real estate industry that also improves energy security and economic opportunities from a low carbon economy.

15 Assessing Renovation project eligibility for Green Finance products

For renovation projects, The RoGBC process assumes the limited Request for Inclusion financial investment in renovation projects (as of an Unapproved Solution(s) where the scope of work compared to full, new construction or “deep” While a sufficient list of approved solutions is is limited, green financial renovation projects) requires a methodology intended to accommodate most renovation to minimize green assessment costs as a plans, Project Developers may desire to utilize products, focus on percentage of total project costs. Therefore a other products, materials, technologies and process to include both an automated portal services not yet approved for use as a “green” where pre-approved products can be selected solution. RoGBC is prepared to quickly assess 1. Pre-approved lists of by Project Developers and a separate process to these ad hoc requests and issue appropriate products, materials, assess solutions not yet pre-approved is utilized guidance to the Project Developer and to efficiently and accurately ensure the desired bank as to the eligibility of the solution. technologies, and green performance in a cost-effective manner. services that improve the For general project guidance, a RoGBC Green Solution Selector Tool Green Homes Help Desk is available to green performance of a This Tool is a web portal with an easy to use assist homeowners achieve their objectives renovated property and interface that allows the Project Developer of a high quality, green renovation. to quickly review eligible solutions for 2. Additional products, materials, their project and to contact the solution provider for further information. technologies, and services desired to be utilized by the Project Developer that must be evaluated by competent experts to determine if it is appropriate as a “green” solution.

16 Green Renovation Loan Eligibility Process

Project Green Solutions Developer ▪ Doors & Windows ▪ Paints RoGBC ▪ Flooring Assessor ▪ Ceramics ▪ Insulation ▪ Heating, Cooling & Ventilation Auditor* ▪ Green energy Green ▪ Other green solutions Solutions Selector *If necessary Tool

Seeking Use of unlisted pre-approved solution materials use

RoGBC approval

Renovation Plans

RoGBC Help Desk Loan offers guidance Application for Renovation Process projects

Bank

Renovation Construction

Completed Renovation

17 Risks & Mitigating Factors

Lack of demand for housing, green or Furthermore, close participation of the solution We have reached a critical point otherwise providers contributing to the pilot projects where the risk of “business ensures that issues will be resolved quickly. as usual” with respect to This is related to the general state of Lastly, the Green Mortgage requirements to the market and not the Green Mortgage share ongoing energy performance on other financing new homes introduces program. A Green Homes certified poject operational data will provide continuous significant future risk compared feedback to the construction industry should, ceteris paribus, have a higher to instituting changes that improving the required skills to introduce best- demand than regular buildings in every improve the performance of the market situation; a fact demonstrated by in-class green solutions. strong sales of the first generation of gr een residential projects regarding residential projects. energy use, resource use and Falling energy prices construction quality. There is a Overestimation of the energy efficiency Despite persistent macroeconomic significant opportunity to pre- savings by the certified audiors challenges, energy prices and energy empt the impending challenges scarcity are predicted to go substantially by participating in a sensible higher. An increasing willingness of the EU The Green Homes certification pocess is and conservative approach to carefully constructed to ensure planned and local government to “price carbon” and reducing risk in the housing objectives deliver expected results. The tax inefficient behaviour greatly reduces energy auditor and the Certifier assessor the likelihood that the energy price to the market via greener construction must be engaged at the earliest possible end consumer will decrease. Dramatic approaches. moment to instruct the design team on technological advances in “green” energy likely outcomes of their decisions. This might reduce long term prices but the wide- risk is also mitigated by choosing energy spread, positive economic benefits that auditors for the project who share the would accompany this welcome scenario goals of estimating and realizing energy should clearly outweigh the smaller savings rather than “checking the box” of an differential in expected financial savings administrative task. from energy efficiency measures.

Lower than expected performance of energy savings equipment and installations delivering less energy savings

The Green Homes program’s requirements to achieve a top energy score provide strong assurance that the building will perform to expectations. Critical components of green homes ranging from effective insulation and high efficiency Heating, Ventilating, and Air Conditioning (HVAC) equipment must function correctly to achieve the promised economic performance necessary to reduce mortgage default risk.

Solutions recommended for the program have been thoroughly researched, implemented elsewhere with clear results and, in the case of most systems, backed by manufacturers’ guarantees.

18 Key Policy Initiatives: Green Residential Real Estate Finance

Key Policy Initiatives: Green Residential Real Estate Finance Central banks, supranational regulators, bank type. Instead, it must be viewed in a multi- development of a sustainable financial sector supervisors and the global financial sector disciplinary paradigm as it is embedded in and innovation in sustainable financial have recognized the nexus between every traditional risk-type including credit, instruments. environmental and systemic risk and joined market, liquidity, funding, underwriting, forces to create a sustainable finance reputational and strategic risks8,9,10. The SMARTER Green Homes Green Mortgage ecosystem that supports the transition to a While the financial markets have been able to thriving and regenerative global economy6,7. Program provides financial institutions the quantify environmental risk through a wherewithal to capture the scale of As there's increasing convergence on 'greenium' on financial instruments, sustainable residential real development standards for identifying, measuring and environmental risk must be addressed at the projects demanded by institutional investors analyzing environmental risk there's initial stages of a real estate project to avoid along with robust environmental increased ability to minimize such risk. the risk of stranded-assets on a portfolio- performance data-sets to meet increasingly Environmental risks including transition and level as well as addressed on a firm-wide high expectations from the regulatory and physical risk translate directly into increased basis to avoid strategic and reputational supervisory arena - while providing citizens financial risk. With increased focus on the risk¹¹. with environmentally performant homes and relationship between environmental and Global policy makers are adopting providing society with an increasingly financial risk by the financial sector, the transformative agendas to support common sustainable building sector. climate-focused arena and real estate definitions of sustainable economic activities, development industry, environmental risk progress towards a sustainable transition, can no longer be viewed as a discrete risk- mobilization of capital towards sustainability, EU Taxonomy for Sustainable Activities

The EU Taxonomy for Sustainable depicted below (figure 01). The SMARTER Green Homes and Green 12,13,14,15 Activities ('EU Taxonomy') is a EU Taxonomy: Steps for Alignment Mortgage Program provides a suite of classification system under which analytical capabilities for deeper Fig. 01 environmentally sustainable activities are Do no understanding of the environmental Contribute significant Comply with Comply with substanally to one defined to help investors, companies, harm to any minimum technical performance to each stakeholder group or more of the six other environmental social screening necessary for aligning with such initiatives issuers and project promoters navigate the environmental objecves safeguards criteria transition to a low-carbon, resilient, objecve in the policy arena as well top priorities of resource-efficient, and sustainable sustainable real estate credit investors – economy. The EU Taxonomy sets The EU Taxonomy addresses climate and locally, regionally and internationally. performance thresholds ('Technical environmental priorities while serving a Screening Criteria') for economic activities critical role facilitating large-scale capital which make substantial contribution to deployment toward environmentally Residential real estate credit originators, one of six environmental objectives, sustainable activities and enabling investors, guarantors and counterparties including: implementation of the EU Green Deal¹⁶. are becoming increasingly mindful of decarbonization across the building sector • Climate Change Mitigation; The common language of what is and the positive impact it has on property- sustainable will address such policy • Climate Change Adaptation; level financial performance, as well as measures including the EU Action Plan on portfolio-wide risk reduction across first- • Sustainable Use and Protection Financing Sustainable Growth¹⁷ while the order and second-order financial and of Water and Marine Resources; clear definition of sustainable projects will environmental risks²¹. • Transition to a Circular Economy; accelerate capital flows as institutional investors have long sought widely • Pollution Prevention and recognized and reliable definitions as well As the transition towards environmentally Control; and as standardized environmental sustainable activities develops resilience • Protection and Restoration of performance benchmarks¹⁸ for sustainable against climate and environmental shocks Biodiversity and Ecosystems real estate. such a shift will also mitigate systemic risk The EU Taxonomy and EU Green Deal have in the financial sector through facilitating dynamic understanding of Such economic activities must Do No positive implications for Green Homes Solutions Providers, Investor/Developers macroeconomic transmission channels of Significant Harm ('DNSH') to the other five, environmental risk and the integration of where relevant, while also meeting and Financial Institutions in the sustainable real estate arena which environmental risk analysis into financial minimum safeguards (e.g. OECD decision-making. guidelines on Multinational Enterprises encompass the Sustainable Europe and UN Guiding Principles on Business and Investment Plan¹⁹, Renewed Strategy on Human Rights). A summary of the steps Sustainable Finance and Large-Scale that economic activity must go through to Renovation of Existing Buildings²⁰. be considered EU Taxonomy-aligned are

19 Financial Market Participants: those ESG, Climate-centric, specialized real estate In order to be EU Taxonomy aligned, a real required to report under the EU energy efficiency investors and mainstream estate project must meet technical Taxonomy by 31 December 2021 with institutional investors are provided with screening criteria for economic activities financial products offered within the common sets of environmental that can make a substantial contribution to EU and the UK will be required to state: performance data, metrics and thresholds climate change mitigation or adaptation which provide insight into both the while avoiding harm to four other • How and to what extent they environmental and economic sustainability environmental objectives, including: have used the Taxonomy in as well as a sound basis for large-scale determining the • Sustainable use and protection of capital deployment and the design of water and marine resources; sustainability of the financial instruments, real estate finance underlying investments; product-sets, bond issuance programs and • Transition to a circular economy; structured finance vehicles that ensure • Environmental Objectives: • Pollution prevention control; and responsible development of a sustainable to what environmental • Protection and restoration of capital market sector. objective(s) the investments biodiversity and ecosystems. contribute; and Such environmental performance data assists Financial Institutions, The EU Taxonomy considers four economic • Proportion of Underlying Investor/Developers and Green Home activities in the building sector, including: Investments that are Solution Providers access sustainable real construction of new buildings, renovation Taxonomy-aligned: estate capital markets to improve the of existing buildings, individual renovation expressed as a percentage of environmental performance of new measures and the acquisition and construction and renovation projects while the investment, fund or ownership of buildings. portfolio, including details on identifying environmentally sustainable real estate acquisition opportunities - thereby the respective proportions of A description of how, and to what extent, growing low-carbon sectors while enabling and transition these four economic activities are decarbonizing high-carbon sectors. activities. associated with Taxonomy-aligned activities Sustainability-Related Disclosures in provides valuable information for the Financial Services Sector ('SDR'): The SMARTER Green Homes Green investor/developers delivering new construction of green homes, banks Disclosure against the Taxonomy forms Mortgage Program provides a multi- originating green mortgages, investors part of a broader sustainability-related stakeholder, multi-disciplinary approach that facilitates cross-industry, cross-border, allocating capital towards green residential disclosure regime in conjunction with real estate credit and for analyzing the the SDR which includes pre- cross-project development phase, and cross-financial sector knowledge sharing in transition plans, environmental contractual, website and periodic a mutually-inclusive, self-reinforcing, performance and strategies of Green reporting obligations. circular, and regenerative format - thereby Homes Solutions Providers. Non-Financial Reporting Directive: creating community and regional-level ('NFRD'): Companies mandated to economic development while attracting The financial metrics to describe how these disclose against the Taxonomy are also international capital to sustainable projects. four economic activities are associated with Taxonomy-aligned activities are depicted required to comply with the NFRD. below (Figure 02).

Fig. 02 Real Estate: Four Economic Activities Construction of Renovation of Existing Individual Renovation Acquisition and New Buildings Buildings Measures Ownership of Buildings Development capex and 30% vs Baseline Relative Single Technical Interventions: Purchase of buildings, building equity/revenues of Improvement Capex and equity/revenues of ownership and improvement Investor/Developers GHIP from an asset perspective: Comprehensive Renovation: acquisition capex and capex and equity/revenues of Services Functional to Building equity/revenues of the Investor/Developers Performance Improvement: Investor/Owner Capex and equities/revenues of GHIP

20 Key principles the EU Taxonomy considers for the building sector are outlined below (Figure 03)²².

Fig. 03 Key Principles Transitional approach based on energy related metrics

Operational phase current focus is potential addition of metrics covering building materials’ footprint, construction and end of life phases of the life cycle.

Focus on “Modelized” Performances vs Measured (via metering) Top 15% of Local Building Stock: EU policy instruments (NZEB and EPC) chosen as proxies for Thresholds and Metrics considered as a proxy for the target level of ambition of a minimal benchmark of the top 15% of the local stock as a representative of the best level of energy and resource efficiency. Minimum levels of ambition will be progressively strengthened to reach net zero carbon neutrality by 2050. The technical screening criteria and establishing thresholds that must The technical screening criteria for the evaluates whether these activities be met in conjunction with DNSH Construction of New Buildings are 'significantly contribute' to climate criteria for a real estate project to be depicted below (Figure 04). change mitigation and adaptation by considered 'EU Taxonomy-aligned'. setting out principles, defining metrics,

Fig. 04 SMARTER: EU Taxonomy: Technical Screening Criteria: Mitigation: Construction of New Buildings Technical Screening Criteria Mitigation: Principle Mitigation: Metric + Threshold Mitigation: Rationale

The construction of new buildings designed to The metric is Primary Energy Demand (PED): the annual primary energy demand The establishment of a relative threshold in the form of a minimise energy use and carbon emissions associated with regulated energy use during the operational phase of the building percentage improvement on NZEB requirements is justified by throughout the lifecycle can make a substantial life-cycle (i.e. “module B6” according to EN 15978), calculated ex-ante according to the fact that from 2021 new constructions will be mandated by contribution to climate change mitigation by saving the national methodologies for asset design assessment, or as defined in the set of national/regional building regulations to comply the NZEB a large part of the carbon emissions that would be standards ISO 52000, expressed as kWh/m2 per year. requirements. This implies that the taxonomy must require better associated with conventionally designed buildings. levels of performance than NZEB, or all new contructions would The threshold is based on “near-zero energy building” (NZEB) requirements, which be automatically eligible, which would fail to direct finance are defined in national regulation implementing the EPBD and are mandatory towards more sustainable solutions and run the risk of diverting across EU Member States from 2021. To be eligible, the net primary energy demand finance from the renovation of existing buildings. Since NZEB of the new construction must be al least 20% lower that the primary energy requirements correspond to different levels of performance demand resulting from the relevant NZEB requirements. This reduction can be met across EU Member States, the use of a percentage improvement, through a direct decrease of the primary energy demand via a more efficient rather than asbolute figures, allows a degree of proportionality to design or by offsetting with on-site and off-site renewable generation or a be applied: in Member States where NZEB requirements result in combination of both strategies. Off-site energy generation mustbe limited to a comparatively low PED, the energy reduction necessary to district heating, cooling systems and local renewableenergy sources. The achieve the 20% improvement is smaller than in Member States methodology used for the measurement of floor area must be declared by referring where NZEB requirements result in a comparatively high primary to the catedories established by the International Property Measuremenet Standards energy demand.

The eight environmental categories of the Technical Screening Criteria and DNSH assessment were cross-evaluated against SMARTER Assessment Criteria were Assessment for each building-related each of the EU Taxonomy's six measured against the six environmental economic activity addressed by the EU environmental objectives to demonstrate objectives of the EU Taxonomy. Taxonomy is depicted below (Figure 05). the scale and scope of EU Taxonomy- alignment. The degree to which the SMARTER Each category of SMARTER Assessment Assessment Criteria meets or exceeds the Criteria and each of the 57 points of

SMARTER FINANCE FOR FAMILIES: ASSESSMENT CRITERIA FOR GREEN HOMES CERTIFIED PROJECTS X EU TAXONOMY FOR SUSTAINABLE ACTIVITIES: CROSS-EVALUATION

Environmental Fig. 05 Leadership Ongoing Performance Site & Location Water Efficiency Materials and Resources

Human Health & Technical screening Do no significant harm Technical screening Do no significant harm Technical screening Do no significant harm Technical screening Do no significant harm Technical screening Do no significant harm Wellness criteria assessment criteria assessment criteria assessment criteria assessment criteria assessment BUILDING RENOVATION Energy Optimisation CONSTRUCTION OF NEW BUILDINGS BUILDING RENOVATION ACQUISITION AND OWNERSHIP OF BUILDINGS CLIMATE CHANGE MITIGATION ACTIVITIES CLIMATE CHANGE ADAPTATION ACTIVITIES Innovation EU TAXONOMY FOR SUSTAINABLE ACTIVITIES

21 Do No Significant Harm (DNSH) Assessment | Summary A summary of the main potential for significant harm to the • SMARTER surpasses this DNSH Assessment adhesives, and sealants as well as decreased other environmental objectives associated with the Criterion through front-end water efficiency dependence of non-renewable materials. construction of new buildings is determined by factors measures and required monitoring, benchmarking identified by the Technical Expert Group on Sustainable and analysis of property-level water efficiency data. • Presence of hazardous contaminants in the soil of Finance are outlined below along with corresponding the building site. measures required by the SMARTER Assessment Criteria • Landfill and/or incineration of construction and which address those areas. demolition waste that could be otherwise • SMARTER meets this DNSH Assessment Criterion recycled/reused. through measures to encourage safe reuse of • Lack of resistance to extreme weather events former industrial or contaminated sites to (including flooding), and lack of resilience to • SMARTER meets this DNSH Assessment Criterion decontaminate and increase their ecological value future temperature increases in terms of internal through implementing waste prevention and the value of the community. comfort conditions. measures and strategies and requirements for reuse of construction materials on site or sorting for • Inappropriate building location: impacts on • SMARTER surpasses this DNSH Assessment recycling. ecosystems if built on greenfield and especially if Criterion largely through construction quality, in a conservation area or high biodiversity value standards for building materials, mechanical • Presence of asbestos and/or substances of very area. system and sub-system performance, post- high concern in the building materials. occupancy considerations and leading practice • SMARTER surpasses this DNSH Assessment environmental performance innovations. • SMARTER meets this DNSH Assessment Criterion Criterion by strictly forbidding Development in by requiring reductions in the concentrations of National Parks and sensitive areas such as parkland, • Excessive water consumption due to inefficient chemical contaminants that can damage air floodplain, wetlands, water bodies consistent with water appliances. quality, human health, productivity, and the terms of Natura 2000 legislation. environment – this applies to all paints, coatings,

One of the foremost challenges of the and transparent manner, thereby removing deployment of capital toward banking sector in assessing alignment with complexity and uncertainty that has sustainable activities the EU Taxonomy has been meeting the Do inhibited capital flows towards high No Significant Harm (DNSH) Criteria standards of environmental performance. according to an assessment jointly As the international capital markets have Notably, the evolution in the design, conducted by United Nation Environment shown increasingly higher demand for construction, and operation of residential Programme Finance Initiative and the environmentally performant buildings and real estate has progressed along with the European Banking Federation²³ with consistent standards by which to assess analytical expertise and technical participation by BNP Paribas, Caixabank that performance, the EU Taxonomy sophistication necessary to measure, and Credit Suisse. provides a common classification system analyze and report environmental for evaluating sustainable real estate performance setting out a clear pathway projects. toward alignment with EU Taxonomy. The SMARTER Assessment Criteria which is a foundational element of the Green Homes Green Mortgage Programs Through providing appropriate definitions The SMARTER Assessment Criteria provides comprehensively addresses the full scope to citizens, developers, financial a sound basis for translating residential of DNSH criteria. institutions, institutional investors and building performance directly into throughout the value chain of the real parameters necessary for EU Taxonomy estate industry regarding which real estate alignment. Several key developments for As the EU Taxonomy for Sustainable activities can be considered the EU Taxonomy expected going forward Activities addresses key environmental, environmentally sustainable, it creates: outlined below (Figure 06). economic and strategic priorities that are essential to transitioning toward a low • certainty for investors and carbon society on a macro level, the protection against Fig. 06 EU Taxonomy: Upcoming sustainability of the building sector is greenwashing, Developments for Residential Buildings addressed directly and specifically. • a pathway for the industry to Absolute thresholds for primary operational energy make an orderly transition to a low-carbon economy, Operational GHG emissions Accordingly, the EU Taxonomy directs Embodied GHG emissions (LCA based) capital flows toward sustainable real estate • market fragmentation and Integration of GHG emissions metrics projects by providing a classification addresses disparate standards with a common framework that Additional criteria covering operational management of system for assessing environmental buildings performance in a consistent, comparable allows for large-scale

22 A comprehensive approach to identify substantial contribution to climate change mitigation is outlined below (Figure 07).

Fig. 07 EU Taxonomy Decision Tree: Identification of Substantial Contribution to Mitigation Activities Greening Of Greening By How is Substantial Activities that are already low Activities that contribute to a Enabling other activities to achieve emissions reductions Contribution Defined? carbon transiton to a zero net emissions economy in 2050 Who Can Perform This Entity performing the already low Entity performing the activity to Entity performing the activity Entity performing the enabling Activity? carbon activity contribute to transition where the enabling activity is activity (as a service or product) implemented What Could Count Revenues or expenditures linked with activities that meet the Expenditure linked to Revenues or expenditures linked Under the EU technical screening criteria implementing the enabling to activities that meet the Taxonomy? activity that meets that technical technical screening criteria screening criteria Which Financial Equity (revenues derived from EU Taxonomy-aligned activities) Debt financing (Use-of-Proceeds) Equity (revenues derived from the Instruments Can Be linked to the implementation of EU Taxonomy-aligned activities Used Debt financing (Use-of-Proceeds) to bring activities in alingment with tbe enabling activity or asset the EU Taxonomy Debt financing (Use-of-Proceeds) linked to the implementation of tbe enabling activity or asset

EU Taxonomy alignment provides the basis Taxonomy, leading practice sustainable real markets as citizens, developers, banks, and for the design of a Green Bond Framework estate design, construction, and operation institutional investors are increasingly and issuance of an 'EU Green Bond' under principles are captured which can be seen gravitating towards sustainability. the EU Green Bond Standard24,25 ('EU GBS'). as reliable indicators of a high degree of environmental performance and serve an While the SMARTER Green Home Green important role in environmental credential Mortgage program aligns with EU signaling to regional and international

Sustainable Real Estate Capital Markets Environment: Sustainable Covered Bonds, Residential Mortgage-Backed Securities ('RMBS'), Sukuks, Pfandbriefs and Other Financial Instruments

Covered bond investors have indicated a high ‹ Pricing versus senior unsecured Depicted below (Figure 05) are issuance level of interest in sustainability as policy and sovereign curve beneficial as trends of Green Residential Mortgage- makers, central banks and regulators Mortgage Covered Bond deals Backed Securities ('RMBS') highlighting encourage greener finance while international have priced at a spread of about select issuance from 2016 through 2019. and regional banks develop capabilities to 10bps back of the Sovereign RMBS Green Belem No.1 and Green underwrite and finance sustainable residential Curve, according to Global 26,27 STORM 2016-19 were issued out of real estate projects . Deal specific dynamics Capital²⁸. Portugal and The Netherlands, also drives growth in sustainable covered ‹ Currency swap spreads, asset respectively. bonds, including: quality and ratings make a lower • Lower cost of funding relative to senior beta and lower volatility product unsecured leads to the creation of providing investors with greater marketable instruments with lower ability to participate during volatility and more reliability, liquidity, periods of volatility. diversified funding options and a • Covered bond funding can be useful for diversified investor base which includes riding out volatility and periods where central banks as well as investment grade senior unsecured spreads are under covered bond investors. pressure. Issuance can be possible during times when senior unsecured issuance is difficult.

23 Depicted below (Figure 09) are issuance Sustainable Renovation Loan Dynamics trends of Green Residential Mortgage- Backed Securities ('RMBS') highlighting select • Many European banks have recently • Green renovation loans could become issuance from 2016 through 2019. made efforts to provide new green eligible for inclusion in green cover mortgage financing that is specifically pools with sufficient improvement in RMBS Green Belem No.1 and Green STORM designed to fund home improvements the energy performance of a home 2016-19 were issued out of Portugal and The to enhance the energy efficiency of demonstrated through, for example, Netherlands, respectively. buildings and reduce their carbon an upgraded energy performance footprints. certification.

Fig. 08 Fig. 09 Select Green RMBS Mortgage Origination Amount Since 2016

€bn Netherlands

2

1 Portugal

0 RMBS GBLEM BELEM No.1 Green STORM 2016 - 19 B.V.

The EU Green Bond Standard ('EU GBS') Bond Principles³¹, and Sustainability- in consultation with a broad constituency is designed to be relevant and accessible Linked Loan Principles³² developed by the group leveraging expertise from the to issuers located both within and outside International Capital Market Association environmental arena, real estate sector, the EU. The EU GBS builds on market- ('ICMA'). The principles developed by the and financial market landscape34,35,36,37,38,39. leading practices such as the Suggested European Commission Technical Expert Impact Reporting Metrics for Green Group on Sustainable Finance further Building Projects²⁹, Green Bond practices set forth by ICMA and Climate Principles³⁰ ('GPB'), Sustainability-Linked Bonds Initiative³³ which were developed

Green Real Estate Policy Landscape: EU Green Bond Standards Fig. 10 The EU GBS is designed to be Publication of Green Bond Documents and verified by Approval of External relevant and accessible to issuers Framework approved external verifiers Verifiers located in the EU as well as to issuers located outside the EU. •Issuers green bond strategy and alignment with the EU Taxonomy Annual Allocation Reports Final Allocation Report Builds on market best practices such as the Green Bond Principles (GPB) •Description of types of green • Confirmed alignment with the developed by the International project categories to be financed EU GBS IMPACT REPORT Capital Market Association (ICMA) • Breakdown of allocated Impact reporting at •Description of methodology and amounts per project or least once at full The proposed EU GBS model sets out process regarding allocation portfolio allocation, or annually four core components, including: and impact reporting • Geographical distribution of projects i. Alignment of the use -of-proceeds with the EU Taxonomy ii. Content of a Green Bond Framework to be produced by the issuer iii. Required Allocation and Impact Reporting Before or At Issuance From gradual to full allocation iv. Requirements for external verification by an approved SMARTER Assessment Criteria addresses those areas in highlighted in green verifier

SMARTER CERTIFICATION CRITERIA

24 The National Bank of Romania joins The Network of Central Banks and Supervisors for Greening the Financial System The Network for Greening the Financial System (NGFS): A Global Sustainable (NGFS) Finance Initiative Among Financial Institutions, Central Banks, Bank Supervisors and Environmental Experts In October of 2020, The National Bank of Romania (NBR) became a formal member The Network for Greening the Financial risk presented by climate change, facilitate of the Network for Green the Financial System membership encompasses all of the large-scale capital deployment toward low- System as they move towards addressing world's systemically important banks with carbon sectors of the economy thereby the nexus between environmental and 83 Central Banks and 13 observers working driving environmentally and economically financial risks with respect to top global together to meet the goals of the Paris sustainable development. climate-related policy initiatives. Agreement, address the systemic financial They join over 80 central banks and Recent Initiatives of the NGFS: supervisors in improve the analysis, management and reduction of climate- Central Bank Preparedness for Climate Change related and environmental risk in the A review of 107 central banks to assess view climate change in the scope of issues banking sector. The NBR is moving preparedness for climate change considers considered in their operational framework;. toward alignment and application of their institutional frameworks and features Central banks are mainly incentivized to specific climate risk analysis tools within of their balance sheet. address climate change as part of a the financial stability policy framework mitigation strategy to curb the impact of organized in conjunction with the IMF 5. A formal survey concerning climate change climate-related risks on their balance preparedness was conducted where 26 sheets. central banks, representing 51 countries showed increasing and shared awareness of By taking adoptive measures,they also climate-related risks facing the financial support a smooth transition to a low- system. carbon economy and a smooth monetary transition over the long-term. Finally, The NGFS indicates that all central banks central banks see international coordination find climate change to be a challenge. as key to effectively integrating climate- Additional key observations from the related risks into their balance sheets. survey indicate: a majority of central banks

Climate Scenario Analysis for Financial Institutions

The World Economic Forum cites climate emerging discipline of climate scenario finance vehicles as well as underwriting change as the biggest global risk in their 15th analysis. These open-source analytical mortgage insurance, guarantees and credit Global Risks Report⁴⁰ published in January capabilities develop further understanding of enhancement. 2020. environmental and climate-related risks as The environmental performance data well as their impact on the financial system Additionally, five of the top ten global risks generated by the SMARTER Assessment and complement practices emerging out of by both impact and by likelihood were Criteria helps environmental, economic and the supervisory community and industry environmental, including: extreme weather, financial analysts understand how the practice44,45. climate action failure, natural disaster, environmental profile of a green certified biodiversity loss and human-made The NGFS suite of climate scenario analytics home and related mortgage or renovation environmental disasters. leverage Integrated Assessment Models and loan directly reduces key categories and sub- Computable General Equilibrium Models to categories of climate risk, including: Central banks, supervisors, financial explore the risks that could crystallize in institutions and environmental experts have • Transition Risk: The SMARTER Green different possible futures⁴⁶. joined forces to address this through the Homes and Green Mortgage program integration of climate risk analysis and will reduce the transition risk for a evolving scenario analysis capabilities in the The SMARTER Assessment Criteria provides developer, bank and institutional financial sector. key components of environmental investor who are facing increasing Accordingly, the NGFS has developed performance data to dynamically integrate higher regulatory standards and supervisory expectations around climate the essential elements which are important industry practice as well as higher risks as well as a suite of climate scenario to each respective stakeholder group expectations attributable to their own practices and climate stress-tests to address performing climate scenario analysis and investor base who are increasingly macro-financial systemic risk and utilizing the analytics for eco-efficient real inclined towards high standards of idiosyncratic financial institution estate finance decision-making, including: environmental performance. Subsets of solvency41,42,43. They have deployed a large-scale capital deployment; portfolio Transition Risk which a SMARTER Green preliminary array of datasets, models and optimization; direct-lending; mortgage Home and Green Mortgage Program tools in conjunction with guidance on the origination and issuance of structured- include:

25 ‹ Technology Development: The green certified homes by providing an performance data necessary for large- SMARTER Green Homes and Green environmentally performant, eco- scale investments. efficient home to the homebuyer; and Mortgage program enables the ‹ Stranded Assets: The SMARTER Green enabling developers to design and monitoring, analysis and reporting of Homes and Green Mortgage program offer such homes to the market; critical environmental performance has a direct, positive and immediate enabling banks to provide financing data as well as the execution of impact towards mitigating the risk of which is aligned to characteristics of sophisticated analytical exercises such stranded assets due to leading practice the home rather than standard as climate scenario analysis which methodology which considers the mortgage financing practices. This evaluates and assesses a financial current regulatory environment, enabling institutional investors to have institutions exposure under a range of prospective regulatory environment a more sophisticated understanding of possible states of the world. and industry leading practice. the green home attributes and green ‹ Consumer Preferences: The SMARTER mortgage characteristics thereby Green Homes and Green Mortgage providing them with consistent and program addresses the exceedingly comparable environmental pronounced consumer demand for

SMARTER Certification: Dynamic Integration of Residential Environmental Performance Data into Environmental and Financial Risk Analysis Fig. 11

Climate Risk Climate Risk Financial Risks

Certification Criteria Transition Risk Micro: Business Credit Risk F

•Environmental Leadership • Environmental Policy + • Stranded Assets • Default Risk inancial S •Ongoing Performance Regulation • Changing Demand • Default Timing Curve •Site + Location • Technology Development • Legal liability from failure to • Loss severity •Water Efficiency • Consumer Preferences mitigate or adapt Market Risk •Materials + Resources • Repricing of green risk y •Human health + Wellness Micro: Individual factors st Physical Risks Pricing differential: green em C •Energy Optimization • Loss of income from • •Innovation vs conventional Chronic weather, health or labor ontag • Temperature, precipitation, market conditions Underwriting Risk agricultural productivity, sea • Low carbon policies • Primary mortgage affecting property valuations insurance gap levels ion Green Mortgage • Credit enhancement •Financial Parameters Acute Macro Liquidity Risk •Risk Parameters • Heatwaves, floods, cyclones • Capital depreciation • Refinancing risk and wildfires • Shifts in prices • Funding risk • Productivity changes Operational Risk • International trade • Environmental performance data

Climate + Economy Feedback Effects Economy+ Financial System Feedback Effects

The Network for Greening the Financial • Orderly: Early, ambitious action with significant global warming System sent out three representative toward a net zero CO2 emissions and, as a result, strongly scenarios, which show the range of low to economy; 4% GDP loss projected increased exposure to physical high risk outcomes. by 2100 given the substantial risks. 25% GDP loss projected by These scenarios demonstrate the investment necessary for a 2100 which could vary based on relationship between the strength of transition to a carbon-neutral the risks which materialize and response and transition pathway. economy; the scope of low probability and high magnitude events which The three representative scenarios are then • Disorderly: Action that's late, could unfold. broken down into 8 scenarios below, disruptive, sudden and/or computed by 6 different types of models, unanticipated; capturing 543 variables and spanning 66 • Hot House World: Limited action regions. that leads to a hot house world

26 SMARTER Green Homes and Green Mortgages and Climate Scenario Analysis: Idiosyncratic Environmental Performance Integration

Robust environmental performance data at (Figure 12) is Final Energy Use by Buildings performance data provided by SMARTER the most granular level will be essential to projected across eight scenarios utilizing an Assessment Criteria will be essential to performing robust climate scenario analysis NGFS Climate Model⁴⁷. The projection spans executing the exercise as well as additional and demonstrating sound risk management the 2020-2050 time-horizon covering the comparative analytics like green vs practices which are demanded by EU 28 geographical region. Building energy conventional performance. institutional investors and increasingly use is essential component of climate required by regulators. Depicted below scenario analysis. The environmental

Fig. 12 NGFS: Projected Final Energy Use Buildings: 1 Variable 8 scenarios: EU28 26.0

25.0

24.0

23.0

22.0

21.0

20.0 Immediate 1.5C with Limited CDR (Disorderly, Alt) 19.0

18.0

17.0 2020 2025 2030 2035 2040 2045 2050

Current Policies (Hot House World, Rep) Immediate 1.5C with Limited CDR (Disorderly, Alt) Delayed 2C with CDR (Disorderly, Alt) Immediate 2C with CDR (Orderly, Rep) Delayed 2C with Limited CDR (Disorderly, Rep) Immediate 2C with Limited CDR (Orderly, Alt) Immediate 1.5C with CDR (Orderly, Alt)

Detailed Scenarios

• Current Policies: Hot House World: A • Immediate 1.5⁰C with CDR (Orderly, • Immediate 2⁰C with Limited CDR scenario in which no further climate Alt): A scenario that after limited (Orderly, Alt): A scenario that keeps policies are enacted. overshoot returns warming to below warming below 2°C with only limited • Delayed 2⁰C with CDR (Carbon 1.5°C in 2100 with full availability of availability of CDR Technologies and CDR technologies and immediate immediate introduction of Dioxide Removal) (Disorderly, Alt): A introduction of comprehensive comprehensive emission pricing. scenario in which current country emission pricing. pledges are the guiding principle until • Nationally Determined 2030, and only thereafter • Immediate 1.5⁰C with Limited CDR Contributions (NDCs) (Hot House comprehensive emission pricing is (Orderly, Alt): A scenario that after World, Alt): A scenario in which introduced to keep warming below 2°C limited overshoot returns warming to current country pledges are reached, with full availability of CDR below 1.5°C in 2100 with only limited and comparable ambition is technologies. availability of CDR technologies and maintained thereafter. • Delayed 2⁰C with Limited CDR immediate introduction of comprehensive emission pricing. (Disorderly, Rep): A scenario in which current country pledges are the • Immediate 2⁰C with CDR (Orderly, guiding principle until 2030, and only Rep): A scenario that keeps warming thereafter comprehensive emission below 2°C with full availability of CDR pricing is introduced to keep warming Technologies and immediate below 2°C with only limited availability introduction of comprehensive of CDR technologies. emission pricing.

27 “ESG landscape was not just “the References

Wild West,” but “a jungle within Page 5 ¹ Official Journal of the European Union (22 June 2020). Taxonomy Regulation. EU Taxonomy on Sustainable Activities. Available here. the Wild West. Companies issuing ² EU Technical Expert Group on Sustainable Finance (13 March 2020). Taxonomy Tools. Available here. Mark. Bank of England. (17 April 2019). stocks and bonds are asking for ³ EU Technical Expert Group on Sustainable Finance. (9 March 2020). Technical Report. Taxonomy: Final Report of the Technical Expert Group on Sustainable Finance. Available here. help. That includes figuring out ⁴ EU Technical Expert Group on Sustainable Finance (9 March 2020). Taxonomy Report. Technical Annex: Updated Methodology and Updated Technical Screening Criteria. Available here. how to live up to international ⁵ National Bank of Romania. (2 October 2020). National Bank of Romania has Joined the Network of Central Banks and Supervisors for Greening the reporting standards, such as Financial System (NGFS). Available here. those set by the Task Force on Page 19 ⁶ Carney, Mark. International Monetary Fund. (December 2019). Finance and Development, Vol. 56, No 4. The World Needs a New, Sustainable Climate-Rated Financial Financial System to Stop Runaway Climate Change. Available here. ⁷ Carney, Mark. Bank of England. (17 April 2019). Open Letter on Climate-Related Financial Risks. Available here. Disclosures. ⁸ Network for Greening the Financial System (May 2020). Integrating ClimateRelated and Environmental Risks into Prudential Supervision Available here People on both sides of the table ⁹ Network for Greening the Financial System (10 September 2020) Overview of Environmental Risk Analysis by Financial Institutions Available here ¹⁰ Network for Greening the Financial System (10 September 2020). Occasional Paper. Case Studies of Environmental Risk Analysis Methodologies. are almost equally confused. Available here. Investors increasingly want to ¹¹ Network for Greening the Financial System (10 September 2020). Occasional Paper. Case Studies of Environmental Risk Analysis Methodologies. Available here. know what a company plans to ¹² Official Journal of the European Union (22 June 2020). Taxonomy Regulation. EU Taxonomy on Sustainable Activities. Available here. ¹³ EU Technical Expert Group on Sustainable Finance (13 March 2020). Taxonomy Tools Available here use the proceeds of a bond sale ¹⁴ EU Technical Expert Group on Sustainable Finance. (9 March 2020). Technical Report. Taxonomy: Final Report of the Technical Expert Group on Sustainable Finance. Available here. for, even if it's not a green bond ¹⁵ EU Technical Expert Group on Sustainable Finance (9 March 2020). Taxonomy Report. Technical Annex: Updated Methodology and Updated transaction.” Technical Screening Criteria. Available here. ¹⁶ European Commission. (11 December 2019). The European Green Deal. Available here. ¹⁷ European Commission. (5 August 2020). Renewed Sustainable Finance Strategy and Implementation of the Action Plan on Financing Sustainable Jacob Michaelsen, Growth. Available here. ¹⁸ Cristoforetti, Sebastiano. SMARTER Finance for Families. (14 September 2019). "Recommended Adjustments to Incorporate the Level(s) Framework Sustainable Finance Advisory, and Acceptance of those Adjustments into the EE/Green Homes Certification Tools". Available upon request. ¹⁹ European Commission. (14 January 2020). The European Green Deal Investment Plan and Just Transition Mechanism. Available here. Nordea Investment Banks ²⁰ European Commission. (14 October 2020). A Renovation Wave for Europe: Greening our Buildings, Creating Jobs and Improving Lives. Available here. ²¹ European Commission. (9 December 2019). A Regulation on Sustainability-Related Disclosure in the Financial Services Sector. Available here

Page 21 ²² Nataxis. (1 September 2020). The European Taxonomy of Sustainable Activities. Available here.

Page 22 ²³ United Nations Environment Programme Finance Initiative (UNEP FI). European Banking Federation (EBF). (January 2021). Testing the Application of the EU Taxonomy to Core Banking Products. Available here.

Page 23 ²⁴ European Commission: EU Technical Expert Group on Sustainable Finance. (9 March 2020). Usability Guide for the EU Green Bond Standard. Available here. ²⁵ European Commission: EU Technical Expert Group on Sustainable Finance. (18 June 2019). Proposal for an EU Green Bond Standard. Available here. ²⁶ S&P Global Ratings. (26 June 2018). What's Behind the Rise in Green Covered Bond Issuance. Available here. ²⁷ S&P Global Ratings. (1 December 2020). Sustainable Covered Bonds: Assessing The Impact Of COVID-19. Available here. ²⁸ Global Capital. (31 May 2016). Turkey Enjoys a Warm Welcome to Covered Bond Club. Available here.

Page 24 ²⁹ International Capital Markets Association. (March 2019). The Green Bond Principles Impact Reporting Group: Suggested impact Reporting Metrics for Green Building Projects. Available here. ³⁰ International Capital Markets Association. (June 2020). Green Bond Principles: Voluntary Process Guidelines for Issuing Green Bonds. Available here. ³¹ International Capital Markets Association. (June 2020). Sustainability-Linked Bond Principles. Available here. ³² International Capital Markets Association. (March 2019). Sustainability-Linked Loan Principles. Available here. ³³ Climate Bonds Initiative. (December 2019). Climate Bonds Standard: Version 3.0: International Best Practices for Labelling Green Investments. Available here. ³⁴ International Capital Markets Association. (June 2018). Green Bond Principles/Social Bond Principles Research Initiative: Summary of Investor Survey among GBP/SBP Buy-Side – Members and Observers. Available here. ³⁵ International Capital Markets Association. (August 2019). Summary of the Survey of Green Bond Principles/Social Bond Principles Members – Investors: Evaluation of the Benefits of the Green, Social or Sustainability (GSS) Bond Market. Organization and Strategies Pursued by the Issuers, The Investors, The Underwriters in Relation to the GSS Market. Available here. ³⁶ International Capital Markets Association. (August 2019). Summary of the Survey of Green Bond Principles/Social Bond Principles Members – Investors: Evaluation of the Benefits of the Green, Social or Sustainability (GSS) Bond Market. Organization and Strategies Pursued by the Issuers, The Investors, The Underwriters in Relation to the GSS Market. Available here. ³⁷ International Capital Markets Association. (August 2019). Summary of the Survey of Green Bond Principles/Social Bond Principles Members – Underwriters: Evaluation of the Benefits of the Green, Social or Sustainability (GSS) Bond Market. Organization and Strategies Pursued by the Issuers, The Investors, The Underwriters in Relation to the GSS Market. Available here. ³⁸ International Swaps and Derivatives Association. (January 2021). Overview of ESG Related Derivatives Products and Transactions. Available here. ³⁹ Bloomberg. (1 February 2020). Climate Risks Push Banks Into a Race Against Their Regulators. Available here.

Page 25 ⁴⁰ World Economic Forum. (January 2020). The Global Risks Report 2020. Available here. ⁴¹ Network for Greening the Financial System (June 2020). NGFS Climate Scenarios for Central Banks and Supervisors. Available here. ⁴² Network for Greening the Financial System (June 2020). Guide to Climate Scenario Analysis for Central Banks and Supervisors. Available here. ⁴³ Network for Greening the Financial System (June 2020). Climate Scenario Database. Technical Documentation. Available here. ⁴⁴ Banque De France. (16 July 2020). Climate-Related Scenarios for Financial Stability Assessment: An Application to France. Available here. ⁴⁵ Financial Stability Board (23 November 2020). The Implications of Climate Change for Financial Stability. Available here. ⁴⁶ Network for Greening the Financial System (June 2020). Climate Scenario Database. Technical Documentation. Available here. ⁴⁷ Network for Greening the Financial System. (2020). Climate Scenarios Database. REMIND-MAgPIE 1.7-3.0. Available here

28 About the Administrator of the Program

Romania Green Building Council will host their 9th annual national green building awards. By selection of an expert jury, the annual event recognizes top achievement in the country by project teams, companies, government and educational institutions. Romanian Green Building Council (RoGBC) including the “RoGBC Green Mortgage” is a non- pr o fit, non-politic al a ssociation of program, advocates for local and national the country’s leading green building investors, policy to provide property tax incentives for solution providers and other important green buildings, organizes exemplary green stakeholders endeavouring to deliver the building demonstration projects, provides the market, educational, and legislative conditions multi-disciplinary Green Building Professional necessary to promote high performance education program, holds numerous awareness- construction that is both environmentally- building events on a variety of sustainable responsible and profitable. The RoGBC construction topics, and creates a marketplace endeavours to create an exemplary for green building solutions and projects. development model for the region by ensuring the built environment will not imperil future The Board of Directors are elected each year by generations but rather be a source of safety, the RoGBC membership and represent leaders in health, comfort, innovation, and economic the green construction and real estate industries. opportunity. More information is available at RoGBC.org The organization promotes innovative financial tools for improving Romania’s buildings

Authors and Researchers for the Green Homes certified byRoGBC and Green Mortgage program

STEVEN BORNCAMP MONICA ARDELEANU Ph.D. Lead author of the RoGBC Green Executive Director & Research Homes & Green Mortgage program Director of RoGBC Mr. Borncamp initiated the Green Mortgage Dr. Ardeleanu provided research assistance concept prior to the founding of RoGBC then and quality control for the RoGBC Green contributed the rights to the organization on Mortgage toolkit set of documentation. She the condition it be made available on an “open- has worked with the building community to source” basis to assist financial institutions to indentify partner companies for both the pilot introducing ambitious green building material stage and future expansion of the program. into their decisions and pricing relating to mortgage financing. He is the lead author of the Green Homes certfiied by RoGBC and Green Mortgage toolkit and is supported by the Romania Green Building Council team and external experts engaged as contributors.

Lec. Dr. eng CRISTIANA CROITORU ELENA RASTEI Civil Engineer, energy efficiency, Building sustainability expert, indoor environmental quality and member of the board, RoGBC sustainable building design expert, and Ms. Rastei is the lead developer for the a researcher at the Technical University original and current set of criteria for the of Civil Engineering in Bucharest. assessment of Green Homes-aspiring housing Dr. Croitoru contributed Net Zero Energy projects. She chairs RoGBC’s Certification Building (nZEB), Indoor Air Quality, and Energy & Education Task Groups and is responsible Audit expertise. In addition she contributed for the continuous evolution of the Green building performance knowledge related to Mortgage program’s criteria. Ms. Rastei led the financial modeling of sample Green a group of 30 multi-disciplinary building Homes projects and provided input into the experts to review the Certification criteria. criteria of the Green Homes aspiring housing projects.

29 Specialists who contributed mentioned in alphabetical order International Leadership of the SMARTER Finance for Families Eng. Dorin Beu Ph.D | Reader Technical University of Cluj-Napoca | Manager of Lighting initiative Engineering Laboratory | President of Romanian National Lighting Committee. Steven Borncamp Andrei Botis | Member, Royal Institute of Chartered Surveyors) | CEO NAI Romania & Moldova SMARTER Finance for Families Project Director

Eng. Sebastiano Cristoforetti Ph.D | Managing Director at CRISCON | Member of the Policy Task Johanna Varghese

Force of the European Regional Network of the World Green Building Council Irish Green Building Council Communications & Awareness Building Alexandra Cucos (Dinu) Ph.D | Head of Radon Laboratory „Constantin Cosma”-LiRaCC at Babes -Bolyai University. Babes-Bolyai University Babeș-Bolyai University Camilo Paez Université Libre de Bruxelles Lec. Ing. Angel Dogeanu Ph.D. | BREEAM AP | Energy Auditor Research & Data Structuring

Eng. Eugen Goldhammer | Energy Auditor | Thermography Specialist Grade 1 | ISO14001| Iva Svobodová People In Need EGEEA Design SRL Green Mortgage / Green Renovation Loans Solutions for Energy Poverty Mitigation Arh. Doru Hendea | Head Arhitect | Sustainability Consultant | Ecoproiect Merete Villum Pedersen Biolog Oriana Irimia Ph.D | Climate Change Programs Coordinator, Zero Waste România Copenhagen Centre on Energy Efficiency, Danish Technical University Eng. Călin Jantă, PM | Construction Site Management, Ausbau Quality Assurance & Increasing Institutional Financing

Eng. Alexandru Mocanu | Project Manager Consultant at Sentient | LEED Aristeidis Tsakiris Copenhagen Centre on Energy Efficiency, Eng. Ștefan Munteanu | Auditor Energetic & Consultant Conformare Energetica la Standard de Danish Technical University Casa Pasiva/NZEB/AZEB/Green Homes | SC CIVILIS SRL Knowledge Management System

Sinziana (Frangeti) Pardhan | Managing Director Romania at P3 Logistic Parks John Fingleton Irish Green Building Council Alignment with CEN Standards Eng.Horia Petran Ph.D. | Institutul Național de Cercetare-Dezvoltare în Construcții, Urbanism și Dezvoltare Teritorială Durabilă „URBAN-INCERC” Daniel Butucel / Jeff Colley GreenHomes.Solutions Eng. Dragoș Riți | Head of Construction Services Erste Group Immorent | Managing Director Premium Tech Team PTT Duygu Erten Ph.D. dott. Eng. Sebastiano Cristoforetti Eng. Cătălin Sima Ph.D. | Commissioning Specialist, Green Building Consulting Level(s) Guidance and Implementation

Eng. Laurențiu Tăcutu Ph.D. | Qualied Acoustics Technician Ted Kronmiller Green Finance & Green Homes Investment Platform Arh. Serban Tiganas Ph.D | Secretar General, Uniunea Internațională a Arhitecților (UIA)

RoGBC support team:

Arh. Teodora Albu

Arh. Anca Bolohan

Arh. Isabela Manu

Gabriela Mindru

Eng. Mihaela Nicolau

30 Frequently asked questions

What are the first seps for a Over time indicates we will see far more Is the Green Homes certification the residential investor/developer weight from financial institutions on the only way to be eligible for a Green interested in qualifying their project energy and green performance of the Mortgage? for a Green Mortgage program? home. For which they underwrite given The program administrators believe their these characteristics which makes them It is important to contact the Certifier at the Green Homes certification pogram is the more desirable to originate and hold in a earliest possible point of the development most cost effective and relevant method portoflio given favorable valuation and to assess green performance and the process. Given the importance of site risk-adjusted return dynamics given these resulting beneficial financial profile of homes. location, it makes sense to fully understand characteristics which makes them more The Certifier does not, however, want to a green approach in establishing the location desirable to originate and hold in a of your project before purchasing land. portoflio given favorable valuation and create undue administrative burdens or The “Pre-Certification review” determines if it risk-adjusted return dynamics. costs on residential investors/developers is feasible to expect certification as a Geen who may wish to pursue another recognized Home subject to the planned approach of Furthermore, the European Commission’s green home certification. Therefore, with the investor/developer. The "Pre-Certification DG Energy supported “Energy Efficiency prior consultation with the Certifier and provides guidance about the necessary steps Financial Institutions Group” (see EEFIG.eu) partner banks of the Green Mortgage to achieve certification. who have been actively exploring methods program, a project can be qualified or to remove barriers to long-term energy significantly reduced costs by recognizing What has prevented Green efficiency finance. This Green Homes and other certification systems. Mortgages from appearing until Green Mortgage program is now included For example, a developer/investor chooses now? as a Case Study in the EEFIG underwriting to pursue LEED for Homes certification of Loans that reward investments in energy guide for financial intuitions on green the project. The Certifier believes LEED efficiency have existed for a number of finance. “Gold” is a sufficient level of achievement years globally but most were focused to be qualified or a Green Mortgage. The on renovation and specific items (e.g. How is the integrity of the Green Pre-Certification agreement between the windows, HVAC, insulation) rather than a Homes assessment process assured? investor, partner banks and the Certifier would specify that the developer achieve holistic approach necessary for a truly high The mission of the program is to ensure LEED “Gold” certification, accomplish a performance, green home. In addition, cost the transformation of the construction reduced list of green criteria not covered by effective and credible methods to assess the and real estate industry toward greater LEED. The Certifier and the investor would homes green performance did not exist in environmental responsibility. To accomplish also agree upon a significantly educed fee most markets; something the Green Homes this, creating and administering a credible – 10 to 20% of the standard certification certification now addresses. In recent years, and effective process to assess and fee plus travel costs if any, for example – financial institutions have begun to create reward only qualified pojects for inclusion to perform a one time, local assessment and implement “Energy Efficient Mortgages” in incentive programs is of paramount of the project to provide assurance to the (or EEMs) with the most active programs importance. The Pre-Certification participating banks of conformity to the being seen in the United States where the Agreement established both the criteria Green Mortgage program goals. Environmental Protection Administration’s and a clear indication of how successful “Energy Star” program for homes was used achievement of the criteria must be to qualify projects. Further progress has achieved. Representatives of partner banks been seen with government-sponsored offering Green Mortgages based on the entities such as the Federal National certification are invited to participate in the Mortgage Association (commonly known certification pocess to see firsthand how as “Fannie Mae”) that purchase mortgages information is verified. from lending banks encouraging incentives for these mortgages. Furthermore, with continued expansion of the program, they will, with input and Conclusive evidence demonstrates strong governance from partner banks, establish correlation between energy efficient homes a separate legal organization with revenue and a reduction in mortgage default risk relative derived only from certification activity to to standard home which is similar in all aspects. administer the Green Homes certification We will see far more consideration of green process. homes and green mortgages by financial institutions over time given they exhibit stronger value over time attributable to higher quality materials and superior design, lower operating cost profile as well as stronger appeal based on characteristics such as favorable air quality, natural light and acoustic conditions.

31 higher home values over time indicates we will see far more weight given from financial References cited in this Toolkit

1. Roberto Quercia, Robert Sahadi, Sarah and approaches rewarded by Energy Star 5. European Commission report, Energy Stellberg, Home Energy Efficiency are included in Green Mortgage criteria; prices and costs in Europe Report and Mortgage Risks (Chapel Hill, NC, each having a strong, positive impact on (Brussels, European Commission, 2019) Center for Community Capital, UNC & building quality and reduced energy costs. Washington, D.C., IMT Institute for Market The program also includes a greater focus Weighted importance of household Transformation, March, 2013) on avoiding toxicity in building materials energy products on household budgets The Green Mortgage program criteria choices which does not impact (or does so was extracted from statistics provided requires a higher level of energy efficiency minimally) on costs for the whole project. by Eurostat. “The Harmonised Index of improvements relative to standard like the Consumer Prices (HICP) is an indicator “Energy Star” homes used in this research. 2. Gary Pivo, The Effect of Sustainability on used for monetary policy decisions and These facts indicate we could expect equal Mortgage Default Prediction and Risk in is calculated in each Member State using or greater relative reductions in energy Multifamily Rental Housing (San Diego, a common methodology.” “The assigned costs from applying green home criteria and Ca, Journal of Sustainable Real Estate weight represents the importance of goods Volume 5, Number 1, 2013) thus similar or greater relative reductions in and services in a country’s consumption mortgage default risk. structure.” 3. Appraisal Institute news, Appraisal Paying energy bills rank high on financial The Energy Star homes used in this research Institute Supports USGBC’s ‘Green’ Home Report Findings (Chicago, IL, Appraisal priorities of households as the energy must achieve energy efficient performance Institute, 2014) companies have effective means of ensuring greater than 15% of the International paying by stopping the supply of essential Energy Conservation Code although 4. LEED in Motion: Residential Report energy. many achieve savings of 20 to 30%. (Washington, D.C.,U.S. Green Building Furthermore, the green building principles Council, 2014 + 2019)

Additional references reviewed

Colin Neagle, Energy Efficiency Linked to Stephen Richardson, What are green about energy efficiency investments and Mortgage Default Risk: Will Lenders Take mortgages & how will they revolutionise likely promote long-term efficiency of the Note? (Berkeley, Ca, Energy Technologies home energy efficiency? (London, Wordl house”. Area, Berkeley Lab, 2018) GBC, 2017) “Investors are increasingly expecting access “A green mortgage offers a way of unlocking Sandra K. Adomatis, Residential Green to buildings’ sustainability data, while additional finance for renovation from Valuation Tools (Chicago, IL, Appraisal research has shown that tenants may be the private sector, bringing a whole new Institute, 2014) willing to spend more for space in buildings group of stakeholders into the campaign that show energy efficiency certification. The for green buildings - mortgage banks… It Julia J. Mundo-Hernández, Julia possibility that lenders may factor energy also puts the topic of energy efficiency and Hernández-Alvarez, Cristina Valerdi- Nochebuena, Jorge Sosa-Oliverulia efficiency into their decision-making is just sustainability front of mind for the building Designing Sustainable and Healthy the latest sign that a strategic approach owner at an important stage in the building’s Homes (European Scientific Journa, to energy management is becoming a life, when typically, decisions about property vol.10, no.20. July 2014) competitive advantage.” renovations may be made.” Lisa B. Ryan (UC Dublin), Mobilising BuildUP Portal Editorial Board, Financing Core Concepts - International investment in energy efficiency: Energy Efficiency in Buildings Overview Performance Measurement and Economic Instruments for low-energy Article (Brussels, Buildup.eu, 2019) Verification Protocol IPMVP buildings (Paris, IEA International Energy Green Mortgages: “The principle is that (Washington, D.C., Efficiency Valuation Agency, 2012) all stakeholders derive a concrete benefit Organization www.evo-world.org, 2016) since lower capital requirements will deliver Xavier Bonnefoy, Inadequate housing a strong incentive for banks to enter the Nikhil Kaza, Roberto Quercia, Robert and health: an overview (Geneva, market and, as a result, drive a broader Sahadi, Home Energy Efficiency and International Journal of Environment and Mortgage Risks: An Extended Abstract Pollution, 30 (3-4), p.411–429, 2007) incentive chain, in which all stakeholders, (San Francisco, Ca, Community including EU citizens, issuers, investors, and Development Investment Review, issue society as a whole will benefit’’ 01, 063-069, 2014) Including the debt-to-income ratio and utilizing energy audits as part of the mortgage underwriting process would help homeowners make informed decisions

32 Appendix 1: Multi-Family Example of assessment criteria for Green Homes certified projects: New Construction & Major Refurbishment, Renovation & Retrofits

18 ENVIRONMENTAL LEADERSHIP A1 Integrated Design Required To optimise the design and construction process, increase environmental performance, and reduce costs by including a wider array of expertise early in the design process. The team members who must be involved in the beginning of the design phase include architects, engineers, green building consultant and/or bio-climatic design specialist (depending on the existing green expertise of the design team), energy modelling, landscape architecture, habitat restoration, and land-use planning experts. A RoGBC advisor will be available as part of the Green Homes certification agreement to help facilitate meetings and design charrettes to ensure optimal project approaches.

A1.1 Education for the Design Team 2 The RoGBC team will conduct workshops for the design team to explain the certification process and green building principles. The design team members will be required to attend a minimum of 3 courses within the Green Building Professional education platform. The cost of these courses is included in the Green Homes certification agreement.

A2 Life Cycle Assessment Required To create benchmarks, to identify and use construction materials with a low environmental impact, including embodied carbon, over the full life cycle of the building. The analyses will be performed by the RoGBC specialist. A2.1 Life Cycle Assessment 1 To create benchmarks, to identify and use construction materials with a low environmental impact, including embodied carbon, over the full life cycle of the building. The analyses will be performed by the RoGBC specialist.

A3 Construction Waste 3 To divert from landfills and incinerators the waste generated fom construction or renovation/ refurbishment. The diversion can be Management Planning achieved by implementing waste prevention measures and strategies, reuse on site, or sorting for recycling. A4 Responsible Construction 3 To reduce pollution and disruption caused by construction activities and to recognise and encourage an environmentally and socially Practices responsible approach to construction site management. A5 Operational Waste Required Above the legislation requirement and in line with the zero waste sorting criteria. Management 1. (Required) To include within the design and construction stage a system for the homeowners to sort inside their home by at least three main categories, including: recyclables, biodegradable, and residual waste. Recyclable materials must include mixed paper, corrugated cardboard, glass, plastics, and metals. 2. (Required) A special outside area must be dedicated to the safe collection, storage, and disposal of the following: batteries, mercury- containing lamps, and electronic waste.

A5.1 Operational Waste 3 3. If the above has been achieved, additional points can be earned for including a composting area or compost tumbler for yard Management - BIOWASTE clippings and kitchen food waste. The owners/tenants shall be provided with composting instructions in the manual referenced in section B2: Education for Homeowner / Ensuring Green Performance.

A6 Commissioning for Supply and 2 To improve construction quality and post-occupancy building performance by eliminating potential installation flaws and optimizing Return Air Flow Testing, the installed systems. The process includes verifying all of the subsystems for mechanical (HVAC), plumbing, and electrical to achieve the Mechanical Ventilation Testing owner’s project requirements and green performance as intended by the building owner and design team. and Low Leakage A6.1 Commissioning for Supply and 4 The process includes verifying the envelope performance. Return Air Flow Testing, Mechanical Ventilation Testing and Low Leakage

ONGOING PERFORMANCE

B1 Transparency and Required To establish a green building performance monitoring, financial benchmarking and to help improve the certification criteria Information Sharing for the future. Homeowners or tenants will share energy and water usage data with RoGBC on an anonymous basis. B1.1 Transparency and 1 To establish a green building performance monitoring, financial benchmarking and to help improve the certification criteria Information Sharing for the future. Homeowners or tenants will share energy and water usage data with RoGBC on an anonymous basis. B2 Education for Homeowner / Required A manual must be created and provided to all new homeowners that inform and educate them about proper Ensuring Green Performance operation of the home in a green and cost-effective manner. This includes ensuring understanding of building systems, household waste management and non-toxic cleaning methods. 25 SITE & LOCATION C1 Sustainable Site Required Development in National Parks and sensitive areas such as parkland, floodplain, wetlands, and water bodies is strictly forbidden.

C2 Compact Development 2 To encourage higher density and compact buildings and reduce environmental impact on the site development.

C3 Smart Development 6 To encourage the safe reuse of former industrial or contaminated sites while decontaminating them and increasing their ecological value and the value of their community. C4 Heat Island Effect Reduction 3 To diminish the heat absorbed by both roof and non-roof structures, to improve energy efficiency and outdoor habitats for humans and wildlife via vegetative or cool roofs, green walls, high Solar Reflectance Index (SRI) pavements, etc. C5 Rainwater Management 2 To reduce the rainwater run off from the existing site by collection and possibly reusing it for the existing landscape.

C6 Reduced Light Pollution 1 To reduce the energy consumption associated with the exterior lighting and reduce nighttime light pollution while increasing the visible night sky access. To improve nighttime visibility. C7 Access to Amenities 5 Easy access to amenities such as Parks, Shopping, Houses of Worship, Fitness Centers, Banks and ATMs, Market stores, Schools, etc. To reduce traffic, fossil fuel use, and air pollution. C8 Alternative Transportation 6 To encourage green transport choices by locating the project near public transportation and through the installation of bike lockers or racks, and close proximity to electric charging stations, pedestrian accessibility, car sharing parking spaces, and community transportation. 18 WATER EFFICIENCY D1 Water Metering Required To support water efficiency efforts by monitoring and benchmarking water use over time. D2 Water Efficient Fixtures 5 To reduce total indoor and outdoor water consumption, thus contributing to a more efficient sustainable water operation activity.

33 D3 Fully Operational 6 To reduce the water consumption by collecting and reusing greywater from the site. Greywater System 7 D4 Water Efficient Landscaping To utilize strategies to minimize or eliminate water usage, reduce maintenance costs while providing enjoyable landscaped areas.

36 MATERIALS & RESOURCES E1 Natural Materials 5 To encourage the use of lower environmantal impact and alternative solutions for mansonry and insulation.

E2 Reclaimed Materials 5 To encourage the use of reclaimed materials (salvaged, refurbished or reused).

E3 Local/Regional 4 To encourage the use of the local production and to use products that were extracted, processed or manufactured locally. Cladding Materials E4 Recycled Content 3 To encourage the use of recycled content materials. E5 Environmentally Required To encourage selection of products that have been extracted or sourced in a responsible manner. Responsible Sources E5.1 Environmentally 3 Use of minimum 10 products with Environmental Product Declartions (EPDs) and/or sustainability certifications recognized at Responsible Sources European/International level such as Cradle to Cradle, Ecolabel etc, FSC, etc.. For the purpose of this requirement, one EPD per category will be considered. Categories: - Wood (permanently installed in the building, eg: doors, floating floor, OSB) - Concrete and / or cement - Steel - Stone and / or aggregates - Materials made of clay - Cardboard bottle - Glass - Plastics, polymers, resins, paint, other chemicals, bituminous - Fiber of animal origin, leather, cellulose fibers - Insulation E5.2 Environmentally 2 To encourage selection of products that have been extracted or sourced in a responsible manner. Responsible Sources E6 Low volatile organic 6 To reduce the health risk of the residents by using low (up to 10 grams per liter VOC) or no VOC by reducing compounds (VOC) concentrations of chemical contaminants that can damage air quality, human health, productivity, and the environment. E7 Fire resistant materials 5 To increase fie safety by using insulation materials that are fire resistant within the A1 and B category according to the Romanian legislation. E8 Renewable materials 3 To decrease dependence of non-renewable materials by using at least 30% in volume of renewables and rapidly renewables such as bamboo wood, cork, cotton (recycled denim), agrifiber, natural linoleum, etc. from the total amount of materials used on site. 12 HUMAN HEALTH & WELLNESS F1 No smoking in the Required To prevent or minimize exposure of building occupants to tobacco smoke. Prohibiting smoking in all common areas of the building. common areas

Required To prevent or minimize exposure of building occupants to indoor radon concentration. Monitoring, controlling and reducing indoor radon F2 Radon safety exposure in all occupied areas of buildings

F3 Formaldehyde, VOC, & Required To encourage superior interior air quality measures are implemented. Particulate testing air testing before home occupancy F4 Acoustic comfort 3 Calculations provided by the architect and confirmation the acousting indicativ C 125/1 - 2013 a Normativului privind acustica în construcții și zone urbane, indicativ C125-2013 was considered. (The norm on acoustics in constructions and urban areas, indicatives)

F5 Biophillic Design 5 To alleviate stress and anxiety while improve the indoor environment and air quality. F6 Urban Farming/ 4 To improve food security, support a local economy, and contribute to social inclusion, Urban Farming and Food Production is encouraged. Food Production This is synergistic with credit A 3: Operational Waste Management and with C4: Heat Island Effect Reduction. It contributes to the greenery of the city along with efficient use of urban waste. ENERGY OPTIMISATION G1 To reduce excessive energy Required improvement in Kwh/sqm/year energy performance compared to the minimum score for achieving an “A” class label in the Romanian use, shift toward low Energy Performance Certificate (EPC) and comply to NZEB performance requirements carbon energy solutions, 20 45% improvement per above improve energy security, 30 60% improvement per above and reduce energy costs. 40 PASSIVEHAUS Standard 10 INNOVATION

H1 Innovative Ideas & Solutions 10 Ideas or Solutions to improve the green performance of the project can be submitted for consideration of awarding of up to 10 points.

TOTAL POSSIBLE POINTS 160 Certified 80-99 Excellent 100-129 Superior 130-160

34 Appendix 2: Single-Family Example of assessment criteria for Green Homes certified projects: New Construction & Major Refurbishment, Renovation & Retrofits

18 ENVIRONMENTAL LEADERSHIP A1 Integrated Design Required To optimise the design and construction process, increase environmental performance, and reduce costs by including a wider array of expertise early in the design process. The team members who must be involved in the beginning of the design phase include architects, engineers, green building consultants and/or bio-climatic design specialists (depending on the existing green expertise of the design team), energy modelling, landscape architecture, habitat restoration, and land-use planning experts. A RoGBC advisor will be available as part of the Green Homes certification agreement to help facilitate meetings and design charrettes to ensure optimal project approaches.

A1.1 Education for the Design Team 2 The RoGBC team will conduct workshops for the design team to explain the certification process and green building principles. The design team members will be required to attend a minimum of 3 courses within the Green Building Professional education platform. The cost of these courses is included in the Green Homes certifcation agreement.

A2 Life Cycle Assessment Required To create benchmarks, to identify and use construction materials with a low environmental impact, including embodied carbon, over the full life cycle of the building. The analyses will be performed by the RoGBC specialist. A2.1 Life Cycle Assessment 2 To create benchmarks, to identify and use construction materials with a low environmental impact, including embodied carbon, over the full life cycle of the building. The analyses will be performed by the RoGBC specialist.

A3 Construction Waste 3 To divert from landfills and incinerators the waste generated fom construction or renovation/ refurbishment. The diversion can be Management Planning achieved by implementing waste prevention measures and strategies, reuse on site, or sorting for recycling. A4 Responsible Construction 3 To reduce pollution and disruption caused by construction activities and to recognise and encourage an environmentally and socially Practices responsible approach to construction site management. A5 Operational Waste Required To encourage resourse efficiency and pollution prevention due to the waste generated by the building ocupants. Management A5.1 Operational Waste 2 Improvement of the existing depeloved site compared with its initial status. Management - BIOWASTE A6 Commissioning for Supply and 2 To improve construction quality and post-occupancy building performance by eliminating potential installation flaws and optimizing Return Air Flow Testing, the installed systems. The process includes verifying all of the subsystems for mechanical (HVAC), plumbing, and electrical to achieve the Mechanical Ventilation Testing owner’s project requirements and green performance as intended by the building owner and design team and Low Leakage

A6.1 Commissioning for Supply and 4 The process includes verifying the envelope performance. Return Air Flow Testing, Mechanical Ventilation Testing and Low Leakage

ONGOING PERFORMANCE

B1 Transparency and Required To establish a green building performance monitoring, financial benchmarking and to help improve the certification criteria or the Information Sharing future, homeowners or tenants will share energy and water usage data with RoGBC on an anonymous basis. B1.1 Transparency and 1 To establish a green home performance monitoring, financial benchmarking and to help improve the certification criteria Information Sharing for the future. Homeowners or tenants will share energy and water usage data with RoGBC on an anonymous basis. B2 Education for Homeowner / Required A manual must be created and provided to all new homeowners that inform and educate them about proper operation of the home in a Ensuring Green Performance green and cost-effective manner.

25 SITE & LOCATION C1 Sustainable Site Required Development in National Parks and sensitive areas such as parkland, floodplain, wetlands, and water bodies is strictly forbidden. C2 Site Ecology and Biodiversity 6 Improvement of the existing development site compared with its initial status.

C3 Heat Island Effect Reduction 3 To diminish the heat absorbed by both roof and non-roof structures, to improve energy efficiency and outdoor habitat for humans and wildlife via vegetative or cool roofs, green walls, high Solar Reflectance Index (SRI) pavements, etc. C4 Rainwater Management 2 To reduce the rainwater run off from the existing site by collection and possibly reuse of it for the existing landscape.

C5 Reduced Light Pollution 1 To reduce the energy consumption associated with the exterior lighting and reduce nighttime light pollution; to increase the visible night sky access and to improve nighttime visibility. C6 Access to Amenities 5 Easy access to amenities such as Parks, Shopping, Houses of Worship, Fitness Centers, Banks and ATMs, Market stores, Schools, etc. To reduce traffic, fossil fuel use, and air pollution. C7 Alternative Transportation 6 To encourage green transport choices by locating the project near public transportation and through the installation of bike lockers or racks, and close proximity to electric charging stations, pedestrian accessibility, car sharing parking spaces, and community transportation. 18 WATER EFFICIENCY D1 Water Metering Required The house is equipped with an individual water meter. D2 Water Efficient Fixtures 5 To reduce total indoor and outdoor water consumption, thus contributing to a more efficient sustainable water operation activity. D3 Fully Operational 7 To reduce the water consumption by collecting and reusing greywater from the site. Greywater System D4 Water Efficient Landscaping 7 To utilize strategies to minimize or eliminate water usage, and reduce maintenance costs while providing enjoyable landscaped areas.

35 36 MATERIALS & RESOURCES E1 Natural Materials 5 To encourage the use of lower environmantal impact and alternative solutions for mansonry and insulation.

E2 Reclaimed Materials 6 To encourage the use of reclaimed material (salvaged, refurbished or reused).

E3 Local/Regional 4 To encourage the use of the local production and to use products that were extracted, processed or manufactured locally. Cladding Materials E4 Recycled Content 3 To encourage the use of recycled content materials. E5 Environmentally Required To encourage selection of products that have been extracted or sourced in a responsible manner. Responsible Sources E5.1 Environmentally 3 Use of minimum 10 products with Environmental Product Declartions (EPDs) and/or sustainability certifications ecognized at Responsible Sources European/International level such as Cradle to Cradle, Ecolabel etc, FSC, etc.. For the purpose of this requirement, one EPD per category will be considered. Categories: - Wood (permanently installed in the building, eg: doors, floating floor, OSB) - Concrete and / or cement - Steel - Stone and / or aggregates - Materials made of clay - Cardboard bottle - Glass - Plastics, polymers, resins, paint, other chemicals, bituminous - Fiber of animal origin, leather, cellulose fibers - Insulation E5.2 Environmentally 2 To encourage selection of products that have been extracted or sourced in a responsible manner. Responsible Sources E6 Low volatile Organic 6 To reduce the health risk of the residents by using low (up to 10 grams per liter VOC) or no VOC by reducing Compounds (VOC) concentrations of chemical contaminants that can damage air quality, human health, productivity, and the environment. E7 Fire Resistant Materials 5 To increase fie safety by using insulation materials that are fire resistant within the A1 and B category according to the Romanian legislation. E8 Renewable Materials 3 To decrease dependence of non-renewable materials by using at least 30% in volume of renewables and rapidly renewables such as bamboo wood, cork, cotton (recycled denim), agrifiber, natural linoleum, etc. from the total amount of materials used on site. 12 HUMAN HEALTH & WELLNESS F1 Radon Safety Required To prevent or minimize exposure of building occupants to indoor radon concentration. Monitoring, controlling and reducing indoor radon exposure in all occupied areas of buildings.

F2 Formaldehyde, VOC, & Required To encourage superior interior air quality measures implemented. Particulate Testing Air Testing Before Bome Occupancy F3 Acoustic Comfort 3 Calculations provided by the architect and confirmation the acousting indicativ C 125/1 - 2013 a Normativului privind acustica în construcții și zone urbane, indicativ C125-2013 was considered. (The norm on acoustics in constructions and urban areas, indicatives)

F4 Biophillic Design 5 To alleviate stress and anxiety while improving the indoor environment and air quality. F5 Urban Farming/ 4 To improve food security, support a local economy, and contribute to social inclusion, Urban Farming and Food Production is Food Production/ encouraged. This is synergistic with credit A 3: Operational Waste Management and with C4: Heat Island Effect Reduction. It contributes to Permaculture the greenery of the city along with efficient use of urban waste. ENERGY OPTIMISATION

G1 To reduce excessive energy Required Improvement in Kwh/sqm/year energy performance compared to the minimum score for achieving an “A” class label in the Romanian use, shift toward low Energy Performance Certificate (EPC) and comply to NZEB performance requirements carbon energy solutions, 20 45% improvement per above improve energy security, 30 60% improvement per above and reduce energy costs. 40 PASSIVEHAUS Standard 10 INNOVATION

H1 Various Ideas & Solutions 10 Ideas or Solutions to improve the green performance of the project can be submitted for consideration of awarding of up to 10 points. TOTAL POSSIBLE POINTS 160 Certified 80-99 Excellent 100-129 Superior 130-160

36 Appendix 3 Financial example for Green Mortgages The annual savings of a Green Homes certified apartment can equal 1 and 1/2 mortgage payments or more!

This case study from Romania compares an average “new build” project (represented by the “B” Energy Performance Certificate score) versus a “low A” and a Green Mortgage qualified project. The various components of the energy performance of the home are quantified. A “total monthly cost of ownership” is calculated to compare the financial impact of the owner of each residential units. This model makes conservative assumptions omitting, for example, the likely reduced repair costs of a green home versus a standard home. While the construction costs and energy prices may differ in each country, a similar financial example prepared for other countries would demonstrate the benefits of investing early in green performance to reduce the “Total Cost of Monthly Ownership” EPC “B” EPC “A” Green Homes certified rated apartment rated apartment apartment

NET SAVINGS WITH GREEN MORTGAGES (in Euros) Sales price of 70 sqm apartment with Value Added Tax 98,000 100,100 104,300 Loan amount with 15% down payment 83,300 85,085 88,655 Monthly mortgage payment 499 510 505 Cost of energy/apartment/month (€) 101 65 33 TOTAL COST OF MONTHLY OWNERSHIP: MORTGAGE + ENERGY 600 575 538 Net monthly savings for certified Green Homes versus “B” apartment 0 25 62 Net annual savings for certified Green Homes versus “B” apartment 0 300 744 * Assumptions: Market price: €1,400/sqm; Payment period: 25 years; The developers will pass on the cost of the energy efficiency improvements directly to the consumers but will not add a profit on it.

COSTS AND SAVINGS OF ENERGY EFFICIENT MEASURES Construction parameters Increase in construction cost from green measures (%) 0% 5% 15% Construction cost (€/sqm) 600 630 690 Additional construction cost from green measures (€/sqm) 0 30 90 Total additional construction cost from green measures for home (€) 0 2,100 6,300 Energy consumption Energy consumption for heating (kWh/sqm/year) 117 70 50 Energy consumption for domestic hot water (kWh/sqm/year) 35 15 15 Energy consumption for air conditioning (Cooling) (kWh/sqm/year) 35 20 10 Energy consumption for ventilation (kWh/sqm/year) 10 5 5 Energy consumption for lighting (kWh/sqm/year) 49 40 10 Total energy consumption for apartment (kWh/sqm/year) 246 150 90 Cost of energy Average price of electricity (€/kWh incl. VAT) 0.12 0.12 0.12 Average price of gas (€/kWh incl. VAT) 0.04 0.04 0.04 Annual cost for heating energy (€/sqm/year) 4.89 2.93 2.09 Annual cost for domestic hot water (€/sqm/year) 1.46 0.63 0.63 Annual cost with air conditioning (cooling ) (€/sqm/year) 4.11 2.35 1.17 Annual cost for ventilation (€/sqm/year) 1.17 0.59 0.59 Annual cost for lighting (€/sqm/year) 5.75 4.70 1.17 Total annual cost of energy (€/sqm/year) 17.40 11.19 5.65 Total annual cost of energy for 70 sqm apartment (€) 1,217.72 783.18 395.79 Average monthly cost of energy for 70 sqm apartment (€) 101.48 65.27 32.98 Energy cost reductions Average monthly energy savings relative to “B” apartment 0.00 36.21 68.49

MORTGAGE RATE CALCULATION Size of apartment (sqm) 70 70 70 Price of apartment 98,000 100,100 104,300 Percent of down payment 15% 15% 15% Down payment 14,700 15,015 15,645 Interest rate (7 year fixed; local currency) 5.25% 5.25% 4.75% Repayment period (years) 25 25 25 Loan amount 83,300 85,085 88,655 Yearly mortgage payment 5,988 6,120 6,060 Monthly mortgage payment 499 510 505

37 Appendix 4

Selection of certified green residential projects for the SMARTER Finance for Families consortium

Non-toxic coatings, adhesives, and other building materials ensure the future health of the families living at Amber Gardens. The homes and an adjacent playground and common garden use native plants and non- toxic and sustainably-sourced materials. The roads and sidewalks were designed and constructed to eliminated adverse environmental Passive House at Wayside Silken Park- by Durkan Residential impact of the project site. This project Cork, Ireland Silken, Ireland is the first Green Homes approved This project was completed in 2017 and This single dwelling completed in 2016 project certified by RoGBC for is a residential development with 59 is outstanding from both low energy detached homes. and ecological points of view. It was homes. The buildings are very efficient designed to meet the Passive House in terms of energy consumption, standard criteria, it has extremely low meeting the Passive House standard heating bills and a monitoring systems requirements. It was rated with BER A2 for CO2 level, which is controlled by and A3, was designed to reduce water the heat recovery ventilation system. consumption by 40% compared with The water consumption is reduced typical Irish dwellings and provides with 80% compared to a typical irish charging stations for electric vehicles. dwelling, it has a BER rating of A1 and meets the Net Zero Energy Standard.

One Herastrau Park Residence – by One United Bucharest, Romania This project, completed in September 2017, includes 106 apartments and has committed to achieve the necessary criteria established by the Green Homes certification program. The Aviatiei Park 1 – by Forte Partners concept of integrated design and Bucharest, Romania all sustainable strategies are being Aviatiei Park 1 is a residential complex Amber Gardens – by Alesonor considered including: significant of 176 units, located in the North Tunari, Romania reduction of construction waste of Bucharest in the immediate This luxury homes project includes 21 through responsible construction management strategies, operational proximity of public transportation and completed villas with a total of sixty waste separation for households, and surrounded by over 10 000 sqm of planned. The houses are designed and energy efficient measures combined green spaces. constructed using bio-climatic design with an occupant educational principles to achieve the ambitious program to optimize and reduce all Aviation Park is a closed circuit Passiv Haus energy efficiency the energy consumption throughout residential project, in which the certification and, with photovoltaic the building lifecycle. housing units are connected to each panels installed, have already other via alleys, small public squares surpassed in 2014 the nearly “Net Zero and other green spaces, offering a Energy” standard due by European boost of privacy and exclusivity to Directive in 2020. the tenants.

38 the facade and terraces to create a sense of nature for the residents, individual controls of heating and cooling, natural ventilation for the units, modular architecture for apartment reconfiguration, innovative architectural solutions for the terraces such as the active ceramics, filtering the air and presenting anti-pollution and antibacterial effects, non- Casa Solaris – by Casa Solaris SRL toxic paints and adhesives, window NIDUS Home– by NIDUS MNH Voluntari, Romania adjustment for each apartment to Brezoi, Romania Is a single-family home located in the enjoy a certain view and various NIDUS Home is an innovative concept of a north of Bucharest that was competed energy efficient measures to optimize modular and configurable house, 100% in 2014 and certified in RoGBC’s Green and reduce the energy consumption prefabricated with natural materials such Homes program. It is the first of a mini throughout the building lifecycle. as straw insulation, optimized wooden ensemble of 3 individual pilot homes. structure and clay finishes. It is designed It is an active house – producing more according to PassivHaus principles and has energy than needed for its current minimal maintenanc e and operational operation – due to the contribution costs. of its 72 sqm of photovoltaic panels The prefabrication technology allows the with surplus solar electricity being construction time to be predictable and fed into the public grid. Casa Solaris is very short, so that it takes only 3 weeks for also equipped with 37 sqm of thermal prefabrication and 5 days assembly on site. collectors used for both domestic hot The modules that make up the NIDUS Home are transportable anywhere in water production and winter heating, Europe and the process of getting a house using an innovative approach of is very simple, compared to buying a car: underground storage of the summer One Herăstrău Towers you buy it, you get it, you start using it right heat surplus eliminating the need – by One United Properties away, without any other hassle. for a heat pump. Energy efficient Bucharest, Romania NIDUS has partnered with RoGBC to construction and smart solutions One Herastrau Towers, developed by ensure its housing solution is delivered for heating and cooling reduced the One United Properties, is a residential to meet the Green Homes certification energy load to approximately 50 Kwh/ project talking the Green Homes criteria. sqm/year. The technology provides a sustainability standards. The complex healthy interior climate with controlled is Pre-Certified in the program and due humidity and uniform temperature to be completed in 2020. without undesirable air flows. The One Herastrau Towers project includes a mix of residential units, offices and commercial spaces. The ground floor of the building will have a commercial purpose and includes 5,055 sqm of office space. The two towers will contain 139 housing units. In addition, two levels will be allocated The EFdeN Home – by Team EFdeN to the arrangement of parking spaces. Bucharest, Romania

The two towers will offer the tenants The EFdeN house was designed by Romania’s university team as an entry Central District a panoramic view towards Lake to the prestigious “Solar Decathlon – by Forty Management Herastrau and the northern area Europe 2014” contest. The home was Bucharest, Romania of Bucharest and large terraces. In carrying out the works, measures will assembled in Paris for the summer This project of 40 units was be implemented to achieve a high level contest and is now constructed at the completed in October 2017 and is of energy efficiency. Technical University of Construction Green Homes Certified by RoGBC. – Faculty of Installation Engineering The innovative design concept of in Bucharest. The EFDEN house the building includes: complete LED successfully defines sustainability illumination, plants and trees on and integrated green and healthy

39 25 materials. The central architectural prototype is a greenhouse providing a multi-functional integrated green space that delivers urban farming/ food production, natural daylight, indoor air quality, and passive solar heating as well as a relaxing living space. The project received the Green Homes certification from the Romania Green Building Council. 9 Rathmines Crescent Casa Capristo - by Dublin City Council Ranica, Italy Dublin, Ireland This project is a renovation of an This project owned by the Dublin City existing house built in 1990 to make it Council was completed in 2016 and highly efficient and sustainable. The certified by the Irish Green Building project moved from the use of classic Council. It has 9 apartments and low systems for heating, lighting and operational costs due to careful design irrigation to the use of electricity from of form, insulation, junction and heat renewable sources. A photovoltaic recovery ventilation system. It was system with amorphous panels was built on a brownfield and its location installed. The heating system was built Central District 4 Elemente enables very low carbon footprint from with radiant floor systems supplied by - by Forty Management transportation and active lifestyles. a heat pump and solar thermal panels Bucharest, Romania and produced domestic hot water Central District 4 Elements is located eliminating the gas supply. in the central area of Bucharest, on 7 Fizicienilor Street, a perfectly The entire building is equipped positioned place to quickly reach with air treatment with continuous the vibrant areas of the city, but recirculation inside the individual sufficiently low-key to feel the rooms to guarantee indoor air quality. protection of a quiet community. Rainwater is harvested from the roof and reused for watering the garden Central District 4 Elements means: and through an integrated system Air, represented by large, spacious for the toilets. The electrical system One Herastrau Plaza – by One United areas, from terraces and balconies is realized with a domotic system in Bucharest, Romania that can receive tables with chairs to particular for the control of electrical enjoy the morning coffee to generous Through an integrated urban residence loads that guarantees to be able to receptions and large circulations; concept, the project’s two buildings fully use the photovoltaic system. Water, represented by 3 large pools will connect 147 apartments to and garden fountains, located in the essential neighborhood services and The envelope was made of wood fiber, common yard of the blocks; Earth, nearby recreation in parks and lakes; to ensure maximum contribution from represented by more than 2500 sqm creating convenience and reducing the thermal and acoustic point of view of green spaces, with flower gardens, transportation impact. Combining and together with the laid parquet large trees and a promenade area; geometric and vegetative elements, have PEFC certification. Fire, represented by about 500 sqm One Herastrau Plaza is simultaneously allocated to the social area, with bar, its own square for residents and an The windows are in wood-like grill, sun umbrellas, tables, chairs, extension of a natural landscape aluminum and wood, with triple and an outdoor cinema – spaces that in the city. Bio-climatic design, a glazing and high transmittance encourage discussions and building terrace, planted roofs and shaded performance. There are external friendships between neighbors. streets are additional elements shading systems such as sun-shadings of green features of the project. that can be adjusted and integrated All these elements prove that there The atrium in the outdoor plaza is with the home automation system to are no houses without soul and covered with glass panels on an guarantee maximum internal lighting real estate development without a ornamental steel structure while the in the individual rooms. community. The project is due to be natural, locally-sourced, stone walls completed in August 2020. accent confers elegance. Ventilated facades contribute to the thermal performance of the buildings.

40 system, which allows in some phases of the summer season to be able to cool the house directly through the energy supplied by the ground, without the need to use the heat pump compressors. It is also equipped with a heat recovery controlled mechanical ventilation system with recovery yields exceeding 90%. The air exchange system during the summer season has the function of Valley 21 – by Dalghias Development dehumidifying the rooms. Hemp House & Building the future Sibiel – Sibiu, Romania Vama Buzaului, Romania This model house, scheduled for This project includes 60 low impact, completion in December 2019, is a 100 deep green homes that incorporate sqm single family home that will utilize bioclimatic principles and green a combination of hemp and lime - both energy usage. The project has begun for the walls and for the insulation of the construction of what will be those walls, roofs and doors. the anchor of the community; a hospitality center. The model home The mix of hemp and lime ensures was completed and certified in an optimal level of air humidity, and September 2016. The project merges eliminates the risk of mold growth modern and traditional building Wings – by Studium Green and the presence of pests, while methods and incorporates local, Cluj-Napoca, Romania also ensuring very good thermic sustainable materials. This residential project, developed by insulation. The lime content absorbs Studium Green, obtained the Green Co 2 in the atmosphere for up to ten Homes pre-certification in 2019. years and the manufacturing method Located in the Zorilor neighborhood requires only one third of the typical west of Cluj-Napoca, the project water consumption, decreasing the comprises 228 apartments that environmental impact of the building. have good public transit access and a ll construction materials are 100% are well connected to numerous natural and of local origin. facilities including medical centres and commercial areas. The structure of the house is made of laminated wood with recycled The biomimetic architecture offers wood used for the interior stairs Casa Monica an innovative and emblematic touch. and furniture, with locally produced Modena, Italy The orientation of the building wooden joinery. This single-family building has ensures abundant natural daylight achieved the top Platinum level with throughout the day. 89 points out of 110 according to the The unique configuration of the GBC HOME 2011 protocol; representing apartments is accompanied by a set a model of sustainability with respect of sustainability measures, such as: for the historical and architectural intelligent architectural and efficient conditions of the building. The LED lighting, mineral wool insulation, structure of the basement is made waste sorting via underground of reinforced concrete, while the infrastructure, charging stations for floors above ground are made using electric cars, as well as 3500 sqm of prefabricated wooden structures. Lake District green spaces within the complex, – by American Eco Homes SRL for the increased comfort and well- Iasi, Romania The integrated energy production being of residents. system involves the use of solar This project in the Miroslava thermal, geothermal and photovoltaic, community near Iasi has begun combined with a heat pump; no fossil construction with plans for over 600 fuel is used. The further optimization of row houses with the first tranche energy consumption is achieved during certified in the RoGBC Green Homes the summer season by a free cooling program. The project uses innovative

41 structurally insulated panels to and garden. Belvedere Green Homes achieve superior energy performance, Residence is located in one of the most seismic resistance and construction coveted areas of Galati, a quiet area, in quality while maintaining affordability. the vicinity Arcasilor Street and is the The Lake District project’s homes first Green Homes certified residential include passive solar design and project in Galati by Romania Green optimize natural ventilation, Forest Building Council. Stewardship Council (FSC)-certified wood, low VOC paints, adhesives, and The project offers a number of flooring and water efficient sanitary advantages and facilities: items and landscaping. The project’s Jardine Hills – by Mason Jar — Access to local means of transport; construction management diverts Dealu Mare – Prahova, Romania — In the vicinity of Metro, one of the over 50% of construction waste from Located in the wine region of Dealu most popular supermarkets in the city; landfills (with 25% being standard Mare, “Jardine Hills” consists of an — The area is attractive for the industry practice). existing main house and guest cottage inhabitants, it can be reached in a and three newly-constructed guest few minutes at Shoping City Galati, cottages that combine a modern, accessible by public transport or by car. green approach with a rustic design. Photovoltaic panels provide off-grid electricity (3.6 kW), while solar thermal panels and a high ef ciency heat pump supply hot water for domestic use and heating the swimming pool. The entire grounds are landscaped using sustainable principles including using drought resistant plants, Over4 prototype - by Team Over4 natural mulch and a low water use Bucharest, Romania drip irrigation system. Energy ef cient The Over4 house is a prototype windows, doors, insulation and other Candominio Ianini designed and built by a materials combined with a state of L’Aquila, Italy multidisciplinary team of students the art air to air heat pump system Iannini condominium is the first from Romania - the Over4 team heat and cool the new guest cottages; post-earthquake Reconstruction - for the Solar Decathlon Europe each with separate thermostatic zone Building certified by GBC Home. 2019 competition. It is a modular and controlled with a smart phone- Particular attention was given to solar passive house, assembled and enabled application for remote energy performance, reduction disassembled multiple times both initiation, monitoring and adjustment. of environmental impacts and in Romania and Hungary. It is built the maximization of comfort and entirely from wooden materials from healthiness of indoor environments. sustainable sources, meets each Unique, as the first realization in the requirement of the passive house Aquila area but perfectly aligned with standard and has a PV system; creating the international practices that make an energy independent house. It was Sustainable Building the main modus awarded the 3rd place in the Solar operandi to guarantee performances Decathlon Europe competition, is and investments. The building has pre-certified by the Romania Green achieved a 44% in water reduction and Building Council with Green Homes 59% reduction in energy consumption. certification and is currently under the process of full certification. Belvedere Green Homes Residence Galati, Romania The Belvedere Green Homes Residence Residential Complex has 14 homes, divided into two 6-dwelling buildings (Sixplex) and a duplex house, designed specifically to meet the space and comfort needs of the owner, on the ground floor and on the first floor, with its own parking, terrace

32 | 42 of the buildings. The project design is optimized to provide natural lighting and ventilation. Sustainable landscaping and lush gardens, carefully designed, complete the list of Green Homes benefits.

Aviatiei Park - by Forte Partners West Side Park – by Studium Green Bucharest, Romania Cluj-Napoca, Romania Located in the north of the capital, in an West Side Park, developed by Studium area that gathers new-wave companies Green în Cluj-Napoca, is a residential and businesses, The Aviatiei Park project comprising of 244 apartments. Complex meets the needs of a young and dynamic audience to live close to The project stands out through the the workplace and save time. Future Vision – by Studium Green generous high performance windows residents of the complex will have the Cluj-Napoca, Romania and large balconies in each apartment, the ventilated facade includes opportunity to enjoy the surroundings, This completed project of 177 take their children to The Herastrau Park, apartments delivers nearly 40% photocatalytic ceramics, treated an 8-minute walk. For shopping, Lidl and energy savings relative to standard, with titanium dioxide, which protects Mega Image are right at the exit of the utilizes an existing building structure against pollution and constantly complex, and the Promenada Mall is a to minimize resource use and produces active oxygen. The 2-minute drive away. construction waste, is connected project also hosts the largest green via public transit to the city center, suspended terrace in Transylvania with The Aviatiei Park complex offers one, and has easy, walk-able access to an area of 2500 sqm along with other two, three or four-room apartments numerous facilities including shopping green spaces on the premises, freely with a warm and welcoming atmosphere and schools. It was the first Green accessible for tenants. where natural light is abundant and Homes approved project certified by generous. Each space is efficiently the Romania Green Building Council. The West Side Park residential partitioned, providing residents with project was completed in 2019 and various possibilities for fitting and usage, has received the class “A” for energy adapted to a modern lifestyle. performance.

AFI City Bucurestii Noi – by AFI Europe Romania Floreasca 1 – by 1development Bucharest, Romania Bucharest, Romania One Charles de Gaulle – by One United Bucharest, Romania The project developer, active on the This project of 22 luxury apartments - Romanian market, agreed to achieve completed and certified in RoGBC Green The 33 units within two, low the necessary criteria to Certify Homes program in February 2015 - is in a height buildings of the residential a total of 1.688 units for a multi- premier residential section of Northern compound respects a historic family residential unit in the North Bucharest, has good public transit access area and is dedicated to upholding East of Bucharest. All green energy and is in a walkable district with shopping, the environmentally-friendly and energy efficiency strategies are schools, and other essential services characteristics of Green Homes. This being considered at this early stage nearby. The project provides superior includes green terraces, high energy of the design project along with due energy efficiency and thermal comfort efficiency, use of natural materials and consideration for site management and and incorporates sustainable landscaping waste minimization and management a plan for facilitated waste avoidance and finishings including wood certified by during construction and operation and management post occupancy. the Forest Stewardship Council.

43 The compartmentation of each apartment was designed so as to ensure optimum functionality, paying attention to details and using quality interior finishes.

The Petru Rareș 1259 qualified for the Green Homes pre-certification and is projected to be completed in 2020.

One Mircea Eliade – by One United Ecological House Slava Rusă Bucharest, Romania Slava Rusă – Tulcea, Romania One Mircea Eliade is developed on the The 80 sqm family house will be site of the former Automatica factory, entirely energy independent, using a located between the Primaverii and mix of wind and photovoltaic energy. Floreasca neighborhoods. The house has a biodynamic design, offering maximum exposure to sunlight It houses 236 apartments and is part during winter and shading in summer of a larger development project that time. The house will include solar includes: One Floreasca City, the One panels for water heating, heat recovery Tower office building, a Food Hall ventilation system and heat pumps. concept, restaurants, a gym with a swimming pool and adjacent to the The structure of the house will be Floreasca Park. made of wood, while the roof will be made of reed; a local traditional The project implements sustainability material. Natural waste water measures related to energy efficiency, treatment will be accomplished with responsible construction practices, the reed plantation. The house will be resource optimisation, thus offering completed in 2020. to the occupants alternative transportation options and a healthy interior environment. OH Plaza – by One United The investment targets the entire Bucharest, Romania area, not just the three buildings, that One Herastrau Plaza is a luxury residential will result in a positive impact on the project with 156 apartments, located in nearby road infrastructure. the vicinity of Lake Floreasca, Herastrau Park and the Promenada Shopping Mall. The setting ensures an easy access to all public transportation facilities. Šumavský Dvůr Numerous features are included to Železná Ruda, Czech Republic minimize energy consumption, such as: Šumavský Dvůr is a unique mountain automation of lighting in public spaces, apartment in the heart of the Bohemian separate energy meters for each tenant, Forest, in a harmonious nature with a LED lighting installations and motion unique view and year-round sports. It sensors, biophilic design. offers above-standard architecture The complex offers special playgrounds with comfortable services. Within the Petru Rareș 1259 – by Global Invest for children, as well as many green areas. framework of a good climate and a Bucharest, Romania The finishes are made of high quality quiet zone, the location was chosen to The Petru Rareș 1259 residential materials: hardwood floors, wooden not damage the character of the whole project will be developed in two decks for terraces with tiles and granite landscape. The project was designed to phases, totaling 177 Apartments. and non toxic varnishes and paints. be both comfortable and sustainable Located between Victoriei Square and because it was built with a natural Banu Manta Boulevard, the project character, with renewable construction is very well connected to the most materials and it has been awarded the important interest points in the city. SBToolCZ silver certificate.

44 project has been awarded the comfortable indoor conditions for all SBToolCZ silver certificate, which users. In addition to saving energy and assesses the quality of buildings in water costs, the negative impacts of terms of sustainable construction. buildings on the environment were minimized in line with the criteria for material selection. In addition, with the implementation of these criteria, healthy living quality, productivity and cost optimization for the project’s inhabitants were achieved. In line with the environmental procurement Air Residences – by NAI policy, local and recycled materials Bucharest, Romania and FSC-certified wood were specified Air Residence - One, developed by to minimize environmental impacts. NAI Romania, is a residential project located in the northern area of Green Campus – by Studium Green Bucharest near the Aviatiei district. Cluj-Napoca, Romania The project comprises 11 apartments, The residential Green Campus, distributed on 4 floors. developed by Studium Green, was the first residential complex in Romania Air Residence aims to create a healthy designed and built according to the living environment; symbiotic with green building criteria. The project nature.. Some of the sustainable promoted a variety of innovative features include mineral wool insulation, solutions such as the use of underfloor heating, photovoltaic environmentally friendly materials, panels in the common spaces of the zero VOC paint, LED lighting system building, aiming to reduce to zero the for the common spaces, separate Residence “Leonardo da Vinci” costs associated with the consumption waste collection system for 5 waste - by Asacert srl of electricity in these common spaces. types, energy efficient lifts with Vicenza, Italy To encourage a sustainable lifestyle, energy recovery, green façade and The architectural volumes are the project provide a secured parking intensive green roof, recovered designed according to the maximum spaces for bicycles. materials and over 50% of locally perception and use of sunlight, the produced materials. The building quality of living and the considerable has an area of over 15000 sqm and view, free of obstacles, on the Vicenza comprises 191 apartments. pre-Alps and the countryside. The geometry and the particular design Completed in 2014, Green Campus and orientation of the roofs make became the first green residential them suitable to receive solar energy building in Romania, focused on through photovoltaic panels. innovation, environmental protection and occupant health and wellbeing. The building is built in an urbanized area convenient to the center and is X-LOFT served by sidewalks, cycle paths and Prague, Czech Republic a developed public transport service. This residential development was Is a unique residential project located awarded by GBC Italia with the Gold near the center of Prague in a quiet Certification. The water consumption location of the original development is reduced by 39% compared to the of apartment buildings in Liben. baseline value. The condominium An important part of the project has been built with local or regional philosophy is the economic and materials, with a high recycled content, ecological operation of the house. and with third party EPD certification. The X-LOFT project was designed Selenium Retro 9 - Asçcıoglu Insaat to save not only the costs for its Istanbul, Turkey inhabitants but also nature. Facade Selenium Retro has been designed insulation, triple glazing, solar panels, and built in accordance with the LEED heat recovery and rainwater retention criteria set by the US Green Building ensures a significant reduction in Council (USGBC) to ensure healthy and operating costs. The low-energy

45 concierge service and other easily accessible amenities. The project excels in the energy efficiency area, offers a superior interior air quality, uses high performant materials, e-car charging stations, sustainable green spaces and innovative waste management solutions.

Residence Galileo Gramont – by BPM Development Costabissara, Italy Bucharest, Romania The residential project completed in The Garamont residential complex was 2014 was the first to obtain the Gold built on the site of a former perfume level of GBC Homes. The complex factory, whose façade was recovered develops a gross area of 1067 m2 and fully integrated into the project. and consists of 8 Energy Class A residential units. Among the various It is located in the immediate vicinity of Home Cast - by Building srl construction technologies used are Carol Park, as well as some important Almese, Italy the heat pump heating and cooling cultural objectives of Bucharest: the systems, the mechanical ventilation National Museum of Contemporary This building, awarded by GBC Italia systems for hygienic renewal with Art, the Mausoleum in Carol Park, the with a Gold Certificate, was created heat recovery, the production of Technical Museum and the National from the will of the clients to create Library. The site provides very close domestic hot water through thermal a sustainable and efficient home. It proximity to kindergartens, primary solar panels, photovoltaic panels to was designed to ensure strong energy schools, high schools and national support the electric system, windows efficiency performance due to careful colleges, universities and academies. with triple glazing, and a rainwater planning of the thermal envelope, glazing and the use of the sun as an recovery tank. Some of the sustainability features energy source. The need to make the include responsible construction practices, sustainable materials, most of solar radiation in the winter energy efficiency, biodiversity period was met by the construction of improvement, superior interior air large south-facing windows and solar quality, biophilic design and alternative collecting greenhouse. The building transportation solutions. is shaded during the summer by appropriately-designed overhangs.

Stejarii 2 – by Ţiriac Imobiliare Bucharest, Romania Stejarii 2 is a residential project of 57 000 sqm, developed by Tiriac Imobiliare, in the Northern part of Bucharest.

Some of highlighted sustainability Rahmaninov Residences features include energy optimisation, – by Rahmaninov R esidences 50-70 measured to reduce the water Bucharest, Romania consumption, sustainable materials, The Rahmaninov Residential project e-car charging stations, biophilic is a luxury property located in the design, abundant daylighting and immediate vicinity of Verdi Park and infrastructure for separate waste Lake F loreasca, offering panoramic views. collection. The residences include 6 floors covering a built area of 23,000 sqm; In addition, the complex offers a variety the project is well connected to of services, from sports activities, to the office area in the north of the spaces for relaxation and wellness. Capital. The project will include a cafe,

46 Green Homes Notes Solution Providers in the program today! for details, check https://greenhomes.solutions/

With green products such as mineral wool insulation with biobased, formaldehyde-free ECOSE™ technology and UrbanScape™ lightweight green roof solutions KNAUF Insulation became one of the first Green Homes Solution Provider.

VELUX roof windows provide natural daylighting and natural ventilation and use sustainably harvested forest products.

EV CONNECT’s car charging stations are manufactured and include fast charging options for a variety of plug-in-hybrid and full electric vehicles.

47 Green Homes Notes Solution Providers in the program today!

Rigips Activ'Air® is a ceramic core plasterboard that captures, retains, and decomposes formaldehyde in the household; contributing to significantly healthier indoor air quality for the occupants.

Kronospan is today the leader in the production of wood-based boards of the highest quality for both the internal and external market.

From the first oller motor to connected home solutions, we have helped create a comfortable lifestyle for millions of users around the world.

ALUKÖNIGSTAHL is a successful family-owned company operating at the fourth generation level and presently active all over Europe.

48 “Increased energy savings and other financial benefits substantially reduce the mortgage default risk allowing the lender to lower the monthly interest rate while maintaining profit margins.”

| 31 49 SMARTER FINANCE FOR FAMILIES

For more information please contact

[email protected] [email protected] OFFICE: +40 738 182 421

This project has received funding from the European Union’s Horizon 2020 research and innovation programme (grant agreement No 847141). 32 | 50