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News article9 May 2022

New report: Final Report on Risk Assessment

This new EEFIG finds important evidence that green loans can be less risky as there is a correlation between energy efficiency and credit risk.

Peter Sweatman

The report “The quantitative relationship between energy efficiency improvements and lower probability of default of associated loans and the increased value of underlying assets”, by the EEFIG working group on risk assessment, is now published. It includes contributions from other experts including Peter Sweatman of Climate Strategy & Partners, and Markus Seifert of consultants d-fine, as well as research by Dr Daire McCoy from the Grantham Research Institute on Climate Change and the Environment at the London School of Economics and Political Science (LSE). 

The authors found among other findings, that the most efficient houses can be valued as being worth up to ten percent more than the least efficient or non-rated properties. In the case of rental properties, the value increase can be of around five per cent. 

Peter Sweatman of Climate Strategy & Partners says:

“These findings are timely: the price of wholesale gas is rising and soaring household energy bills are following. Governments should heed the relationship between energy efficient homes and manageable domestic finances and consider how it can help people to improve their home’s energy performance.”

Energy performance data came from a combination of domestic energy performance certificates (EPCs) registers (where available) and proxy models based on energy demand or characteristics of the building.

Read the entire report here


Publication date
9 May 2022