"Together towards a climate-neutral future: financing and renovation hand in hand" - this was the motto of the interim conference of the CREATE project funded by the Federal Ministry of Education and Research (BMBF) on 15 October 2024. The conference brought together experts from research, the insurance industry, subsidised financing and energy consulting, who provided valuable insights into the link between financing and building refurbishment.
The online conference was organised by HFT Stuttgart in cooperation with the German Sustainable Building Council (DGNB) and the VfU - Association for Environmental Management and Sustainability in Financial Institutions e.V. - and provided a valuable interim assessment of the findings and progress made by the CREATE project to date.
How can the decarbonisation of the building stock in Germany be accelerated? What role can impact-oriented financing instruments play in this transformation process? Practical approaches for linking financing and refurbishment measures were presented for these key questions, which will help to further advance the decarbonisation of the building sector in Germany.
Around 60 participants from research, business and the financial sector followed the presentations and discussed specific measures and future visions for a more climate-friendly property sector. The interim conference provided new impetus for the climate-neutral transformation of the building stock through lively dialogue.
Prof Dr Tobias Popovic, Department of Economics and expert in Corporate & Sustainable Finance at HFT Stuttgart, presented the integral CO₂ impact approach developed as part of CREATE, which combines the refurbishment and financing processes. This approach reduces complexity for all parties involved and incentivises property owners to reduce the carbon footprint of their buildings. Impact-oriented financing instruments based on criteria for sustainable corporate management - the so-called ESG-linked logic (environmental, social and governance) - could support the refurbishment process and motivate owners, for example through interest rate reductions and repayment subsidies. The CO₂ impact approach could also serve as the basis for building-specific transformation plans and thus promote a structured approach to sustainable refurbishment.
Insurance as a lever for transformation
Marcus Reichenberg, Managing Director of the Greensurance Foundation, emphasised the potential of residential building insurance as a lever for transforming the building stock. He suggested rethinking the insurance industry (actuarial profession), for example by rewarding sustainable behaviour with bonuses and imposing a penalty for non-renovated buildings. Claims settlement could also be adapted to offer additional benefits for sustainable repairs. In addition, changes to insurance terms and conditions could promote environmental impact by using more sustainable wording, such as "sustainable of a better kind and quality" instead of "of the same kind and quality".
Investment and active commitment for the transformation
Johannes Heinloth, member of the L-Bank Management Board, emphasised the importance of extensive investment and the development of expertise in order to accelerate the transformation to a climate-neutral real estate industry. L-Bank's impact-orientated funding products, such as the combined housing loan with climate premium, showed how state funding can provide targeted support for refurbishment measures. Heinloth appealed to all stakeholders to actively drive the transformation forward, particularly through digitalisation, the increased use of renewable energies and the development of coordinated action plans.
Modernisation advice as a supplement to energy advice
Sandra Frey, Head of Customer Service and Deputy Sustainability Officer, Bausparkasse Mainz AG, presented the model of modernisation consultants at Bausparkasse Mainz AG. These consultants combine refurbishment and financing processes in a practical way and offer property owners qualified advice on holistic building refurbishment without replacing the role of energy consultants. According to Frey, they provide information on aspects such as the Building Energy Act (GEG) and economic optimisation and are the point of contact for sustainable refurbishment. Around 60 per cent of loan brokers at Bausparkasse Mainz value the expertise of modernisation consultants and frequently use it in advisory discussions, explained the Head of Customer Service.
Expertise in financing and valuation makes sense
Ronan Maier, Team Leader for Funding Services, Effizienzpioniere GmbH, reported on the importance of energy consulting in the financing process. The energy standard of a building has a direct impact on its value and rental income. Although energy consultants cover the requirements of the GEG, they cannot make any well-founded statements on value development or financing, which makes cooperation with experts in financing and valuation sensible. Depending on the life cycle phase of the building - whether purchase, renovation or sale - the importance of energy-efficient renovation and the requirements for energy consulting change.
The interim conference showed that cooperation and dialogue between different stakeholders from different sectors are essential in order to overcome the complex challenges of the building transformation.
The event was moderated by Dr Max Weber, Partner at the auditing firm EY. With his expert and lively leadership, he succeeded in bringing the different perspectives and specialist topics together in a coherent discussion.
Author: Joachim Jörg