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1. Substantial Demand for Understanding Green Financing

We witness a substantial overall market demand for understanding green real estate financing. While regulations have driven green financing and disclosures, especially in Europe, there is also a significant demand for verified green financial products on the secondary financial markets. The demand for, e.g., green bonds and green-covered bonds impacts the overall markets. For financial institutions financing real estate, the "greenness" of the collateral assets is a crucial part of their overall risk management. 

2. The Evolving Importance of Green Mortgages

Initially, green bonds were the focal point of green finance, attracting substantial interest and investment. However, as we aim to decarbonize the entire sector, it has become evident that verified green mortgages play a crucial role. The potential of green mortgages to not only support the transition to sustainable housing but also address significant bottlenecks for green bonds is immense. By facilitating energy-efficient home financing, green mortgages are pivotal in achieving broader environmental goals.

3. From Greenium to Brown Discounts and the role of governmental incentives

With greenness becoming a market standard, it becomes more difficult to find greenium, the premium for green assets. Instead, the spotlight has turned towards the environmentally non-performing assets that are likely to face even more significant "brown discounts" - asset value declines.  Despite this challenge, the future of green finance remains promising, thanks to robust government and EU incentives in development aimed at helping these illiquid assets tackle the brown discount risks by assuring the illiquid assets also have access to finance they need to stay on track to net zero. 

4. Focus on Climate Change and EPC Importance

Among the six environmental objectives of the EU Taxonomy, market maturity is primarily evident in the area of Climate Change. This focus is essential for driving impactful climate actions and achieving long-term sustainability goals. Additionally, the significance of Energy Performance Certificates (EPCs) has surged along with the EU Taxonomy, with some speculating that EPCs may eventually even replace traditional green certificates like BREEAM and LEED. Interestingly, the current hard focus on EPC is in stark contrast to broader sustainability and carbon neutrality targets that span from embodied carbon, sustainable water use, circular economy, and pollution prevention to biodiversity. 

In summary, our research highlights the dynamic and evolving nature of green finance in the real estate sector. As we continue to explore and address these critical areas, we remain committed to contributing valuable insights and driving sustainable financial practices forward.