The Leibniz Institute for Financial Research SAFE is part of an international consortium that aims to build on a large-scale database model to create a qualitative-quantitative framework to compile and analyze information on energy efficiency and ESG performance not only of listed, but especially also of unlisted small and medium-sized enterprises (SMEs). The overall objective is to introduce a standardized EE-ESG rating model for SMEs. Behind this objective is the research project TranspArEEnS (“Mainstreaming Transparent Assessment of Energy Efficiency in Environmental Social Governance Ratings”), which is funded by the EU's Horizon 2020 program for research and innovation and has now been launched.
“SAFE is delighted to be joining the TranspArEEnS project as part of a key initiative to standardize EE-ESG reporting in Europe. The TranspArEEnS project builds on the necessity of creating a reliable, inclusive, and comprehensive EE-ESG data ecosystem by promoting a standardized framework for EE-ESG disclosure and facilitates ESG reporting for SMEs. This is crucial for achieving the EU’s 2030 green deal targets by enabling increased investment in energy efficient projects. This level of comprehensive ESG reporting could only be achieved with the collective effort of many market participants and we look forward to the collaborative process with the TranspArEEnS’ team,” says Loriana Pelizzon, Department Director Financial Markets and project coordinator at SAFE.
Project work should counteract greenwashing and contribute to financial stability
The TranspArEEnS consortium is headed by Ca' Foscari University of Venice. In addition to SAFE, participants in the project include the European Mortgage Federation-European Covered Bond Council (EMF-ECBC), CRIF, which specializes in corporate information and data processing, and the fintech credit rating agency Modefinance.
TranspArEEnS’ EE-ESG rating will be tested in pilot case studies and capacity building sessions with leading representatives of the financial industry and supervisors. This allows to understand barriers and opportunities for its operationalization in: i) credit risk assessment, ii) development of long-term EE-financing via securitization (covered bonds, European Secured Notes), and iii) introduction of EE-ESG considerations into monetary policies and prudential regulations. By enhancing standardized disclosure of EE investing, TranspArEEnS will decrease uncertainty in the EE and ESG market, thus promoting the scaling up of new EE financing and investment opportunities in the EU. Moreover, it will help to mitigate the risk of greenwashing thus improving financial stability.