Response to consultation on Implementing Technical Standards on amended disclosure requirements for ESG risks, equity exposures and aggregate exposure to shadow banking entities
16. Should Template 2 in addition include separate information on EPC labels estimated and about the share of EPC labels that can be estimated?
To ensure transparency, the methodology followed for the estimation of the EPC values could be requested.
In this regard, it is worth mentioning that field EREC8 of the ENGAGE Templates version 1.1 also foresee the distinction between measured (“official”) or estimated EPC providing the following reporting options:
- EPC based on Automated Valuation Model (AVM), desktop or other methodology where there is no underlying documentation for the building (ESTM)
- Officially produced EPC based on the documentation relative to the specific dwelling obtained with the consent of the property owner or owners (OFIC)
- Other (OTHR)
We consider that the share of EPC labels that can be estimated would also be a relevant metric to be included in the Template.
In any case, it is crucial that consistency is achieved amongst the different financial regulatory frameworks. As such, the Pillar III disclosure requirements should aim to align with the EU Taxonomy delegated acts’ requirements.
17. Should rows 2, 3 and 4 and 7, 8 and 9 for the EP score continue to include estimates or should it only include actual information on energy consumption, akin to the same rows for EPC labels?
The energy consumption value, which is measured through kWh/m2 per year, corresponds to the primary energy demand (PED) value included in the Climate Delegated Act and the “primary energy use” term of the recast EPBD.
The ENGAGE Consortium is of the view that the EP score should also be reportable as an estimated value where actual information is not available. In this regard, the ENGAGE Templates version 1.1 include as field EREC15 the “Estimated or officially produced PED”, akin to the data field EREC8 applicable to the EPC label.
In addition, the data field EREC16 requests to disclose whether the PED is based on a reference building. In turn, the data field EREC17 requests to disclose whether the PED is provided at building level (BUIL) or at building unit level (BUUL).
18. Do you have any comments on the inclusion of information on covered bonds?
The ENGAGE Consortium recommends that any ESG disclosure templates should rather be transaction agnostic and be applicable to any kind of transactions involving residential real estate mortgages.
In this regard, the ENGAGE Templates have been designed to be neutral from a transaction structure, to enable their versatile use for a portfolio of (mortgage) loans, for a specific funding structure or for an unsecured green bond transaction. The Templates are also suited for covered bond assets, RMBS or mortgage portfolios in general. In fact, given that covered bonds involve the same underlying assets as securitisations, the ENGAGE Templates propose a consistent reporting for the two funding instruments. The next version of the ENGAGE Templates will also include an additional section for home renovation loans.
19. Do you have any comments on the breakdown included in columns b to g on the levels of energy performance?
The ENGAGE Consortium recommends that the thresholds provided in columns b to g on the levels of energy performance are consistent with the recast EPBD and EU Member States’ national implementation acts and national renovation plans. This will facilitate the reporting of the information according to the proposed Template 2.
20. Do you have any further comments on Template 2?
The ENGAGE Consortium welcomes the proportionality principle followed for the proposed templates.
In this regard, the ENGAGE Templates fields are conditional; this means that they are mandatorily requested to the extent necessary for the performance of the alignment check with the relevant section(s) of Annex I of the Climate Delegated Act.
Where information is not available, for the sake of transparency, the ENGAGE Templates provide with the possibility to use “no data” options, following the ESMA Templates approach (see table below).
No Data field value
Reason
“ND1”
The required information has not been collected because it was not required by the lending or underwriting criteria at the time of origination of the underlying exposure.
“ND2”
The required information has been collected at the time of origination of the underlying exposure but is not loaded into the reporting system of the reporting entity at the data cut-off date.
“ND3”
The required information has been collected at the time of origination of the underlying exposure but is loaded into a separate system from the reporting system of the reporting entity at the data cut-off date.
“ND4-YYYY-MM-DD”
The required information has been collected but it will only be possible to make it available at a date taking place after the data cut-off date. ‘YYYY-MM-DD’ shall respectively refer to the numerical year, month, and day corresponding to the future date at which the required information will be made available.
“ND5”
The required information is not applicable to the item being reported.
“ND6”
The required information has not been collected because of personal data protection impediments.
“ND7”
The required information has been collected but it will not be possible to make it available due to personal data protection impediments.
The proposed EBA templates could also adopt this proportionality approach.