Mortgage providers shall provide appropriate and regular training for their client advisors and/or mortgage specialists regarding the procedure for the long-term value retention and improvement of the energy efficiency of buildings and for the financing of suitable measures.
When providing advice on property financing, the following specific elements should be addressed in particular:
Discussing and assessing the foreseeable need for renovation with the aim of motivating owners to deal with the issue of maintaining the value and energy efficiency of the property and thus also the long-term preservation of the invested capital, with a view to implementing suitable measures;
If required, transparent presentation of financing options depending on the measures to preserve the value of the property in the long term and increase energy efficiency, including:
a. Information on available public and private funding for building renovation, raising client awareness of, and where necessary offering financial support for, the issue of energy certificates;
b. Information on independent experts and specialist bodies for the purpose of obtaining specific advice on the energy impact and financial effects of any optimisation measures (e.g. making buildings more self-sufficient through additional measures to reduce energy consumption or generate electricity and how these affect ancillary costs);
c. Where appropriate, support with applying for funding measures.
Even for existing financing without an upcoming adjustment, mortgage providers should make an offer available (through a combination of direct contact and/or website, for example), which points out to clients possible ways of increasing energy efficiency and shows ways of achieving this, including suitable finance.
June 1, 2022
Geographic Area: Europe, Switzerland
Theme: Formal Policies and Procedures, Strategy (Business Model)
Mortgage providers can structure their conditions in the areas of loan-to-value, affordability, amortisation and interest rates within the framework of the applicable self-regulatory regime in a way that distinguishes between the financing of sustainable properties and those with non-sustainable characteristics. In addition, they can develop new products and services that promote the goal of improved energy efficiency.
June 1, 2022
Geographic Area: Europe, Switzerland
Theme: Business Model Integration, Strategy (Business Model)
These Guidelines cover both personal and, analogously, digital advice for private individuals seeking finance for owner-occupied single-family homes and holiday homes.
These Guidelines cannot form the basis of any claims by mortgage clients.
These guidelines replace the “Guideline for the integration of ESG-considerations into the advisory process for private clients (2020)” as soon as they are implemented by the individual institution.
These guidelines come into force on 01.01.2023.
The following transition periods apply:
a. For training and professional development: until 01.01.2024;
b. For new client relationships: until 01.01.2024;
c. For existing client relationships: until 01.01.2025.
Verification of compliance with these guidelines should be included in the audit catalogue of the financial service provider’s internal audit.
The audit should be carried out in accordance with the generally applicable audit frequency of the financial service provider. It should be based on the financial service provider’s risks, organisation and activities, but should be carried out at least every three years.
According to the FinSA, financial service providers ensure that their staff possess the necessary skills, knowledge and experience to perform their work.
Client advisors therefore need to obtain appropriate training, respectively possess the relevant knowledge concerning sustainability, ESG-investment solutions and applicable ESG-approaches.
In particular, the relevant training for client advisors should include the following topics:
a. Basics of ESG, including different ESG-risks
b. Overview of international principles and regulations
c. Knowledge of the ESG-approaches followed by the financial service provider in investment advice and portfolio management
d. Specific knowledge and understanding of how the offered ESG-investment solutions satisfy the client’s ESG-preferences
e. Knowledge of how existing investment solutions can be transitioned into ESG-investment solutions
f. Basic understanding of greenwashing and how to avoid it
The obligations regarding rendering of account stipulated in the FinSA apply analogously to the ascertainment of ESG-preferences.
Upon request, financial service providers render account to clients with ESG-preferences on whether the ESG-investment solutions or financial instruments offered match their ESG-preferences.
Financial service providers document in an appropriate fashion:
a. whether clients have ESG-preferences or are ESG-neutral;
b. if applicable, which ESG-preferences clients have;
c. whether the ESG-characteristics of a given ESG-investment solution or financial instrument match the clients’ expressed ESG-preferences;
d. that clients have been informed about the mismatch if financial instruments respectively investment solutions deviate from the ESG-preferences they have expressed.
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