Best Tech Provider (Platform Providers) — European Investment Bank: EIB Green Eligibility Checker
As the drive to finance more green projects spreads across the world, stakeholders are in need of further guidance on how to identify appropriate green project opportunities. In its ease of use, comprehensive coverage and analytic rigour, the EIB’s Green Eligibility Checker has emerged as a market-leading digital tool for the greening of the financial industry.
Under the aegis of the EU Climate Bank Roadmap, the EIB aims to have over 50% of its yearly lending to contribute to climate action and environmental sustainability by 2025, while gradually aligning its tracking methodology for green lending with the EU Taxonomy Regulation Framework. The EIB’s approach to the capital markets also reflects this process via progressive extension of its Climate and Sustainability Awareness Bonds’ eligibilities, and gradually aligning these bonds with the proposed EU Green Bond Standard.
These commitments imply a shift across the EU bank’s lending operations - including a highly developed SME financing initiative that uses banks as intermediaries. But across the wider market, banks, borrowers and investors have often struggled to assess which projects may qualify under the EU Taxonomy. For lenders working with multilateral development institutions, they need to know which projects are eligible for green lending programmes, how the funding can be used and what kind of data and reporting they have to provide.
“This created the need to provide intermediary banks with tools that would allow them to identify green eligible projects,” says Daniela Diedrich-Ristic, a senior climate change specialist at the EIB. This gave rise to the EIB’s Green Eligibility Checker - a free, online resource where financial intermediaries and other stakeholders can check green eligibility across multiple sectors. From agriculture and energy to transport and technology, this innovative tool, available in 6 languages, covers more than 40 different investment types and can assess eligibility in just minutes. For those activities included in the EU Taxonomy, the Green Eligibility Checker also reports whether Substantial Contribution (SC) criteria are met.
“It makes it much easier for our clients to understand what we can consider green,” says Lubomir Janos, loan officer at EIB. “Over time the EIB has expanded its green lending tremendously and we now cover many different areas.” Even in specific metrics like energy efficiency, the EIB’s criteria cover everything from efficiency in residential buildings to efficiency in machinery and cars. “There’s a lot of different potential investments clients can look at,” Janos says.
The energy efficiency of buildings is also a crucial area in covered bonds looking to fund green buildings, and this touches on a key part of the Green Checker’s story. “Although this tool was originally developed primarily with lending and leasing institutions in mind, the EIB is now seeing an interest in the Green Checker from a much wider group of stakeholders – fund managers, investment banks, bond issuers, etc.” says Roman Dojčák, green finance advisor at the EIB.
This is understandable, as the EU’s green architecture has evolved the Green Eligibility Checker is becoming a useful tool for the financial sector to keep track of compliance. As EU Taxonomy, delegated acts and technical screening criteria emerge the Green Checker helps users adapt to a shifting regulatory landscape. The tool itself is continuously evolving, as EIB adds new investment types and asset classes. “The Green Checker is an initiative that is equally popular internally as well as externally,” says Diedrich-Ristic.
For the EIB’s partner banks and the wider market, the user friendliness of the tool is a key part of its popularity. “Whenever we have contact with a financial intermediary, a bank or a leasing company, that wants to make their first green transaction, the first thing we recommend is to start with the Green Checker,” says Janos. “Starting with all the pages of detailed eligibility criteria might scare them, but this way there is a very well-organised website with clear guidelines and pictures. It’s a really great starting point for new clients interested in green investments.”
Dojčák says the collaboration between different teams and departments was instrumental in creating such a value-added instrument. “One of the really important factors that helped to make this product so useful to its target audience is that it involved staff from across the whole bank,” he says. “We needed input from people with expertise in different areas - from EIB Advisory Services, through EIB’s sectoral technical experts and loan officers to communications and translators - and also from external consultants. This was a wider collaborative effort and it’s had a very positive outcome for us and our partner financial intermediaries.”