EVO is pleased to announce the release of a white paper on energy efficiency financing and decarbonization. The white paper, What Financial Institutions Need to Consider for Measuring and Monitoring the Decarbonization Impact of Energy Efficiency Loans, provides financial institutions with an overview of the existing protocols to measure decarbonization in energy efficiency investments, the aspects they should consider when selecting a decarbonization protocol for their current and future portfolios, and, more generally, the relevance of properly tracking climate change impact in loan operations.
Financial institutions worldwide are delving into understanding their impact on climate change due to societal demands, corporate principles, and legal requirements. Decarbonization also brings new potential business for financial institutions as it contributes to their GHG emissions reduction goals, helps them meet environmental social and governance (ESG) criteria, and assists them in addressing the growing sustainability requirements of their investors, regulatory authorities, and governments.
Energy efficiency investments are a proven mechanism of decarbonization and are usually profitable investments. In that context, measurement and verification (M&V) is a powerful management tool that increases confidence in reported energy savings by reducing uncertainty and safeguarding against potential misrepresentation. It also helps provide a solid basis for risk mitigation mechanisms in energy efficiency financial schemes such as energy savings insurance.
The white paper discusses using EVO’s International Performance Measurement and Verification Protocol (IPMVP) and the International Energy Efficiency Financing Protocol (IEEFP) to measure the decarbonization impacts of energy efficiency loans. Less known than the IPMVP, the IEEFP is a blueprint for educating credit, risk, and loan officers of local banks and other financial institutions (LFIs) around the world on the unique intricacies, benefits, and risks of energy efficiency projects (EEPs) and on the critical elements of structuring EEP loans on a low-risk, commercially-attractive basis. EVO is currently deploying globally a related training program.
EVO’s IEEFP Committee prepared the white paper. The purpose of this committee is to discuss the role of M&V tailored to project sizes in energy efficiency project financing and to recommend actions, activities, and the development of new EVO products and services. This includes creating articles, position papers, webinars, white papers, and other policy and technical documents. This committee is also responsible for maintaining the relevance of the International Energy Efficiency Financing Protocol (IEEFP) in the market and maintaining the current IEEFP training material.