Best practice example: Mortgages

De Volksbank mortgages

De Volksbank provides about 290,000 mortgages, primarily in the Netherlands, through its brands ASN Bank, BLG, RegioBank and SNS. The mortgage portfolio comprises about 46 billion euro of assets on de Volksbank balance sheet, which is about 80% of assets under management.

“Our long-term goal is to become climate neutral by 2030 if avoided emissions are equal or larger than the emissions resulting from the activities we finance. At year end 2020 we aim to be 45% climate neutral,” says Freek Geurts, Climate impact advisor at de Volksbank. “After a materiality analysis three asset classes appeared to have the biggest influence on our climate neutral balance sheet: mortgages, project finance and green bonds. Mortgages are at the core of the Volksbank’s business model and comprise almost 80% of our financial balance. The complete mortgage portfolio also lead to 80% of total financed emissions.”

To achieve a climate neutral balance sheet, KPI’s on absolute emissions are formulated for mortgages, project finance and green bonds, and are included in the operational plans of the involved business units. The progress is monitored quarterly, and the results are published biannually. The opportunities and dilemmas are discussed within the climate neutral committee with chairmanship of the CFO of de Volksbank, who bears responsibility for the long-term goal. De Volksbank’s climate neutrality has improved from 16% at the end of 2014 to 33% halfway through 2018.

All households in the Netherlands have an indicative energy label based on general information that the authorities have about your home, such as the type of building, floor area and the year of construction. Home owners can request a definitive energy label for their house which is a more reliable measure of the energy performance of houses. The Netherlands Enterprise Agency (RVO) registers all indicative and definitive energy labels within the Netherlands.

On a quarterly basis, the RVO energy label database is matched on addresses to the mortgage portfolio of de Volksbank. About 25% of matched addresses has a definitive energy label. If no definitive energy label is present, the provisional label is linked to a household. There is a small portion of the mortgage portfolio for which no energy label exists, like monuments, or the match could not be made due to data quality issues, for instance due to differences in suffix notation in addresses. For this small portion, the same composition of energy labels is assumed as for the rest of the mortgage portfolio.

The average gas and electricity consumption per energy label were researched in the WoON2012 report and published in ‘Cijfers over wonen en bouwen 2013’, a report by Rijksoverheid summarizing the state of housing in the Netherlands. The average consumption per energy label can be converted to CO2-emissions by multiplying with emission factors from www.co2emissiefactoren.nl. This is 1,791 kg CO2/m3 for natural gas and 0,361 kg CO2/kWh for electricity of unknown origin (both TTW value).

The average gas and electricity consumption per energy label were researched in the WoON2012 report and published in ‘Cijfers over wonen en bouwen 2013’, a report by Rijksoverheid summarizing the state of housing in the Netherlands. The average consumption per energy label can be converted to CO2-emissions by multiplying with emission factors from www.co2emissiefactoren.nl. This is 1,791 kg CO2/m3 for natural gas and 0,361 kg CO2/kWh for electricity of unknown origin (both TTW value).

The portfolio emissions are calculated by multiplying the number of houses per energy label with the average CO2-emissions per energy label. This was 1181 ktonne CO2-emissions for Q2 2018.

The portfolio emissions are calculated by multiplying the number of houses per energy label with the average CO2-emissions per energy label. This was 1181 ktonne CO2-emissions for Q2 2018.

Aside from absolute and relative emissions, de Volksbank also monitors the average energy label of the mortgage portfolio. The average label is calculated by converted energy labels A through G to consecutive numbers 1 through 7 and taking the weighted average for the whole mortgage portfolio. This meant a 3,8 or average energy label D for Q2 2018.

Aside from absolute and relative emissions, de Volksbank also monitors the average energy label of the mortgage portfolio. The average label is calculated by converted energy labels A through G to consecutive numbers 1 through 7 and taking the weighted average for the whole mortgage portfolio. This meant a 3,8 or average energy label D for Q2 2018.