The €409bn Dutch civil service scheme ABP has committed €500m to “green mortgages”, which come with a discount for energy-efficient residential property.
The discount would not only apply to purchased assets with the highest energy efficiency, but also to the mortgaged property after it has been converted to meet the requirements of energy label ‘A’ during the duration of the mortgage.
This way, both parties would contribute to improving the green credentials of the property market, ABP said.
The pension fund added that its investment would be managed by Vista Hypotheken, a mortgage subsidiary of Rabobank focusing on consumers seeking clear and simple conditions combined with a long fixed interest period.
Vista clients would be provided with easily accessible information about the options for increasing the sustainability of their property through sustainability adviser GreenHome.
ABP said the investment was part of an overall commitment to allocate up to €800m in mortgages through Vista Hypotheken.
Its combined worldwide holdings of residential mortgages total €9bn, €4bn which has been invested in the Netherlands.
The civil service scheme said its latest commitment was part of its goal to increase the sustainability of its mortgages, and also contributed to its target of investing €58bn in total in sustainable development by 2020.
Hikmet Sevdican, director of Vista, said that the energy efficiency discount made the mortgages stand out to institutional investors seeking investments focused on returns as well as sustainability.
Rabobank launched Vista Hypotheken as a new brand for residential mortgages provided through intermediaries last April.
ABP said that APG, its asset manager, had reserved €1bn in total for ABP and its other pension fund clients to invest in Vista Hypotheken, half of which was destined for sustainable mortgages.
IPE will publish a special report on green finance in February’s issue of the magazine