Ecolabel UZ 49 - Requirements for Green Loans

The 10-point action plan for sustainable finance developed by the European Commission in 2018 aims to steer capital flows towards sustainable investments. Since then, there has been a lot of movement in the financial sector, with comprehensive legislative projects being launched such as the EU Taxonomy, the EU Disclosure Regulation and other important regulations. The EU taxonomy is a classification system that uniformly determines which economic activities are considered environmentally sound. Work is also being done on EU-wide uniform labels for green financial products and green bonds. This system should make it easier for investors to identify and invest in climate-friendly and sustainable investments.

In Austria, there have been activities and products for many years that serve as good examples and models for other countries. The Austrian Ecolabel, which has been awarded to financial products since 2004 and is thus regarded as the oldest (sustainable) financial label in Europe, should certainly be seen in this context. Among investors in Austria, the UZ 49 guideline has already been established for many years as a standard and valuable orientation aid for sustainable financial products. As current market figures show, not only the volume of sustainable financial products but also the number of certified products is continuously increasing.

In order to take current market developments into account, the UZ 49 guideline is revised every four years. This year, another revision is on the agenda. To this end, an extensive dialogue is being launched in order to incorporate the expertise of stakeholders into the revision. Currently, it is planned to include green loans as a new product group in the guideline and thus make them certifiable. Both sustainable giro and savings products as well as green bonds can already be awarded the Ecolabel since 2020. It therefore makes sense to also develop criteria for green loans.

In this context, a first webinar was held on 20 February with selected experts to discuss expectations and challenges in the labelling of green loans. The online event was organised by ÖGUT - Austrian Society for Environment and Technology on behalf of the Ministry of Climate Protection and in cooperation with VKI - Team Ecolabel.

So what are green credits?

Green loans are defined as all types of loan instruments that are provided exclusively to finance (or refinance) new and/or existing suitable green projects. It is to be expected that banks will increasingly deal with this topic, as sustainability criteria will also be queried when granting loans in the future and loans will also be assessed according to their "taxonomy conformity".

During the webinar, the participants addressed the question of how exclusion criteria can be applied to green loans. Another question dealt with the possibility of a mandatory external validation of green loans, analogous to a second party opinion for green bonds. Furthermore, the relation to the taxonomy in the Ecolabel was discussed.

The results of the webinar will be incorporated into the revision of UZ 49. The VKI - Association for Consumer Information and the Ministry of Climate Protection will contact all stakeholders at an early stage in order to identify further possibilities for involvement in the revision of the directive.

Susanne Hasenhüttl, ÖGUT