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Ecological ESG Pfandbrief for green property loans

Investors have been given the opportunity to invest in green property financing through the ecological ESG Pfandbrief of MünchenerHyp. We discussed the background and details of this service with Sustainability Manager at MünchenerHyp, Dr Johanna Dichtl.

Dr. Johanna Dichtl
Ms Dichtl, why did MünchenerHyp opt to issue an ecological Pfandbrief?

Firstly, investors explicitly requested such an investment. Secondly, MünchenerHyp also wanted to actively contribute to the goal of the United Nations to make energy clean and affordable and improve energy efficiency further. We introduced the Green Loan for particularly energy-efficient private properties several years ago. By issuing a ecological Pfandbrief, we have now concluded our sustainability cycle from sustainable property financing and sustainable refinancing.

What are the requirements for getting a green loan for property financing?

For residential properties, the annual primary energy requirement may not exceed 70 kilowatt hours per square meter. This can be proven by an energy certificate or the confirmation from an energy consultant. Once these conditions are met, the customer will be rewarded with an interest discount.
Regardless of this, when it comes to loans for private individuals, we also always take social aspects into account, as we care about dealing with private customers in a responsible manner.

What is the situation in commercial property financing? With regard to Pfandbrief issues, do you preferably finance energy-efficient commercial real estate?

Of course, we also pay attention to the corresponding environmental certificates for the financing of commercial properties.

And how is that related to the ecological Pfandbrief?

The loans are identified in an internal process as qualified for the ecological Pfandbrief - and then we know what cover funds are available and how many we can issue. The data is checked on an annual basis.

What is special about the ecological ESG Pfandbrief then?

Firstly, the mix of private retail business via the Green Loans is unique and secondly the sustainability-certified commercial loans. We are talking about a total of more than 1,600 individual loans, which, in contrast to other services, are not just a purely commercial portfolio. This is also very well received on the market. The issue of the Pfandbrief last autumn was oversubscribed several times, and we also noticed that it attracted many new investors.

What is an ESG Pfandbrief?

ESG stands for environment social governance (environment, social, corporate governance) and means that these aspects are taken into account in business decisions and products. Thus, the ESG Pfandbrief of MünchenerHyp is a sustainable Pfandbrief. In 2014, MünchenerHyp was the first bank in the world to issue an ESG Pfandbrief which was used to refinance housing cooperatives. That was an innovation on the financial market at that time. The ESG Pfandbrief was primarily aimed at social aspects and can be described as a social bond today.

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