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FINANCING THE TRANSITION: HARNESSING EU SECURITISATION REFORM TO DECARBONISE BUILDINGS, EMPOWER SMES, AND TRANSFORM TRANSPORT

  • Financing the Transition: Harnessing EU Securitisation Reform to Decarbonise Buildings, Empower SMEs, and Transform Transport

    By Joshua Brady and Peter Sweatman
    Published in May 2026

    The European Commission’s June 2025 proposals on securitisation reform come at a critical moment for the European Union’s climate and financial integration priorities. Delivering the European Green Deal and advancing the Banking and Savings Union will require financial markets that can mobilise capital at scale. Securitisation can play an important role in meeting this need — provided it evolves to support greater transparency, stronger standardisation, and alignment with Europe’s decarbonisation goals.

    Europe faces a significant investment gap in the years ahead. Large-scale funding will be required to finance the energy transition, accelerate building renovation, and modernise industry. At the same time, Europe’s financial system remains fragmented and heavily reliant on banks. This creates a structural limitation: the pace of new lending is closely linked to banks’ balance sheet capacity.

    Securitisation is increasingly recognised as a strategic tool to strengthen capital markets and unlock additional financing. By transferring risk from banks to capital market investors, it allows institutions to recycle capital, expand lending, and potentially lower funding costs. Initiatives such as the Operator Securitisation Facility demonstrate how securitisation can mobilise investment for energy infrastructure. To deliver results at scale, investors will require transparent, comparable data, including robust information on climate-related risks and performance.

This report examines how targeted improvements to disclosure can support this objective and sets out Climate Strategy Partners’ recommendations on how the framework should evolve across three core asset classes.

Climate Strategy’s briefing outlines four core building blocks for a strategic, efficient, and climate-aligned MFF:

  1. Real estate securitisations:
    Mortgage debt dominates household liabilities, yet energy performance data remain largely absent from mortgage-backed securities. Mandatory EPC disclosure would improve transparency, support better investment decisions, and incentivise energy-efficient housing. Embedding EPC data in securitisation could accelerate building renovation, strengthen household finances, enhance living conditions, and support climate risk integration.
  2. Vehicle securitisations:
    Transport is a major EU emitter, yet transport ABS lack standardised emissions data. Harmonised disclosure would improve transparency, support investor decisions, enable portfolio differentiation, and align financing with EU climate and regulatory targets.
  3. 3. SME securitisations:
    SMEs dominate EU businesses but face costly, fragmented financing. Standardising securitisation documentation and simplifying requirements could reduce costs, broaden investor access, and strengthen capital markets’ role in supporting SME growth.

Milestones include:

On May 4th 2026, CS presented the report in the Brussels event “Mobilising Private Capital for Affordable Building Renovation: The Role of Securitisation in Buildings”, co-organised by the Renovate Europe Campaign, and the IIGCC.

Prepared by: