Sustainable approaches for retrofitting buildings for energy efficiency are becoming necessary in a time when the building sector is the largest energy consumer. Retrofitting building stock is effective for reducing global energy consumption and decreasing resource exploitation. Less developed EU member states and neighboring developing countries show reluctance towards healthy and renewable materials. Implementation of sustainable materials for energy retrofitting is slowed down due to gaps in legislation and effective strategic programs, availability of bio-based materials, lack of knowledge regarding use and maintenance of renewable products, and marketing lobbies. Use of bio-based materials in refurbishment is important due to their negative or low global warming potential (GWP), low primary energy (PEI) need for production, cost-effective benefits, and recycling/reuse potential. Role of environmentally friendly solutions and low-carbon economy growth is particularly relevant in developing countries, such as Bosnia-Herzegovina, that cannot afford innovative energy recovery systems, yet possess a significant amount of poorly managed building stock. This research aims to analyze frameworks regarding retrofitting of residential buildings in Bosnia-Herzegovina and Slovenia. The analysis tackles indirect causes, studies the legal background, and examines strategic frameworks; thus, it indicates potential barriers for implementation of recommended retrofitting solutions based on renewable materials.