01 - 03 March 2022 | ExCeL, London

01 - 03 March 2022 | ExCeL, London

Unlocking the built environment’s gateway to green finance

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In last weeks edition of The Sunday Times (7 November 2021) BRE’s Head of building performance services Dr Shamir Ghumra, discussed how following the recent spike in gas prices, real estate investors and lenders are increasingly scrutinising the resiliency of their portfolios to the potential impacts of climate change. That backdrop is prompting property owners to look at ways to make their buildings greener, particularly by focusing on resource efficiency – through reducing waste or cutting energy use – and using data and technology to optimise how those buildings are used and occupied. This rush to improve the energy efficiency of buildings means property developers and home owners are increasingly turning to green finance to bankroll projects. At the same time, investors and lenders require reliable data to verify that the money is being deployed according to the terms agreed. For instance, green bonds and green mortgages are typically used to finance specific projects, whereas sustainability-linked loans can be used for broader purposes on the condition that predetermined sustainability targets are met. This underscores the need for robust data. Take Lloyds Bank. In September it launched a green commercial mortgage product for its large real estate clients. This complements its existing sustainable development loan programme, both of which offer cheaper loan rates if the borrower’s buildings or developments meet certain environmental, social and governance (ESG) criteria. In other words, using a certification scheme like BREEAM can help borrowers unlock access to a greater range of green financing options, while giving investors the confidence that the underlying data is sound. The rapid growth of the wider ESG market is also making it harder for investors to make sense of the abundance of green products that are now available.

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