We are now in the final stages of the eligibility criteria development process for Green Property (commercial and residential). We're holding this webinar to run through proposed criteria and seek feedback.
The webinar is being co-hosted with the PRI Initiative (Principles for Responsible Investment). A recording will be available for those unable to attend.
Thurs 29 May, 7am HK-Beijing, 8am Seoul-Tokyo, 9am AEDT / Wed 4pm; 28 May on the US West Coast. We hope you will join us.
To participate please RSVP to Justine Leigh-Bell - justine(at)climatebonds.net
A need for clear criteria
Green property bonds have already been issued in France, Sweden and the USA. But some investor uncertainty remains about what "hurdle rates" need to be achieved to really qualify as "green".
The International Energy Agency (IEA)’s modelling of emission reductions required to head off catastrophic climate change allocates some 40% to emissions avoided from reduced energy consumption.
Any investments directed towards energy efficiency improvements in buildings is important and should be supported, but the urgency for roll-out is driven by the need to reduce greenhouse gas emissions generated through the built environment. This will require substantial improvements of the whole building rather than just achieving any impact with modest improvements. For example, if all buildings achieve a 20% efficiency upgrade but a 40% increase is required to avoid 2 degrees, then 20% is clearly not enough. The risk is to "lock in" weak levels of performance until the next investment period which may not occur for another decade or more.
It will also require large volumes of qualifying assets. To date, energy efficiency projects have been too small to be commercially attractive to institutional investors. The average retrofit for the average commercial building is in the range of $1-10m. Therefore, aggregating energy efficiency projects into large scale opportunities will be needed and has the benefit of not only rewarding new builds but also existing assets that exemplify best in practice.
The Green Property Working Group has developed criteria for property investments eligible to be certified under the Climate Bonds Standard. The aim is to provide clarity to investors as to the low carbon integrity of energy efficiency investments.
Members of the Green Property Technical Working Group are:
- Che Wall, CEO 'Flux', former President World Green Building Council
- Oliver Rapf, Buildings Performance Institute
- Yamina Saheb, European Commission
- Peter Sweatman, Climate Strategy & Partners
- Tatiana Bosteels, Hermes Real Estate
- Maggie Comstock, US Green Building Council
- Bettina Redway, Deputy Treasurer, California State Treasurer’s Office
- Brian Rice, California State Teachers Retirement System
- Tooraj Arvajeh, Arup
- Jonathan Pressman, Markit
- Jacob Halcomb, Ecofys
- Asari Efiong, European Bank of Reconstruction and Development
- Cath Bremmer, ANZ Bank
- Bart Adams, DNV Environmental Services
- Niall McCarthy, Investor Group on Climate Change & Eureka Funds Management
- Simon Brooker, Clean Energy Finance Corporation (Australia)
The work involved in development of Green Property eligibility criteria has been kindly funded by the Bank of America Foundation, the Sainsbury Family Charitable Trusts and Flux.
