Technical Working Group to analyse international developments in sustainable building to drive evolution of sector based investor-screening tool.
What’s it all about?
The Climate Bonds Low Carbon Buildings Technical Working Group (TWG) is reconvening to expand the reach of the ground breaking Low Carbon Buildings Criteria (LCBC) for investors, originally launched in 2014.
The Technical Working Group will be analysing international developments in sustainable building standards and building energy performance data to drive evolution of the LCBC.
The LCBC is a sector based investor-screening tool that applies emissions performance criteria to commercial and residential buildings and upgrade/retrofits.
Expanded Technical Working Group
The Technical Working Group has expanded its membership to include new representation from BRE Group, Better Buildings Partnership, Geophy, Environmental Defense Fund’s Investor Confidence Project, and UNEP Finance Initiative.
More TWG information and member biographies are available here.
TWG Members
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Investor Confidence Project |
Hermes Real Estate |
Better Buildings Partnership |
Clean Energy Finance Corporation |
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UNEP Finance Initiative |
International Energy Agency |
International Finance Corporation |
thinkstep |
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Observatoire de l'Immobilier Durable |
Buildings Performance Institute Europe |
Environmental Defense Fund |
Climate Strategy & Partners |
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Geophy |
Flux Consultants |
BRE Group |
European Commission |
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European Commission |
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Tell me more about the Low Carbon Buildings Criteria?
The LCBC is a sector based investor-screening tool that applies emissions performance criteria to assess whether green bonds issued to fund commercial and residential buildings and upgrade/retrofits deliver a robust level of environmental performance and qualify for Climate Bonds Certification.
How does it work?
The Low Carbon Buildings criteria sets out what property assets are eligible for certification under the Climate Bonds Standard and covers three different types of property assets:
- Commercial buildings: Buildings must be in the top 15% of their city in terms of emissions performance. This “hurdle rate” in emissions terms ratchets down to zero (carbon) in 2050.
- Residential buildings: Existing instruments such as local building codes, energy rating schemes (e.g. US Energy Star) and energy labelling schemes (e.g. Energy Performance Certificates in the UK) are leveraged as proxies for the achievement of the 15% hurdle rate.
- Upgrade projects: Building improvements that achieve emission reductions of 30% to 50% (depending on the bond term) from a business-as-usual baseline will qualify for certification.
Australia first to certify under the Standard
The first green bond certified under Low Carbon Buildings was issued by the ANZ Bank in May 2015, with proceeds of A$600m allocated to green buildings, wind energy and solar energy loans in Australia, New Zealand and parts of Asia.
This was followed by ABN AMRO who issued a certified €500m bond in June 2015.
More are in the pipeline.
Remind me about the role of Technical Working Groups?
TWGs comprise experts from academia, international agencies, industry and NGOs to develop eligibility criteria in each low-carbon investment sector (e.g. solar, wind, low carbon buildings, low carbon transport, etc.).
Once sector criteria have been established, each sector-specific TWG will convene regularly to review market developments and identify opportunities to strengthen the criteria and expand its application.
The built environment, who’s saying what?
Director, Environmental Defense Fund’s Investor Confidence Project Europe, Panama Bartholomy:
“Trust in environmental and financial results is essential to mobilizing capital for energy efficiency retrofits at the scale needed to turn the corner on climate change.”
“We look forward to working with the Climate Bonds Initiative to ensure that investment in building projects deliver on their potential to increase savings and cut pollution.”
Energy Analyst, IEA, John Dulac:
“The energy savings potential in the global buildings sector is massive. Capturing this potential would deliver a large range of benefits, not least of which is the critical reduction of energy-related carbon emissions and other pollutants that pose a threat to human health. “
“Action is needed today to promote building energy efficiency measures, and financing of highly efficient, low-carbon building projects is an important step forward to ensure that those measures become standard practice across the global buildings market.”
Special Advisor Long Term Finance and Energy Efficiency Coordinator, UNEP Finance Initiative, Annie Degen-Neuville:
“Buildings account for about one third of the global energy consumption and GHG emissions, and the IEA stresses the global importance of energy efficiency as it represents 49% of all measures to stay under 2°C.”
“UNEP FI is pleased to support the reconvening of the LCB TWG. With so much expertise and good will this TWG will certainly help connect the urgent investment needs in the low carbon economy with the investor community’s requirements to develop responsible investments at the scale needed.”
What’s Next?
The TWG will next meet in May 2016 and then on a bi-monthly basis.
Further developments will be advised by Climate Bonds.
The Last Word:
CEO Sean Kidney:
“Lowering the carbon intensity of the built environment in both newer and the more established cities and urban areas needs accelerated investment, particularly to assist nations to meet their INDC targets.”
“The Low Carbon Buildings TWG will look to adapt the Standard to take into account the latest developments in low carbon and sustainable building assessment. This will provide additional guidance for investors seeking to make significant financial commitments in green bonds that fund low carbon building projects.”
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