“These emissions performance trajectories are an important step for our industry, as Australian building owners and investors need confidence that their investment decisions are in line with a pathway towards zero carbon.”
Jorge Chapa, Green Building Council of Australia (GBCA)
Investing towards Zero Carbon by 2050
Property bond issuers and investors now have a simple, robust process to assess whether office buildings, proposed developments or retrofits in Australia’s biggest commercial property markets are eligible for certification against the Climate Bonds Low Carbon Building (LCB) Criteria, following the release of cities based emissions performance trajectories.
These trajectories have been set by examining the emissions performance of the top 15% of office buildings in each major market, and then determining the trajectory required to achieve zero emissions by 2050. Due to this downward trajectory, the emissions performance targets for each bond will vary according to when it is issued and the bond term.
Certification using the baselines complements the certification pathway available to issuers through significant office upgrades and retrofits.
CBDP data with project support from NAB
Climate Bonds Initiative used building emissions performance data sourced from the Commercial Building Disclosure Program (CBDP) – an Australian Government initiative which requires sellers and lessors of commercial buildings to disclose information on building energy efficiency.
National Australia Bank (NAB) kindly provided all project funding for overall data gathering and analysis.
Which cities, which markets?
The emissions performance trajectories cover commercial offices in six major Australian markets: Sydney, Melbourne, Brisbane, Adelaide, Perth and Canberra.
How does it all work?
For an individual property bond to qualify for Climate Bonds Certification, the emissions performance targets will vary according to when the bond is issued and the term of the bond.
These targets are derived from the emissions performance trajectories developed by Climate Bonds Initiative, which are drawn from the initial baseline emissions performance of the top 15% of buildings in a city, before declining to zero emissions by 2050.
Sounds complicated…..
It’s pretty simple. There’s an easy-to-use CO2 Target Calculator on our website to enable issuers to ascertain the emissions performance targets that must be satisfied in order to gain Climate Bonds Certification. Additional information is here.
Who’s saying what?
Jorge Chapa, Green Building Council of Australia, Executive Director of Market Transformation:
“Investors can invest in certified Climate Bonds knowing they are funding green building projects that will meet global climate change targets.”
“These emissions performance trajectories are an important step for our industry, as Australian building owners and investors need confidence that their investment decisions are in line with a pathway towards zero carbon.”
“Climate Bonds Initiative provides a simple methodology for building owners to demonstrate to investors and occupants that they are taking action on climate change.”
Ché Wall, Director, Flux Consultants and LCB Technical Working Group Lead Specialist:
“The release of these emissions performance trajectories means property bond issuers have a straightforward means to assess the performance of buildings and portfolios against current and future expectations.”
“Institutional investors and asset managers now have a robust, evidence-based screening tool and green assurance mechanism to help guide property investment decisions.”
Sean Kidney, CEO, Climate Bonds Initiative:
“Release of these emissions performance trajectories should spur green property development in the commercial heart of Australia’s major cities, contributing to local and national emissions reduction targets.”
“Bond issuers have a simplified process to evaluate building performance. Investors now have a transparent certification scheme that has continuous improvement in emissions performance of commercial buildings as its goal.”
Have any green property bonds been issued already? What about in Australia?
In June 2015 ABN Amro was the first organisation to issue a green bond that included certification for commercial property under the Low Carbon Building Criteria.
Recently-certified Australian green bonds incorporating the LCB Criteria include:
- ANZ, May 2015, A$600m (Multisector Green Bond)
- Westpac, May 2016, A$500m (Multisector Green Bond)
- Treasury Corporation of Victoria (TCV), July 2016, A$300m (Multisector Green Bond)
Where can I find out more?
The Climate Bonds website has detailed information on the Low Carbon Building Criteria.
Or simply contact our Australian based Head of Certification Rob Fowler.
The Last Word - US cities next
Baselines are available for Singapore and for major US cities where there are mandatory building performance disclosure schemes including Boston, Chicago, Minneapolis, New York, Philadelphia, San Francisco and Washington D.C.
Climate Bonds will be seeking to raise awareness in the US, working with our international and US based partner organisations in the green property space.
Stay tuned.
Disclaimer: The information contained in this communication does not constitute investment advice and the Climate Bonds Initiative is not an investment adviser. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites.
The Climate Bonds Initiative is not advising on the merits or otherwise of any investment. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind for investments any individual or organisation makes, nor for investments made by third parties on behalf of an individual or organisation.
