Buildings account for 40% of global emissions, and the International Energy Agency (IEA) warns the sector is not on track to limit global warming to 1.5°C.
Rapid investment in green building solutions is essential. Fortunately, existing technologies can quickly decarbonise both new and renovated buildings.
What are the Buildings Criteria?
The Buildings Criteria define what qualifies as a green building investment under Climate Bonds Certification. They cover three key areas:
Commercial Buildings
Residential Buildings
Upgrade Projects
To achieve Certification, building owners must demonstrate that the financed buildings follow a zero-carbon trajectory. This is determined using a baseline emission intensity target, representing the top 15% of building performance in a given city or typology. We apply our Extrapolation Methodology to establish these trajectories globally.
Key milestones
In 2023, the Criteria were expanded to include New Buildings, bringing significant advancements:
Greater clarity for investors.
Integration of technological innovations.
Coverage of a broader range of building types.
Alignment with the EU Taxonomy for sustainable finance.
Building code Australia (BCA) 2013 Within the context of RMBS transactions in Australia, Maximum Weighted Average Life can be substituted for Maximum Tenor
Building code Australia (BCA) 2011 Within the context of RMBS transactions in Australia, Maximum Weighted Average Life can be substituted for Maximum Tenor
Residential buildings in Hungary are eligible for certification if their specific primary energy consumption (Fajlagos Primer Energiafogyasztás) published on an Energy Performance Certificate (Energetikai tanúsítvány) dated after Jan 1 2016, lies below the hurdle rate established for the midpoint of the term of the bond.
House or Apartment meeting trajectory requirements for CO2 emissions as shown on BER certificates.
New buildings constructed after 2015 are automatically eligible if the mid-point of the bond term is no later than 2032.
Upgrade and retrofit of asset: minimum 30% reduction in CO2 emissions, depending on tenor of bond, based on reduction in the CO2 emission figure from BER certificates.
Ecocasa-certified residential buildings that achieve a minimum of 20% reduction in CO2e emissions against the baseline, measured using the DEEVi tool. The version of Ecocasa elegible is the current version as of 1 June 2020.
The tenor of the bond is to be a maximum of 10 years.
Post 2012: Dutch Building Decree 2012 & Netherland Normalisation Institute (NEN) 7120 standard ---------- Pre 2012: Energy Performance Certificate (EPC) Rating A
----------
Upgrade and Retrofit: Improvement of at least two EPC levels to at least C. Ie E > C, D > B, or C > A, correspond to at least 30% reduction in CO2 emissions
Assets meeting trajectory requirements for primary energy demand Assets qualified by year of construction (TC2017/2021) Upgrade and retrofit of asset: 30-50% improvement in CO2 emissions, depending on tenor of bond, based on reduction in the CO2 emission figure from EPCs from before and after the retrofit, which meet the requirement of Technical Note 2014 (issued after July 2015)
New and refurbished residential buildings complying with SANS10400-XA standard
Spain
Catalonia
House or apartment
Residential buildings in Catalonia are eligible for certification if their carbon intensity (Emissiones de CO2) published on an Energy Performance Certificate (EPC) (Qualificació Energètica) lies below the hurdle rate established for the midpoint of the term of the bond. See emissions calculator below.
3 standards: Minergie A, Minergie P and Minergie. There is a minimum threshold that must be met for all requirements. It has not yet been determined how long the proxy would be valid for, however it is currently acceptable for a default maximum tenor of 10 years. All certified buildings are to meet a minimum index. (See PDF).
Environmental Impact (EI) rating of A or B or Emissions Intensity Target Dependent on the Tenor of the Bond as part of the Energy Performance Certificate programme
Multifamily housing: NYSERDA’s relevant programs (e.g. the New Construction - Housing (NC-Housing) Program) or one of New York State Homes and Community Renewal’s Clean Energy Incentive offerings.
1. Tier 3 NC-Housing
2. Carbon Neutral Ready + Health NC-Housing
Additionally, any building constructed after December 2022 must not use fossil fuels for heating, hot water, cooking or on-site electricity generation other than back-up power requirements.
LEED Gold OR Platinum TOGETHER WITH 30% improvement above the levels in ASHRAE 90.1
Only able to be used where a local proxy has not been established
10 year limit on bond tenor. Date of LEED certification must be within 5 years before bond issuance
International
International
EDGE certified
Only able to be used in developing countries. 10 year limit on bond tenor
International
International
Net Zero subject to confirmation of local country schemes
International
International
Living Building Challenge Certified
For locations where buildings emissions performance data does not exist, or is too limited to be representative of the market, the Low Carbon Building Criteria Technical Working Group has established a series of proxies. These proxies undergo extensive reviews to ensure that they are representative of buildings in-line with a zero-carbon building sector in 2050.
For issuers looking to use locally available tools, rating systems, or performance schemes as proxies for meeting the Low-Carbon Building Standard, see the Proxy Methodology document for additional guidance.
Please note if you would propose for the Certification to use a building code or rating system from your building, which is not listed in this table, then it may take the Working Group up to two weeks to evaluate whether the proposed code / system may be used for Certification.
Location Specific Criteria for Residential Buildings & Calculator
Country
State
State/Sub Category
Proxy
Brochure
Australia
New South Wales
Single & multifamily
BASIX Energy 40 Within the context of RMBS transactions in Australia, Maximum Weighted Average Life can be substituted for Maximum Tenor
Building code Australia (BCA) 2013 Within the context of RMBS transactions in Australia, Maximum Weighted Average Life can be substituted for Maximum Tenor
Building code Australia (BCA) 2011 Within the context of RMBS transactions in Australia, Maximum Weighted Average Life can be substituted for Maximum Tenor
Residential buildings in Hungary are eligible for certification if their specific primary energy consumption (Fajlagos Primer Energiafogyasztás) published on an Energy Performance Certificate (Energetikai tanúsítvány) dated after Jan 1 2016, lies below the hurdle rate established for the midpoint of the term of the bond.
House or Apartment meeting trajectory requirements for CO2 emissions as shown on BER certificates.
New buildings constructed after 2015 are automatically eligible if the mid-point of the bond term is no later than 2032.
Upgrade and retrofit of asset: minimum 30% reduction in CO2 emissions, depending on tenor of bond, based on reduction in the CO2 emission figure from BER certificates.
Ecocasa-certified residential buildings that achieve a minimum of 20% reduction in CO2e emissions against the baseline, measured using the DEEVi tool. The version of Ecocasa elegible is the current version as of 1 June 2020.
The tenor of the bond is to be a maximum of 10 years.
Netherlands
Country wide
Single & multifamily
Post 2012: Dutch Building Decree 2012 & Netherland Normalisation Institute (NEN) 7120 standard ---------- Pre 2012: Energy Performance Certificate (EPC) Rating A
----------
Upgrade and Retrofit: Improvement of at least two EPC levels to at least C. Ie E > C, D > B, or C > A, correspond to at least 30% reduction in CO2 emissions
Assets meeting trajectory requirements for primary energy demand Assets qualified by year of construction (TC2017/2021) Upgrade and retrofit of asset: 30-50% improvement in CO2 emissions, depending on tenor of bond, based on reduction in the CO2 emission figure from EPCs from before and after the retrofit, which meet the requirement of Technical Note 2014 (issued after July 2015)
New and refurbished residential buildings complying with SANS10400-XA standard
Spain
Catalonia
House or apartment
Residential buildings in Catalonia are eligible for certification if their carbon intensity (Emissiones de CO2) published on an Energy Performance Certificate (EPC) (Qualificació Energètica) lies below the hurdle rate established for the midpoint of the term of the bond. See emissions calculator below.
3 standards: Minergie A, Minergie P and Minergie. There is a minimum threshold that must be met for all requirements. It has not yet been determined how long the proxy would be valid for, however it is currently acceptable for a default maximum tenor of 10 years. All certified buildings are to meet a minimum index. (See PDF).
Environmental Impact (EI) rating of A or B or Emissions Intensity Target Dependent on the Tenor of the Bond as part of the Energy Performance Certificate programme
Multifamily housing: NYSERDA’s relevant programs (e.g. the New Construction - Housing (NC-Housing) Program) or one of New York State Homes and Community Renewal’s Clean Energy Incentive offerings.
1. Tier 3 NC-Housing
2. Carbon Neutral Ready + Health NC-Housing
Additionally, any building constructed after December 2022 must not use fossil fuels for heating, hot water, cooking or on-site electricity generation other than back-up power requirements.
LEED Gold OR Platinum TOGETHER WITH 30% improvement above the levels in ASHRAE 90.1
Only able to be used where a local proxy has not been established
10 year limit on bond tenor. Date of LEED certification must be within 5 years before bond issuance
International
International
EDGE certified
Only able to be used in developing countries. 10 year limit on bond tenor
International
International
Net Zero subject to confirmation of local country schemes
International
International
Living Building Challenge Certified
For locations where buildings emissions performance data does not exist, or is too limited to be representative of the market, the Low Carbon Building Criteria Technical Working Group has established a series of proxies. These proxies undergo extensive reviews to ensure that they are representative of buildings in-line with a zero-carbon building sector in 2050.
For issuers looking to use locally available tools, rating systems, or performance schemes as proxies for meeting the Low-Carbon Building Standard, see the Proxy Methodology document for additional guidance.
Please note if you would propose for the Certification to use a building code or rating system from your building, which is not listed in this table, then it may take the Working Group up to two weeks to evaluate whether the proposed code / system may be used for Certification.
The tool calculates the performance target based on three factors:
the city’s baseline performance (the top 15% of the market),
the year the bond is issued, and
the term of the bond.
The first factor is based on data Climate Bonds has collected while the second and third factors are set by the user by sliding the two buttons along the bar at the bottom of the horizontal axis of the chart.
The user can view the city’s baseline performance by hovering over the starting point of the 2050 zero-carbon trajectory line on the chart.
Climate Bonds would like to thank Flux(link is external) for their support without which this body of work would not have been possible.
Trajectory Calculator
The tool calculates the performance (i.e. carbon intensity) target a property asset should achieve in order to be eligible for Climate Bonds certification under the Residential Property criteria and the Commercial Property CO2 Target Calculator.
The tool calculates the performance target based on three factors:
the city’s baseline performance (the top 15% of the market),
the year the bond is issued, and
the term of the bond.
The first factor is based on data Climate Bonds has collected while the second and third factors are set by the user by sliding the two buttons along the bar at the bottom of the horizontal axis of the chart.
The user can view the city’s baseline performance by hovering over the starting point of the 2050 zero-carbon trajectory line on the chart.
