From net zero to green mortgages: Building sector steps up decarbonisation drive

UK Green Building Council launches Advancing Net Zero programme to eliminate emissions from buildings, as BNP Paribas and E.ON debut green mortgage offer.

The London offices of the UK Green Building Council | Credit: UKGBC

Some of the UK’s largest construction and property businesses have teamed up to eliminate carbon emissions from the building sector, under a new initiative launched today from the UK Green Building Council (GBC).

The Advancing Net Zero scheme is part of a global Net Zero Carbon Commitment campaign from the World Green Building Council, to encourage building and property firms to cut emissions to net zero by mid-century.

The UK arm of the initiative, which was officially launched today, will harness a task force of industry members to develop a definition for net zero buildings in the UK market and agree proposals to strengthen building standards. It is supported by real estate investment management company Redevco Foundation, construction firm BAM, developer Berkeley Group, and engineering firm Hoare Lea.

“This programme represents a new chapter in decarbonising our built environment,” said Richard Twinn, senior policy advisor at UKGBC. “There will be no more tinkering around the edges; those involved in the programme and the associated commitment will be leading the way in decarbonising our buildings and infrastructure.”

Emissions from buildings account for around 37 per cent of total greenhouse gas emissions from the UK, a figure that will need to fall dramatically over the coming decades for the UK to meet its binding emission reduction targets.

The GBC argues emissions from buildings worldwide will need to fall to net zero by 2050 to align with targets to limit warming to 1.5C, as set out in the Paris Agreement.

Support is building towards the new goal in light of the IPCC report last week. UK developer Bruntwood today promised to reach net zero operating emissions in its portfolios by 2030, the first commercial property partner to make such a pledge.

“Although sustainability has always been a huge part of our approach, this pledge represents a step change in our efforts to reduce our environmental impact and we hope to inspire, encourage and support others to do the same,” said Bev Taylor, director of energy and environment at Bruntwood.

At the same time efforts to make greener homes more attractive to buyers are gaining ground. Yesterday banking giant BNP Paribas announced a new partnership with energy supplier E.ON to develop and pilot a ‘Green Mortgage’ product which will allow homeowners to use their mortgage to borrow a further loan to fund energy efficiency improvement works to their property.

BNP Paribas Personal Finance would provide the improvement loan financing and E.ON would deliver a managed service to install the most effective energy efficient improvement measures for each property.

The idea builds on other green mortgage schemes on the market, which mainly offer buyers a cheaper interest rate on their mortgage if they opt to purchase a more energy efficient new build home.

Experts have warned that UK carbon targets can only be met if the UK significantly improves the energy efficiency of is building stock. More than 70 per cent of existing UK homes have an energy efficiency rating of ‘C’ or below, leading to higher bills for homeowners and pushing up carbon emissions. Installing energy efficiency measures such as insulation and double glazing is one of the most cost-effective ways to tackle this issue, experts agree, but meeting the upfront cost of such work is often a major sticking point for homeowners.

“We need to find ways to radically increase interest and action on energy efficiency in homes, but property owners often face a significant financing barrier when wishing to do so,” said Michael Lewis, CEO of E.ON UK. “In the UK, attempts have been made in the past to tackle this barrier through schemes like the Green Deal, but they have not been successful, in part because they weren’t designed with the customer front and centre.

“Green mortgages have the potential to be a game changer in the delivery of affordable finance and we are ready to meet the challenge for home-owners motivated to take the step into energy efficient living. Our agreement with BNP Paribas Personal Finance is a further step along this journey and brings together two well-known international companies with expertise in financing and delivering energy saving solutions across Europe.”

BNP Paribas and E.ON added that the improvements funded through the loan scheme could also result in a cheaper mortgage rate once a home has been assessed to measure any improvements to its energy efficiency.

Madeleine Cuff / BusinessGreen