Development lenders must support the path to net zero
The nation’s leading home builders have pledged to implement a delivery plan to meet the government’s climate and emissions targets.
We argue that development finance lenders must join the sector plan to achieve broader climate, natural and environmental goals and help build sustainable and green homes.
Earlier this year, the UK’s leading home builders pledged to abide by the net zero roadmap, developed through the Future Homes task force, which includes figures from relevant residential building communities, supply chain, skills, environment, planning, education, infrastructure, utilities and regulators, and through collaboration with government.
Primarily, its goals are to provide high quality homes that are zero carbon ready, sustainable, yet healthy, safe and comfortable from 2025. Additionally, it seeks to provide consistently low emission locations and developments. carbon, rich in nature and resilient. , well designed and beautiful by 2025; net zero and sustainable production and construction methods by 2050 (with significant and visible progress by 2025 and 2030); and in-line business operations with the “race to zero” (net zero by 2050 with a 50% reduction by 2030).
However, as the UK makes its way to net zero, we have yet to see a similar commitment from the housing development finance industry as a whole. Our Loans Director, Barney Iles, explains that “there is currently no publicly recognized ESG framework, guide to best practice or checklist for the construction industry.” There are, however, a variety of ways that development finance lenders can assess the ESG credentials of the housing programs they are seeking to finance.
Net zero housing infrastructure must be delivered on a large scale, at the lowest rate and cost to maximize benefits and reduce costs to potential homeowners and taxpayers. “Tapping into ready-to-invest sources of finance from non-bank and specialist lenders will avoid further burdens on public finances, especially at a time when public finances are under pressure. Ultimately, it is essential that non-bank specialty lenders work hand in hand with the government to achieve these housing goals, ”said Barney.
At Blend Network, we actively fund green, sustainable and ESG-compliant housing programs in UK regions. However, we plan to further formalize our commitment to a sustainable lifestyle and a net zero economy by launching our new sustainability finance initiative, for which we will announce more details in the first quarter of 2022.
From the perspective of our borrowers, environmental performance and ESG benchmarks can help real estate developers improve sales or attract better tenants who are increasingly looking for efficient, healthy and certified green buildings in which to live and work. Overall, integrating ESG factors can lead to increased profitability. through higher real estate values, attracting more / better tenants and improving returns on investment.
In our view, in addition to making socially responsible or morally just decisions, the growing trend of ESG integration in companies and investors makes the need to address sustainability and societal issues increasingly important. of the construction industry. That is why our sustainability finance initiative will require that community benefits, sustainability and social initiatives be provided through the housing programs we fund. “We aim to implement best practices in sustainable development finance lending in all parts of the UK to accelerate investments,” added Barney.
In summary, as the UK prepares to meet climate goals, it is vital and urgent to align property development policies and finance to deliver the backbone of sustainable housing and infrastructure to a net zero economy. .