Low Carbon Buildings: CBI Expands Certifications: More Cities - More Markets: Commercial, Residential & Retrofits: New Proxies and Trajectories Available for Investors

Photo: Climate Bonds Initiative

Certification opportunities available for green issuers: Multiple cities, multiple markets:

Commercial, Residential and Upgrades: Greening building investment

Goal of Net Zero by 2050

Expanded jurisdictions for Certification

Our Low Carbon Buildings (LCB) Criteria cover both Commercial and Residential buildings and provide three possible avenues for Certification: 

  • trajectory
  • proxies
  • retrofit improvements

In the third of our special Low Carbon Buildings (LCB) Blog Series (the first blog looked at Germany and the second looked more broadly at European cities) we look at the growing number of jurisdictions where Climate Bonds Certification is available for low carbon buildings investments using one of those three avenues. 

Opportunities in Multiple Markets 

LCB Certification is now available in multiple markets including:

  • Australia
  • Singapore
  • USA
  • China
  • Mexico
  • New Zealand
  • Europe
  • Korea 

Relevant local proxies and measures have already been used for Certifying Green Bonds.

LCB Certifications 

Australia

Australia is becoming an important player in LCB Certifications. We have seen multiple LCB Certifications roll-out of the country, including a world first supermarkets Certification by Woolworths Group for their AUD400m 5-year bond. 

Here's some examples from the last four years:  

Singapore 

In 2017, CDL Properties Ltd. in Singapore (CDLP), also issued a Certified green bond. Proceeds of the SGD100m (USD70.7m) Climate Bonds Certified issuance will be allocated to the repayment of an SGD100m loan extended by CDL to CDLP which owns Republic Plaza, one of Singapore’s tallest skyscrapers and a premium Grade A office building in the heart of Singapore’s Central Business District. 

USA 

In the United States, the New York State Housing Finance Agency (HFA) issued its 14th green bond in July 2019, becoming the issuer that has issued the greatest number of Climate Bonds to date. HFA is using Programmatic Certification route for multiple green issuers, adhering to Low Carbon Buildings Criteria. 

HFA expects that the housing projects financed with the proceeds of its Green Bonds will meet or exceed certain ENERGYSTAR energy efficiency standards and thereby qualify as “Low Carbon Buildings” under the Climate Bond’s criteria. 

New cities recently available for Certification of Commercial buildings are Sacramento and San Diego. See the table below for full list of US Cities.   

Poland 

In Poland, PKO Bank Hipoteczny (PKO BH) recently announced the issuance of Certified PLN250m green covered bonds, a benchmark for Poland. The proceeds will be exclusively utilised for financing new or refinancing existing long-term residential mortgages with high energy efficiency. 

Certification is available for Commercial and Residential buildings across all of Poland. 

France

Societe Generale issued its 5th ‘positive impact bond’ with the issue mounting to EUR1bn, 10 year fixed-rate covered bond. The bond will be used towards refinancing of eligible home loans. The bank is hoping to show its commitment to the energy transition and also limiting global temperature rise well below 2 degrees.  

Chile 

Both Chilean sovereign green bonds, USD and EUR denominations, received Certification under the Low Carbon Buildings along with Solar, Low Carbon Transport, and Water Infrastructure. 

This was a significant issuance, the first sovereign green bond from the Americas and was well received by investors. 

Mexico City ready to go

New cities are also becoming eligible for Certification as increasing emissions performance data becomes available. Earlier this year, Mexico City was added to the list of cities where Certification under the Low Carbon Buildings Criteria is available. 

This addition to the list is especially important for encouraging green building investment in Mexico City, one of the ten largest cities in the world and is slated to reach megacity status post 2030.  

Commercial Buildings: Sub-Categories- Groceries, Offices, Labs and more…

In addition to our general Commercialand Residential LCB Certification Criteria, Climate Bonds has also produced separate analysis for sub-classes within the Commercial category to reflect different emission profiles and conditions across sub-classes in that category.

Separate trajectories have already been produced for grocery stores and university labs, and more commercial sub-categories will be added in the future.

Global Commercial buildings calculator is available here and residential buildings calculator is available here, see table below for the current available LCB Criteria cities by Commercial and Residential categories. Please contact our team if you don’t see your city on the list. 

Why Low Carbon Buildings? 

70% of today’s greenhouse gas emissions in cities come from buildings, making the transition to low carbon in commercial and residential buildings is one of the biggest mitigation opportunities, with the ability to develop climate-aligned urban areas. 

Climate Bonds Initiative has developed new trajectories and proxies for a range of cities around the world to stimulate investments in low carbon buildings and open new opportunities for green issuers and investors. 

Integral to the LCB Criteria is lowering total emissions from the built environment with the objective of reaching zero carbon by 2050. 

The Last Word- Zero Carbon by 2050 

Our Low Carbon Buildings Criteria is designed to encourage more investment, both in new builds and refurbishments that move building stock towards the zero emissions goal. 

Increasing LCB Certifications in the US, Australia, New Zealand, Korea, and Singapore demonstrate that the LCB Criteria are gaining acceptance amongst investors and issuers pursuing best practices in green buildings.

Congratulations should also go to Acorn Holdings who closed Kenya's inuagural green bond, LCB Certified, last Friday. 

We’ll be adding more jurisdictions and sub-classes going into 2020, supporting green issuers and investors who have lowering overall building emissions amongst their investment considerations. 

Find out more

To discuss options for Certification in your area, or to sponsor the development of a trajectory, here's where to find us: 

certification@climatebonds.net

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