Lloyds Banking Group has announced the launch of its new Sustainability Finance Framework, which helps housebuilders to access finance to build more homes with higher sustainability standards.
The framework sets out how Lloyds will help housebuilders access finance to build more sustainable homes through one of three existing propositions:
- The Clean Growth Financing Initiative (CGFI) which provides discounted financing for sustainability projects for smaller and medium sized housebuilders.
- Sustainable Development Loans (SDLs) which provide discounted financing for sustainability projects within the housebuilding sector for larger clients.
- Sustainability-Linked Loans (SLLs) available for larger customers, which incentivise the borrower’s achievement of ambitious, predetermined sustainability performance objectives.
It incorporates the recent creation of additional sustainability standards for newbuild homes in the UK, which Lloyds has helped develop alongside NextGeneration.
David Cleary, Managing Director, Housing, Lloyds Banking Group, said: “The demands on UK housebuilders are significant – evolving building regulations, increased focus on low-carbon and biodiversity, consumer demand for greener homes, and rising costs. Our ambition at Lloyds Banking Group is that we work with these housebuilders to help meet these challenges and contribute towards the UK’s Net Zero goal.”
“The propositions set out in the Sustainability Finance Framework increase access to incentive-based finance to businesses across the housebuilding, real estate, and wider construction sector, and can drive better, more consistent practices, sustainability standards and outcomes for businesses and their customers.”
Shaun Walden, Head of Sustainable Finance and Climate Change, DNV UK, said: “It is great to see Lloyds Banking Group publish this holistic Sustainability Finance Framework for the new build housing sector. This innovative report is one of the first sector-based financing frameworks issued by a financial institution and shows the focus Lloyds Banking Group has on this sector. The Framework will be welcomed by the growing ESG community, and I look forward to seeing Lloyds’ further advances in this space.”
At the beginning of 2021, Lloyds joined the executive committee of NextGeneration, alongside the UK Green Building Council and Homes England. NextGeneration is a membership-based sustainability benchmark of the UK’s largest homebuilders established to help drive the creation of sustainability standards for new build homes in the UK.
To help support a move towards sustainable buildings, Lloyds’ customers have free-of-charge access to its Green Buildings Tool – a digital insights calculator that helps to identify, evaluate, and understand the estimated outcomes of potential investments to make properties greener.
In the social housing sector, in 2021 Lloyds provided £3.4 billion of new funding of which £2.4 billion is new ESG-linked financing and it assessed the energy efficiency of around 240,000 homes, using the Green Buildings Tool.
