Sustainable finance guide sets off cross sector collaboration

29 Nov 2023

When Green Building Council of Australia joined the Australian Sustainable Finance Institute to release a new practical guide to sustainable finance for the property industry, it launched a new era of collaboration between sectors. We spoke to some of the organisations involved to hear how this report will boost the understanding of sustainable finance within the real estate sector, and why it was essential to have collaboration at its core.

Davina Rooney, CEO, Green Building Council of Australia

This much needed, practical guide was created to first demystify and then deepen the understanding of sustainable finance within the Australian real estate sector. We hope to see it facilitate a more efficient adoption of sustainable finance mechanisms so we can continue to drive positive environmental impact.

Improved collaboration between the real estate and finance sectors in Australia will be essential to meet our nation’s climate goals and the good will and partnership displayed in the development of this guide shows that we are on track. Australia is on the brink of a sustainable finance revolution within the real estate industry, and if this opportunity can be unlocked, the gains for global sustainability would be enormous. Together, we can harness the power of sustainable finance to shape a brighter, more sustainable future for Australia and the world.

Kristy Graham, CEO, Australian Sustainable Finance Institute

Around the world, the real estate industry has increasingly embraced sustainable finance instruments, recognising their potential to drive decarbonisation efforts and support sustainable development projects.

While Australia’s market for sustainable finance is young, it is showing huge potential in the building sector, but it does require a supportive ecosystem.

This includes working together to establish common definitions and approaches for sustainable finance that are environmentally credible, understood and useable by industry, and inter-operable with global standards. This guide is an important move in that direction.

Aishwarya Sankar, Buildings Sustainability Analyst, Climate Bonds Initiative

Collaboration among companies is beneficial as it allows for leveraging strengths, shared learning, risk mitigation, cost efficiency, market expansion, innovation, enhanced reputation, and navigating regulatory challenges.

This cooperative approach often leads to mutual benefits and stronger competitiveness in the market. It also allows for the pooling of diverse expertise, holistic approaches, industry insights, stakeholder engagement, innovation, credibility, and a global perspective—all crucial elements in crafting a comprehensive and effective guide.

Creating a comprehensive sustainable finance guide requires input from various fields such as finance, environmental science, policy-making, and social impact. Collaboration allows experts from these diverse backgrounds to contribute their specialized knowledge and perspectives. As Sustainability is a multifaceted concept encompassing environmental, social, and governance (ESG) factors, collaboration ensures a holistic approach, considering all these dimensions.

In summary, involving stakeholders such as NGOs (ourselves) ensures that the guide is relevant, practical, and widely accepted. Having our work referenced in the guide provides a range of benefits, including increased credibility, visibility, networking opportunities, enhanced reputation, marketing advantages, and potential avenues for further collaboration and growth.

Carlos Flores, Director, NABERS

Reaching net zero emissions by 2050 will require an unprecedented scale of sustainability action in the building sector. Millions of Australian buildings will need to be upgraded to reach this goal over the course of two decades, a level of building sustainability action that far exceeds what we have been able to drive to date. To achieve such a monumental goal we need to pull every lever, join our efforts in government and industry, and use our complementary strengths to row together towards a cleaner future. If we are fragmented and disunited, we have little chance to succeed.

This guide is an inspiring example of what collaboration in sustainability is all about. It leverages the complementary strengths of the GBCA and industry partners like NABERS to help thousands of building sustainability and sustainable finance champions to make an even bigger difference for the environment. There are few levers with greater potential to drive positive change than sustainable finance, but unlocking this requires robust and collaborative standards that can harness this collective power. This guide is a decisive step in the right direction to unlock this power.

Kelly Worden, VP of ESG and Investing for Health, IWBI

The guide breaks down more than ten [sustainability] frameworks and rating systems – the WELL Building Standard (WELL) among them – to demystify the space and demonstrate how their application can facilitate access to sustainable capital. Importantly in regards to IWBI, the report positions a ‘focus on people’ as a major initiative within the industry through a focus on health, equity and well-being. IWBI informed the inclusion of social considerations within this guide and categorized how WELL relates to leading sustainable finance frameworks.

Ruben Langbroek, Head of Asia Pacific, GRESB

The Guide provides an accessible, broadly applicable introduction to various types of sustainable finance, including green bonds, sustainability-linked loans, and other instruments. It provides useful new information, including sample targets and model language for the use of proceeds; examples of KPIs; and recommendations for the use of green building certifications.

The Guide’s clear, time-bound targets for the fundamental elements of decarbonization, including energy use, energy supply, and embodied carbon, are particularly useful. The document backs these up with case studies for building projects using sustainable finance to create superior buildings that benefit people and the environment. 

Laura Hamilton-O'Hara, CEO, Living Future Institute of Australia

Finance is often the driving energy behind projects and is a powerful lever for incentivising good social and environmental outcomes. The LFIA is so proud to have worked collaboratively on this guide which not only explains clearly what sustainable financial mechanisms are available but also how the different rating tools meet the various objectives.

To ignite the scale of change we need to see in our sector, a guide that brought everyone up to the same level of understanding was essential. Congratulations to the GBCA and the Australian Sustainable Finance Institute for leading this work and for doing so collaboratively. Let’s crack on now. We can do this and now we are even more likely to succeed.

Alexia Lidas, CEO, Australian Passivhaus Association

The Passivhaus standard is currently experiencing exponential growth in Australia. One of the first questions we are asked by commercial clients seeking to move into the space is about finance. "Do the banks lend for Passivhaus projects" or "do they see any risks", while we are seeing financial investment moving comfortably towards these projects, there is an education process for the lenders to get there. With many banks coming to our Association requesting further information such as what has been outlined in the guide. 

GBCA, with the support of the Australian Sustainable Finance Institute, are proud to have recently released this guidance on sustainable finance that will address the steps needed to embrace collaboration and achieve impact at  scale. You can learn more and download the guide here.