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Boost for green property bond investment in Australia

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Property bond issuers and investors now have a simple process to assess whether office buildings, proposed developments or retrofits in Australia’s biggest commercial property markets are eligible for certification against the Climate Bonds Low Carbon Building (LCB) Criteria.

The Climate Bonds Initiative has released emissions performance trajectories for commercial offices in Sydney, Melbourne, Brisbane, Adelaide, Perth and Canberra.
 
These trajectories have been set by examining the emissions performance of the top 15 per cent of office buildings in each market, and then determining the trajectory required to achieve zero emissions by 2050.
 
According to Jorge Chapa, the Green Building Council of Australia’s executive director of market transformation, investors can invest in certified climate bonds knowing they are funding green building projects that will meet global climate change targets.
 
The Climate Bonds Initiative used building emissions performance data sourced from the Commercial Building Disclosure Program – an Australian Government initiative which requires sellers and lessors of commercial buildings to disclose information on building energy efficiency.
 
“The release of these emissions performance trajectories means property bond issuers have a straightforward means to assess the performance of buildings and portfolios against current and future expectations,” says Ché Wall, director, Flux Consultants and LCB technical working group lead specialist.
 
“Institutional investors and asset managers now have a robust, evidence-based screening tool and green assurance mechanism to help guide property investment decisions.”
 
Sean Kidney (pictured), CEO, Climate Bonds Initiative, says: “Release of these emissions performance trajectories should spur green property development in the commercial heart of Australia’s major cities, contributing to local and national emissions reduction targets. Bond issuers have a simplified process to evaluate building performance. Investors now have a transparent certification scheme that has continuous improvement in emissions performance of commercial buildings as its goal.”
 
Emissions performance targets for an individual property bond to qualify for Climate Bonds Certification will vary according to when the bond is issued and the term of the bond.
 
Climate Bonds Initiative provides an easy-to-use CO2 Target Calculator on its website to enable issuers to ascertain the emissions performance targets that must be satisfied in order to gain Climate Bonds Certification.
 
“These emissions performance trajectories are an important step for our industry, as Australian building owners and investors need confidence that their investment decisions are in line with a pathway towards zero carbon,” Chapa says.
 
“Climate Bonds Initiative provides a simple methodology for building owners to demonstrate to investors and occupants that they are taking action on climate change.”

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