Blend Network: Development finance yet to show commitment towards net zero
While house builders have shown commitment to support the journey towards sustainability, the housing development finance industry as a whole is still behind, according to Paul Watson, head of lending at Blend Network.
There are currently no publicly recognised frameworks, best-practice guides or ESG checklists for the construction industry.
However, there is a whole range of ways in which development finance lenders can assess the ESG credentials of the housing schemes they seek to fund, said Watson.
He added: “Net zero housing infrastructure needs to be delivered at scale, pace and at the lowest cost to maximize the benefit of net zero and to keep the costs to prospective homeowners and taxpayers down.
“Harnessing sources of funding which is ready to invest from non-bank and specialist lenders will avoid further burdens on government finances, especially at a time when there are already existing pressures on government finances. Development finance lenders have a duty to support Britain’s road to Net Zero.”
Looking to ways to further contribute to building greener properties, Watson said specialist development finance lenders need to design and offer to the market green and sustainable products that cater to the needs and requirements of ESG-compliant housing schemes.
He also believes that they need to work with developers and their sustainability advisers to ensure that their funding arrangements contain meaningful targets that will enable the borrower to use the funds borrowed to achieve real change.
“They also need to offer dedicated products that will allow borrowers to retro-fit existing stock and build more energy efficient housing,” Watson added.
Sustainable construction means using renewable and recyclable materials when building new structures, as well as reducing energy consumption and waste.
The primary goal of sustainable construction is to reduce the industry’s impact on the environment.
Watson said: “It’s important to note that sustainable construction doesn’t end when the building is complete; the building itself should have a reduced impact on the environment over its lifespan.
“This means that the building design should incorporate elements that have an ongoing positive influence on the building’s environmental impact.
“These can include proper insulation to prevent heat loss, solar panels to reduce energy consumption, and building materials with a long lifespan.
“Sustainable construction is important because from energy usage to emissions, the construction industry has a huge impact on the environment, and therefore it is key that we do all we can to reduce and minimise that impact.”