Climate Bonds and NABERS
Climate Bonds and NABERS open doors for Australian property owners into lucrative international bond finance
13 May 2015
The Climate Bonds Standard for Low Carbon Green Buildings has been launched and Australian buildings are in an unmatched position to lead the world in attracting low-carbon investment. The NSW Office of Environment and Heritage is pleased to announce that a NABERS Energy rating report is immediately suitable as acceptable data for reporting under the Climate Bonds Standard.
The Climate Bonds Standard is a Fair Trade-like labelling scheme for bonds, designed to make it easier for investors to work out what sorts of investments genuinely contribute to addressing climate change.
This means that Australian commercial property owners now have the opportunity to leverage the low carbon credentials of their buildings to attract new and competitive sources of funds from large scale institutional investors seeking low carbon investment options.
Mr. Tom Grosskopf, Director of the Metropolitan Branch at the Office of Environment and Heritage said, “For nearly twenty years NABERS Energy ratings have been the performance indicator that tenants and investors use to reward property owners with energy efficient assets.”
“For us this is further confirmation that the types of measurements that inform the NABERS rating represent the metrics most relevant to investors concerned with low carbon credentials and climate change abatement.”
Sean Kidney, CEO of the Climate Bonds Initiative said “The Climate Bonds Standard is a global standard and adoption in Australia is easier for participants because of the good work the NABERS program has done in setting the standard for collecting carbon intensity data. And while the Climate Bonds standard does not adopt individual rating tools, we feel that those already conducting NABERS ratings are positioned amongst the best in the world to participate in Climate Bonds.”
To qualify for a Climate Bonds certification for Low Carbon Green Buildings, proceeds must be dedicated to buildings that are able to demonstrate very low carbon emissions in operation for the life of the bond. Specifically, these buildings must be in the best 15% of buildings in a local market when it comes to carbon intensity (kgCO2/m2). This carbon intensity is published on each NABERS Energy rating report as a supplementary indicator to the NABERS Energy rating.
The demand for environmentally responsible investment has been growing in both Australia and overseas and fuelled the rapid growth the green bonds market, which trebled in size in 2014. The first Climate Bond issued by NAB (AUD $300m) in 2014 doubled in size due to strong investor demand. More broadly, at the UN Climate Summit in September 2014 investors representing USD$43 trillion of assets under management made public commitments to climate related investment.
Mr. Grosskopf said: “A big factor in the success of NABERS Energy has been that high ratings have economic value. That’s what has elevated the program from being a straightforward measurement tool to being a mechanism for market transformation.”
“Up until this point the economic value was driven largely by government leasing policies and incentive schemes. The fact that the data underlying a NABERS Energy rating can now be used to meet the reporting requirements of the Climate Bonds Standard demonstrates how the system can be leveraged to a far greater extent. This is the start of a significant gear shift for the program – one that our property industry will benefit greatly from.”
“While initially the standard specifically targets commercial office buildings, there is real potential for Climate Bonds to make an impact among other sectors of the market. NABERS looks forward to working with the Climate Bonds Institute, the Green Building Council of Australia and others to extend these benefits beyond the office market”, Mr. Grosskopf said.
For more detail on the new Climate Bonds Standard for Low Carbon Green Buildings please go to http://www.climatebonds.net/standards/standard/green-buildings/commercial.
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