Green Home Retrofit Finance Principles to provide vital industry framework for retrofit funding

by | Sep 28, 2020

Ahead of the launch of the Government’s Green Homes Grants scheme, the Green Finance Institute today launches the Green Home Retrofit Finance Principles (GHRFPs), backed by leading institutions including Lloyds Banking Group, NatWest Group, Ecology Building Society, UK Finance and the Building Societies Association, as well as property industry organisations.

Produced in collaboration with the Loan Market Association (LMA), the Principles have been developed to strengthen the integrity of the retrofit finance market. Their goal is to align global capital behind industry-accepted standards for green buildings and retrofits by providing a consistent and transparent framework for financial institutions to use when allocating lending for energy-efficiency work in UK homes. The Principles are a product of the Institute’s Coalition for the Energy Efficiency of Buildings (CEEB), established in 2019 with the support of global think tank E3G to build a portfolio of products and mechanisms to turbocharge the market for retrofit finance.

Covering four areas – use of proceeds, process for project evaluation and selection, management of proceeds, and reporting – the Green Home Retrofit Finance Principles are intended to guide retrofit financing processes across the domestic property market, focussing initially on the owner-occupied and private rented sectors. In order to be considered a ‘green home retrofit financing’, a transaction must align with these core components. While the GHRFPs are not designed to take a position on the green technologies and standards per se, information is provided on indicative categories of Green Home Retrofit Projects, and existing national and international standards and verification frameworks.

Dr Rhian-Mari Thomas OBE, Chief Executive of the Green Finance Institute, says, “Drawing experience  from the Loan Market Association’s Green Loan Principles and the ICMA’s Green Bond Principles, which showed the catalysing effects of having a set of financial standards ratified by the industry, the Green Home Retrofit Finance Principles will give the market clear guidelines on how to process and track lending for energy-efficiency works. The formulation of the Principles is a key enabler for many of the Green Finance Institute’s Coalition for the Energy Efficiency of Buildings’ initiatives, to be presented later this year in a second-phase report alongside outputs from the recently-convened Zero Carbon Heating Taskforce.”

Clare Dawson, Chief Executive of the Loan Market Association, says, “There has never been a more important time for financial markets to respond to climate-related risks and support the drive to net-zero emissions targets. Decarbonising and adapting the UK’s housing stock is critical to meeting these climate targets, and the LMA is delighted to have been part of this vital project in creating a framework that will help match investment goals with climate needs.”

Current adopters and supporters of the GHRFPs – institutions that respectively align, or commit to align, one or more products with the four core components – include Adam & Co, BNP Paribas, Coutts, Ecology Building Society, Hinckley & Rugby Building Society, Lloyds Banking Group, NatWest Group, Newbury Building Society, and Saffron Building Society.


Rosie Cade, [email protected] +44 (0) 7838 368 194

Additional quotes

Stephen Huller, Director of Home Improvements, BNP Paribas Personal Finance, says “BNP Paribas Personal Finance is proud to be one of the first lenders in the UK to align to the principles established by the Green Finance Institute. We believe this work is not only going to make a major difference today but develops a long-term roadmap leading to better financial solutions for all participants in the energy efficiency marketplace.”

Murray Birt, Senior ESG Strategist, DWS Group, says, “There is significant opportunity for the financial industry to create new financial products that are aligned with the new Green Home Retrofit Principles and that will help to make our homes healthier to live in, reduce our carbon footprint, creating jobs and supporting UK leadership on the road to the UN climate summit COP26.”

Nick Mabey, E3G, says, “Homes are at the heart of our society, yet their contribution to climate breakdown often flies under the radar. Significant public and private investment is needed to underpin energy efficiency and zero carbon heat solutions.

“E3G is proud to have helped the Green Finance Institute launch the UK’s first framework for lenders offering green finance to get our homes on track for zero carbon, and we look forward to working with the finance community to ensure their widespread and robust adoption. The Green Homes Grant offers an exciting opportunity for lenders looking to launch green finance products, and we hope the new Principles provide a firm foundation to help ensure market integrity.”

Daniel Capstick, Mortgages Manager, Ecology Building Society, says, “Improving and retrofitting our existing housing stock is critical if we are to meet our net-zero commitments and make our homes fit for the future. It also creates jobs and reduces energy bills, supporting the green recovery.

“Ecology has been providing green mortgages for nearly 40 years and we’ve proved that incentivising energy efficiency through our unique C-Change mortgage discounts works by basing our pricing on a property’s climate impact.

“Our renovation mortgages already meet the requirements of the Green Home Retrofit Finance Principles, which are a welcome first step to an industry-backed framework for lenders to provide retrofit finance.  We look forward to working with the Green Finance Institute and other mortgage providers to develop these further in the future.”

Simon Watson, Managing Director, Royal Bank of Scotland & Ulster Bank Northern Ireland at NatWest Group, says, “Climate concern has never been higher and our ambition to support our customers in this area has never been stronger. We have committed to ensuring that 50% of our mortgage customers’ homes are energy rated to C or better in the next decade.

“Retrospective home energy improvements are key to reducing the emission from home energy usage, which is why we welcome the Green Finance Institute’s Green Home Retrofit Finance Principles, and why NatWest is now offering a £100 thank you payment to all our customers who borrow to  make climate-friendly home improvements as part of the UK Government’s Green Homes Grant.”

Colin Field, CEO at Saffron Building Society, says, “Saffron is delighted our Retro Fit Mortgage aligns with the Green Finance Institute’s Green Home Retrofit Finance Principles, a new framework for financial institutions to use when lending to customers for retrofit work in their homes.  This is a pivotal moment in our transition to net-zero, and we are eager to continue to push the message that homeowners can make a difference. As trusted partners to our borrowers, we can enable homeowners to make small and effective changes to their homes, which will have an important impact on all our futures.”

Charles Roe, Director of Mortgages at UK Finance, says: “Lenders are playing an active role in addressing the challenges of climate change and building a sustainable recovery by developing green mortgages and new approaches to funding home energy retrofits.

“The Green Home Retrofit Finance Principles provide a valuable framework to help lenders develop products that will help householders to help support the green agenda. They include a constructive challenge to industry to evidence and report on environmental gain from green finance.

“UK Finance will continue to work with lenders, government and key stakeholders including the Green Finance Institute to ensure the challenge can realistically be met.”

Colin Fyfe, CEO at Hinckley & Rugby Building Society, says, “The introduction of the new Green Home Retrofit Finance Principles is a key step in ensuring occupiers of existing homes are given the opportunity to contribute towards net-zero emission goals. Giving these homeowners a chance to increase energy efficiency is important now more than ever and is vital in transforming the existing housing market.

“We are proud to support the principles.”

About the Green Finance Institute
The Green Finance Institute is an independent, commercially focused organisation, supported by Her Majesty’s Treasury, the Department for Business, Energy and Industrial Strategy, the Foreign, Commonwealth and Development Office and the City of London Corporation.  As the UK’s principal forum for public and private sector collaboration in green finance, it is uniquely placed to mobilise capital to accelerate the domestic and international transition to a sustainable, net-zero carbon economy that is also climate resilient. The Green Finance Institute convenes and leads mission-led coalitions to identify and unlock barriers to deploy capital at pace and scale towards impactful, real-economy outcomes.  For more information visit and follow the Institute on Twitter and LinkedIn.

About the CEEB
The Coalition for the Energy Efficiency of Buildings (CEEB) was established by the Green Finance Institute, with support from E3G, as its flagship coalition in December 2019. Made up of more than 150 individual members from the finance, property and energy sectors and across policy, academia and non-profit organisations, the CEEB aims to develop the market for financing a net-zero carbon and climate-resilient built environment, both in the UK and internationally. In May 2020, the CEEB released its phase-one report, assessing the market for energy efficiency improvements in UK homes across all tenures, and identifying specific initiatives where the finance sector and government can bridge investment gaps to drive systemic change. The report outlines a portfolio of 21 demonstration projects and the Coalition is working collaboratively to bring these to market.