Green Finance Institute’s Coalition for the Energy Efficiency of Buildings releases first report on scaling-up retrofit financing

by | May 20, 2020

The Coalition for the Energy Efficiency of Buildings (CEEB), established by the UK Government and City of London Corporation-backed Green Finance Institute in December 2019, today releases its phase-one report, Financing energy efficient buildings – the path to retrofit at scale. The report demonstrates the urgent need to increase the pace and scale of investment into the energy efficiency and resilience of UK residential buildings and sets out a portfolio of financial solutions to catalyse take-up on a national scale, with the potential to contribute substantially to a post-Covid-19 green and inclusive economic recovery.

The UK’s building stock is responsible for approximately 30%[1] of the country’s total greenhouse gas emissions, and the failure to decarbonise our built environment could result in a 40% shortfall to our economy-wide decarbonisation targets by 2030[2]. Meeting the UK-wide target for as many homes as possible to achieve an Energy Performance Certificate (EPC) rating of C by 2035 will require a total investment in energy efficiency upgrades of up to £65 billion2.  The Green Finance Institute is confident, however, that a synergy can be forged between the parallel needs of lowering emissions and rebooting the economy in response to the coronavirus pandemic: firstly, the scale of works necessary will support more than 150,000[3] skilled and semi-skilled workers across the hard-hit construction supply chain, especially in areas already facing higher levels of unemployment and higher energy bills; secondly, energy efficiency upgrades are relatively quick to install, meaning investment can be stimulated rapidly; and thirdly, the resulting household energy cost savings can translate into increased consumer spending, thereby supporting the wider recovery.

Dr Rhian-Mari Thomas OBE, chief executive, Green Finance Institute and chair, CEEB, says: “Citizens, communities and economies are facing the two greatest challenges of our times: climate change and the Covid-19 pandemic. The response to both these crises is rooted in science and innovation, as we seek solutions to monitor, mitigate and adapt to the impacts of coronavirus and our changing climate. The role of our financial system is also increasingly recognised as essential in facilitating those solutions, while also helping to create a more inclusive and sustainable global economy.

“In line with the Green Finance Institute’s theory of change – which focuses on creating opportunities for the financial sector to profitably support the transition towards an environmentally sustainable economy – the Coalition for the Energy Efficiency of Buildings is developing the market for financing net-zero and resilient homes through the co-design and launch of viable and impactful financial demonstration projects that provide the catalysts for further financial innovation and scale.”

Formed of global experts from financial services, local and national government, energy and construction industries, academia and civil society, in just five months the CEEB has established the case for retrofitting buildings to high-energy efficiency standards, analysed the current barriers to take-up, and used its unique combined knowledge of the finance and building sectors to generate a portfolio of 21 financial demonstration projects that are commercial, scalable and mobilise capital flows towards the retrofit of UK homes to improved energy performance standards.

“The work carried out by the Coalition for the Energy Efficiency of Buildings represents a positive step towards achieving our Green Finance Strategy ambition to build the market for green home finance. The proposed demonstrators aim to support the development of innovative products to finance energy efficiency and build a vibrant market for energy retrofit. This will support the UK in delivering its commitment to move towards net zero whilst growing our economy,” says The Rt Hon Kwasi Kwarteng MP, Minister of State, Business, Energy and Clean Growth

The Coalition found that each housing tenure analysed – owner-occupied, private-rented and social-rented – had distinct decision-makers with specific barriers to retrofit, many of which connect to the lack of attractive or available finance. For example, owner-occupiers can experience long payback periods on investment and a limited impact on property valuations, which can hold households back from expending the upfront costs required. In the private-rented sector there is an incentive split, as the landlord pays for energy efficiency improvements and yet tenants accrue the benefit through reduced energy bills. In the social-rented sector, the short-term nature of grant schemes can prevent more ambitious retrofit projects, and private leaseholders and occupiers within blocks of flats and terrace rows can prevent social housing providers from undertaking large-scale retrofit projects. As well as access to financing, better data, trusted measurements of effectiveness, a depth of supply chain and incentives and regulation for both borrowers and lenders to act are also needed. For low income and fuel-poor households, public capital and government guarantees have a larger role to play.

The 21 demonstration projects that were co-designed by the Coalition include financial, data and standards-based solutions to overcome barriers to scaling up finance, as well as assessment and policy levers that could bolster the commerciality and scalability of these solutions. The Coalition will now take forward a selection of these pilots, enabling a practical demonstration of their viability with their launch later this year. The demonstrators fall into six groups:

  • Lending products – including Property Assessed Clean Energy (PACE) loans, equity release mortgages
  • Savings and investment products – including community municipal bonds and ISAs
  • Guarantee mechanisms – backed by the Government or by insurance companies
  • Tenancy agreements – green leases
  • Energy service products – enabling housebuilders to recoup investment
  • Data and enabling frameworks – including building renovation passports and standardised energy saving methodologies.

The Green Finance Institute’s role now is to progress development of the demonstrators and assist their swift adoption by unlocking synergies between individual products and facilitating cross-sector collaboration, responding to the Government’s Green Finance Strategy ambition to build the market for green homes and supporting the UK in delivering its commitment to move towards net-zero carbon whilst growing its economy.


Download the full report: Financing energy efficient buildings – the path to retrofit at scale

Quotes from Coalition members:

“We need to build back better as we recover from the effects of the pandemic and tackle the climate emergency. The innovations being pioneered by the Green Finance Institute provide a great opportunity to channel our financial resources into a more sustainable future, with Community Municipal Investments playing a key role in building resilience across the UK.” Bruce Davis, Co-founder and Managing Director, Abundance Investment

“Responding to the climate crisis by retrofitting existing homes supports both the transition to a zero-carbon economy and the creation of new jobs which will be critical as we adapt to the impacts of Covid-19.

“Ecology has been providing green mortgages, funded by our members who support our sustainable lending policy, for nearly 40 years. We’ve proven that incentivising energy efficiency through our unique C-Change discounts works by basing our mortgage rates on a property’s climate impact.

“This report shows that good progress is being made and we’re pleased to be sharing our experience and contributing to the ongoing work of the Coalition.  We particularly welcome the focus on gathering data to develop the solid evidence base that lenders, investors and the wider retrofit supply chain require in order to urgently deliver the tangible and practical solutions we need to avoid the catastrophic human and ecological impacts of the climate crisis.” Paul Ellis, Chief Executive, Ecology Building Society.


“All eyes have understandably been focused on the Covid-19 crisis in recent weeks.  However, the issue of climate change and the imperative to move to a net-zero carbon economy remains.  The Green Finance Institute and the Coalition for the Energy Efficiency of Buildings, in which we are involved, is making good progress.  As we think about the future of our society, finance and the economy, I see a real opportunity for change that could open up new jobs and provide longer-term economic stimulus as we reduce carbon emissions and heating bills.” Colin Fyfe, Chair, Building Societies Association Green Finance Taskforce and Chief Executive, Hinckley & Rugby Building Society.

“The Green Finance Institute’s report is timely as our homes take on an even greater role at the centre of millions of lives following the outbreak of the coronavirus. The report will help policymakers, businesses and consumers overcome barriers across a wide range of issues, including how to encourage people to make their homes more energy efficient.

“Earlier this year Nationwide made £1 billion available for green home improvements to reduce the carbon footprint of Britain’s homes – because, as things stand, incentives for consumers are the only realistic way to help people make their homes greener.

“We are delighted to be part of this Coalition to help build on that by developing practical solutions to boost energy efficiency investments.” Joe Garner, Chief Executive, Nationwide Building Society. 

“The overwhelming majority of the homes we will live in by 2030 already exist, so delivering energy efficiency and climate-change adaptation through retrofit is a vital and valuable prize which has proved elusive so far.  This report is  the start of an important collaboration to develop and trial scalable and affordable solutions for all forms of tenure.” John Godfrey, Corporate Affairs Director, Legal & General.

“Retrofitting the UK’s homes will have a central role to play in our post-Covid economic recovery.  Making our homes warmer and healthier will also ease pressure on the NHS by reducing the incidence of cold-related illness.  This report therefore comes at just the right time.  Through a rigorous review of the market, it has identified the barriers to energy efficiency investment and proposed very practical financing solutions to overcome them.  We were delighted to lead the Coalition’s work on the owner-occupied sector – and look forward to the next phase of the project.” Julie Hirigoyen, Chief Executive, UKGBC

“The banking and finance sector is determined to ensure that sustainable financial products, including mortgages, are available to customers to help them improve the energy performance of their homes and support the UK in its transition to a net-zero carbon economy. The report by the Green Finance Institute’s Coalition marks the start of important collaborative projects to show how retrofitting homes could be achieved and funded at pace and volume to deliver a healthier and sustainable future, whilst also growing the economy. We look forward to the next phase of this work with the Coalition in enabling the UK to meet its Green Finance Strategy ambitions.” Stephen Jones, Chief Executive, UK Finance.

“RICS fully supports efforts to drive up energy efficiency in residential properties. The surveying profession is playing a central role through data standards, professional guidance, and tools to record buildings’ energy performance and embodied carbon.” John Kraus, Head of Sustainable Urbanisation, RICS.  

“There has never been a more important time for financial markets to adapt and respond to climate-related risks and broader ESG issues.  The loan market is well placed to widely support residential retrofit investment, and therefore the Loan Market Association is delighted to be part of this vital initiative to produce a portfolio of financial solutions to scale up the energy efficiency and resilience of UK residential buildings.” Gemma Lawrence-Pardew, Senior Associate Director, LMA.

“De-carbonising the built environment is critical for our industry and retrofitting the existing residential sector is fundamental to successfully achieving this. Mitigating climate risk is not optional, it underpins economic resilience and our planet’s future, and this report and the Coalition for the Energy Efficiency of Buildings’ exploration of financial solutions will incentivise much-needed investment into creating a more sustainable future for the UK housing market.” Melanie Leech, Chief Executive, British Property Federation.

“Increasing the energy efficiency of buildings has a central role to play in supporting the UK’s commitment to moving towards net zero. Ready availability of private finance is critically important to this. The work carried out by the Green Finance Institute, in which we are involved, provides a catalyst for consumer finance providers to explore the product development opportunities in this market.” Robin Penfold, Partner, UK law firm TLT.

“As the largest social landlord in the country, we are pleased to have been able to contribute to this important report. Clarion was the first housing association to be awarded the Sustainable Housing Impact Label and we are looking forward to working with CEEB partners to explore new ways to accelerate progress on retrofitting our homes. We want all of our residents to be able to live affordably and sustainably.” Will Ray, Head of Sustainability, Clarion Housing Group.

“UK homes are responsible for emitting a significant proportion of the UK’s carbon emissions, which by law we must reduce to net zero by 2050. Delivered the right way, tackling our homes will also make them easier and cheaper for the residents to make decarbonisation a progressive step. We have the technology and know-how to deliver this and are delighted to be the Green Finance Institute’s pilot to evidence how this can work with finance to achieve large-scale decarbonisation. The team at Sero will be sharing the appropriate data from our own trials around energy service products and we look forward to working with the CEEB to help show that solutions can be delivered.  This report is just the beginning.” Andy Sutton, Co-founder, Sero.

Media contact: [email protected]

About the Green Finance Institute
The Green Finance Institute is an independent, commercially focused organisation, supported by HM 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 @gfi_green.

About the CEEB

The Coalition for the Energy Efficiency of Buildings (CEEB) aims to develop the market for financing net-zero carbon, resilient buildings in the UK by accelerating the pace of financial innovation and mobilising capital towards the retrofit and development of a climate-resilient housing stock. The Coalition is delivering multiple real-world outcomes, including a portfolio of financial demonstrator projects.

Members of the Coalition for the Energy Efficiency of Buildings include individuals from:

Abundance Investments
Allium Lending Group
BNP Paribas
BRE Group
British Property Federation
Building Societies Association
Carbon Trust
Clarion Housing Group
Centre for Research into Energy Demand Solutions
Department for Business, Energy & Industrial Strategy
Ecology Building Society
Energiesprong UK
Energy Efficiency Infrastructure Group
Energy Saving Trust
Energy Systems Catapult
Eversheds Sutherland
Greater London Authority
Greengage Environmental
Green Place Partners
Grid Edge Estates
Knauf Insulation
Leeds City Council
Legal & General
Lloyds Banking Group
Loan Market Association
Ministry for Housing, Communities and Local Government
Monmouthshire Building Society
National Residential Landlords Association
Nationwide Building Society
Nottingham City Homes
Paragon Bank
Parity Projects
Phoenix Group
Royal Institution of Chartered Surveyors
Sero Homes
Transport for London
Turner & Townsend
UK Finance
UK Green Building Council
University of Reading
Welsh Government / Llywodraeth Cymru

[1] UK GBC

[2] BEIS

[3] EEIG