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Lloyds unveils plans to commit £500m to ESG-linked social housing projects in 2021
Lloyds Banking Group has said that it plans to invest “at least” £500m on projects in the social housing sector with a clear ambition around hitting environmental, social and governance (ESG) requirements this year.
The bank has unveiled plans to deliver £1.5bn of funding to social housing in 2021, of which at least a third will go towards ESG-linked projects.
Lloyds has invested £9bn in the UK social housing sector since 2018, which is £6.75bn more than it originally committed. It said the increase was a result of strong sector demand, alongside the bank’s appetite to support more social housing and ESG projects.
The £500m of ESG investment in 2021 will support the sector to “accelerate its investment in creating greener homes through the construction of sustainable new buildings and the retrofit of existing properties to help the sector continue its decarbonisation journey”, the bank said.
It comes soon after Lloyds agreed its first sustainability-linked loan with a housing association, in a £22m deal with Welsh social landlord Cartrefi Conwy.
The loan provided Cartrefi Conwy with a set of environmental and social KPIs to meet to secure margin discounts on its financing.
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Lloyds Bank and Scottish Widows, which is also part of Lloyds Banking Group, have also become early adopters of The Good Economy’s Sustainability Reporting Standard for Social Housing.
The standard provides a framework for housing associations to voluntarily disclose their ESG performance in a comparable way, which will be used to help inform future funding decisions.
Lloyds has also developed a new ‘green buildings tool’, which the bank said will enable housing associations to quickly assess the energy efficiency of buildings and make recommendations on how this can be improved.
The bank said that to develop the tool, it assessed the energy retrofit requirements of more than 200,000 homes in the social housing sector and is now working with clients to enable them to measure and plan to improve the sustainability of their stock.
David Cleary, managing director and head of housing at Lloyds Bank, said: “Sustainability is rightly dominating the agenda for the social housing sector. The market-leading amount of funding we’ve delivered in the past three years and our plan for the year ahead underlines our ongoing commitment to social housing and to the UK’s green prosperity and economic recovery.
“Measures to improve the green credentials of the UK’s social housing stock is of dual benefit for the planet and for people. It benefits tenants by creating greener homes with typically lower running costs and helps tackle the climate emergency. The development of new homes and retrofitting of existing ones also supports jobs in the small and large companies undertaking the work.”
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