This article was originally published on GBIG Insight. Read the original article.
The property sector has recently received significant attention related to climate change and sustainability efforts, and rightfully so. Contributing one-third of global carbon emissions and consuming 40% of global energy and resources, 25% of water and 60% of electricity (in Europe and the US, this is even over 80%), the real estate sector constitutes one of the greatest potential opportunities to address environmental issues including climate change, while also creating economic opportunity for investors and asset owners. Market transformation to a more efficient, more sustainable real estate sector will require an astounding amount of capital, and green bonds have emerged as a potential and promising financing source.
GRESB released Green Bond Guidelines for the Real Estate Sector last week. These Guidelines are intended to complement the seminal Green Bond Principles through refinement and specification of its four pillars – Use of Proceeds, Process of Project Evaluation and Selection, Management, and Reporting—for the real estate sector. Property company issuers, green bond underwriters and investors can use the Guidelines to identify Eligible Green Projects and specify metrics and reporting constructs that are most appropriate for their particular objectives.
Here’s the why, how, and who on green bonds and the GRESB Guidelines.