UNEP FI report explores financing for green building | News | SDG Knowledge Center



A report on financing sustainable construction discusses the growth in the housing stock and the projected need for more housing in the future against a backdrop of population growth and urbanization. Housing growth affects the use of materials, energy and water consumption, waste and carbon emissions, hence the need to finance green buildings. The United Nations Environment Program Finance Initiative (UNEP FI) publication focuses on Sri Lanka, where housing stock increased 19% from 2001 to 2012. Report provides resources for banks and other industry players to adjust lending practices to increase credit flows. to green buildings. It also highlights examples of financial regulators and actors in Sri Lanka acting to change the financial system to integrate sustainability into financial decision making.

The guide is intended for:

  • the state of green building practices and associated beliefs in Sri Lanka, green certifications and eco-labeling, and green building knowledge and attitudes;
  • the barriers and benefits of green buildings, with a review of international evidence on the financial value of green buildings;
  • information needs in Sri Lanka to prepare preliminary green finance models; and
  • strategies for integrating green finance practices.

More specifically, it explores: and the development of green real estate finance products, including concessional construction finance, potential capital and project finance resources, underwriting practices, and a framework for capacity and market development. Marlet.

The report argues that modest adjustments to lending criteria and practices can result in more credit flow to green buildings.

The report addresses the barriers that prevent further investment in green buildings and energy efficiency. He notes that although green buildings are often more expensive and, therefore, affect initial affordability, evidence suggests modest additional costs to design and build green, and finds that green buildings create financial benefits that exceed their costs. Nonetheless, the guide recommends developing a green construction loan product in which project debt is provided at concessional interest rates to offset any increase in project capital expenditure relative to non-green buildings. Green finance products must also take into account local conditions, such as interest rates, the energy use characteristics of buildings and the depth of capital markets.

UNEP prepared this guidance as part of the SAICM FEM 9771 project, which focuses on two emerging policy issues (EPI), namely: lead in paint and chemicals in products that generate environmental and health challenges. The project helps track and control chemicals throughout building and construction sector value chains. A UNEP team worked with stakeholders in Sri Lanka to identify chemicals of concern in the construction materials value chain and with manufacturers on reformulations and end product alternatives. [Publication: Sustainable Building Finance: Supporting Green Mortgage Development in Sri Lanka]

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