與歐盟EPC能源績效證書相關的綠色債券
Green bond related with EPC 

 Green bond related with EPC

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Key points

• The green bond is established for the borrower to meet the sustainability standard in different aspect such as energy efficiency

• Barclays has issued the Green Bond by using the EPC database and measuring the eligible assets based on EPC activities

       A green bond is a fixed-income debt instrument in which an issuer (typically a corporation, government, or financial institution) borrows a sizable sum of money from investors to spend for sustainability-related initiatives when they issue a green bond, which is a fixed-income debt instrument. Similarly to ordinary bonds, green bonds operate by issuing money for projects that meet sustainability standards for energy efficiency, renewable energy, or other purposes. The borrower will have to meet certain sustainability requirements or frequently known as a green bond framework created by the issuer. In order for the green bond to be certified, the green bond issuance often involves one or more third party to underwriting, certifying and monitoring the bond issuance. The Green Bond Principles (GBPs) under the international standard such as The GRESB Green Bond Guidelines for the Real Estate Sector also integrate energy ratings to the green bond guidelines such as ENERGY STAR and EPC which many times the investors will not only focus on the rating the building obtains but the overall climate impact of their investment portfolios. 

       One example of a Green Bond related to the EPC is from Barclays. The company is a British multinational universal bank that provides comprehensive banking services to clients. Barclays’ Sustainable Finance Framework is integrated into all sope of Barclay businesses where the company created the Barclays Green and Social Notes Framework under which it intends to issue bonds, covered bonds, structured notes, fixed-term deposits, commercial papers, and other debt instruments through the Barclays Green and Social Notes program to finance or refinance, in whole or in part, current or upcoming projects that are anticipated to have a positive impact on the environment globally and on social advancements in the UK. 

       Barclays were the first UK bank to issue a Green Bond in 2017 and also the first major UK high street lender to launch a Green Home Mortgage as well as second Green Bond in 2020 which more than half of the net proceeds were allocated towards refinancing Green Home Mortgages. In 2018, Barclays was awarded Green Bond of the Year as the green bond will finance or refinance mortgages on residential properties that are estimated to be among the best-performing 15% of buildings in England and Wales for carbon intensity. The size of the green bond is GBP500 million with the eligible assets based on energy efficiency data that was made publicly available by the UK government in the second quarter of 2017 which is the first time that the bank has used the data from the EPC to analyze the carbon performance of its entire mortgage portfolio. Prior to the settlement, Barclays instructed Carbon Trust to research existing mortgage-backed green bonds in other European nations and evaluate the benefits and drawbacks of EPC ratings in the UK which lead to a well-designed green bond framework with a high degree of transparency. The green bond received orders totaling GBP 1.85 billion which was 4.5 times oversubscribed, with the majority of investment coming from Central and Western Europe. 

       The eligible assets to the green bond are under the theme of energy efficiency in different sectors, sustainable transport, sustainable food, agriculture, forestry, aquaculture, and fisheries, and resource efficiency and pollution control. Focusing on energy efficiency, in commercial and residential buildings, the development, acquisition, retrofit, and/or refurbishment of new or existing buildings achieving a rating of EEWH Gorld or above, BREEAM Excellent or above, or other green certificate. The energy-efficient new build building with an EPC rating of A or B, as issued through the Barclays Green Home Mortgage, and Retrofit or existing buildings achieving a minimum 20% energy and/or carbon emission reduction or energy efficiency after retrofit is within the top 15% of buildings in the relevant market. For the system level energy efficiency measures will be implemented such as tank and pipe insulation, draught-proofing, loft insulation and external wall; heating measures including air source hear pumps, ground source heat pumps and micro combined hear and power; renewable energy generation including solar hot water, solar photovoltaic, rainfall capture; resilience measures includes the aspect of resilience to flooding and resistance to heatwaves; water efficiency measures including indoor water-efficient fixture and fittings and outdoor water-efficient landscaping. On the other hand, there are some exclusions for the green bond such as the improvements in appliances and equipment that are fossil fuel, activities that result in fuel switching are eligible, cogeneration systems applied to the fossil fuel or mining industries, and cogeneration plants powered by coal, oil or natural gas. The eligible assets will be reviewed by the Green Bond Committee then the green bond will be granted to the borrowers and the eligible assets must comply with the relevant standard such as CBI Standard. 

       In conclusion, the green bond published by Barclays targeted energy efficiency by optimizing the database of the EPC with focus on different sectors in the economy. The bank will provide financial support for the eligible activities that contribute to energy efficiency such as the development of buildings that achieve EEWH Gold or above and activities that targeted energy efficiency for commercial and residential buildings including installing low-energy lights. The ESG forums of the Barclays and management process will monitor the usage of the green bond and provide the report on the allocation of proceeds through a Green & Social Notes Report and Barclays’ investor relations websites. The green bond by Barclays contributes to the green buildings to climate change mitigation in the UK, SDG goal 9 on Industry, Innovation and Infrastructure, and 7 on Affordable and Clean Energy.