Green Loan

Sustainability currently dominates the agenda in all its different aspects – Environment, Social and Governance.

Against the backdrop of the 2015 Paris Climate Agreement climate protection, mitigation of climate change and adaptation to its consequences have become a focus for the financial services sector. At the end of 2019, the European Commission presented the European Green Deal – a growth strategy that aims to make Europe the first climate-neutral continent by 2050. In this context, Sustainable Finance or sustainability within the financial system aim to make a contribution to this by including ESG aspects in financial stakeholders’ decisions and steering investments towards climate-neutral use.

We also want to contribute actively and have defined Sustainable Finance as a key pillar of our ESG strategy.

In this respect and in the context of our holistic ESG strategy, we are looking at how we can support Sustainable Finance in our core lending and funding business.

As to our business model, “green” properties are paramount and we are systematically collecting sustainability criteria of the new and also of the existing properties.

Furthermore, pbb has been offering green loans as a new credit product since 2021. As yet, there is no established standard for green loans on the market. pbb has therefore developed a Green Loan Framework based on the LMA Green Loan Principle which takes into account two elements: a standalone scoring model and the EU Taxonomy.

The pbb scoring model allows for the assessment of real estate using specific criteria; when a real estate property achieves points above a set score it qualifies for green lending. As an alternative, pbb grants green loans to buildings compliant with the EU Taxonomy.

pbb’s scoring model takes into account three dimensions: the energy efficiency of a building, building certificates, and further sustainability factors. The latter include factors such as surface sealing or the availability of, and distance to, the public transportation network, as well as the use of recycled materials for construction or the type of heating and use of green electricity.

By 2026, we are aiming to finance over 30% of green loan-eligible assets in the REF portfolio. In addition, the new business volume of green loan-capable assets among our financed property properties should reach 32% by 2025. Both are aimed at supporting our clients with "green" investments or transformations, and thus offering them a positive benefit for their positioning. In this way, pbb and its clients make a significant contribution to a more climate-efficient property sector and the achievement of sustainability and climate targets. Furthermore, pbb aims to align the financed real estate portfolio with a decarbonisation pathway that is compatible with climate targets, through active management. In this context, the regulatory framework (EBA Pillar III Disclosure of Environmental, Social and Governance (ESG) Risks) specifies the NZE scenario as the reference scenario for determining the decarbonisation pathway.

Management on the basis of further scenarios (particularly for the real estate sector via CRREM paths) is standard market practice and is therefore also being pursued by pbb, based on the systematic follow-up survey of client data relevant to climate management initiated by pbb Group. The target rate for this is 75% in 2024. This transparency is an important prerequisite for the future management of our portfolio towards our intended contribution to achieving the climate targets.

In order to broaden the ESG product portfolio, pbb Group has founded a company (Eco Estate GmbH) in cooperation with Groß & Partner, which advises clients on the sustainable transformation of their own properties (so-called "Green Consulting"). In addition to offering ESG products, this enables us to support our clients on their way to greater sustainability through independent sector-specific ESG consulting. 

 

Contact

Real Estate Finance Germany

Gerhard Meitinger
+49 89 2880 16100
 

Real Estate Finance Continental Europe West

Walter Hampel
+49 89 2880 28240
 

Real Estate Finance International, UK, & CEE

Charles Balch
+44 20 7743 7739