28 Skyline | Edition 3 | Winter 2021
The foundations have been laid but more needs to be done to build this sector
Open any newspaper or mobile news app and you will find a near constant flow of stories about extreme weather , the warming planet and the impacts of climate change on our lives . We are living through times that are frequently deemed uncertain , unprecedented or groundbreaking . But this is for good reason .
Craig McKinlay
New Business Director Kensington Mortgages
Particularly in the wake of the COP26 summit , it is important to refocus on practical ways we can all individually contribute to society and mitigate the threat of climate change . As people become more aware of their role in helping to reduce carbon emissions , so too are businesses . ESG ( Environmental , Sustainability and Governance ) has become the great business buzzword of our age , its importance being espoused from CEOs of global corporations to those founding start-ups or running small businesses . There ’ s an increasing awareness of how certain actions that may appear ‘ small scale ’ can impact our climate at a global level .
Amongst this trend is a growing understanding of the role that housing plays in terms of carbon impact . According to government figures , existing UK housing stock is responsible for one-quarter of UK carbon emissions . [ 1 ] The Citizens Advice and the Energy Savings Trust has also found that over a third of UK households , the equivalent to 9.7 million , have not changed the way they use energy in recent years . [ 2 ]
The housing industry urgently needs to begin taking on this issue and improving the energy efficiency of our homes is one of the best ways to help the UK transition to a low-carbon economy .
The UK has made some big climate commitments . At COP26 in November , the government recommitted to ensuring that all new heating systems installed in UK homes are low carbon from 2035 . [ 3 ] And in 2019 , the UK made the bold pledge to reach net-zero emissions by 2050 . To help achieve this , the government introduced a £ 5 million fund to support the financial services sector develop green home products , in the form of equity loans and home improvement loans , and ex-housing secretary , Robert Jenrick , unveiled a new green standard to bring an environmental revolution to homebuilding . [ 4 ] The Green Homes Grant Scheme ( GHGS ) was also launched in 2020 , with £ 320 million allocated towards energy efficiency and low carbon heating schemes for lower-income households . For the mortgage industry , this funding allowed us to start creating products which incentivised the greening of one ’ s household , aka green mortgages .
While consumer awareness of green mortgages is a little low , with 43 % of those surveyed by the Intermediary Mortgages Lenders Association ( IMLA ) in 2020 having never heard of them , lenders and brokers anticipate a steep uptick in demand . [ 5 ] IMLA ’ s report further states that three-quarters of lenders and over half of mortgage brokers foresee demand for green mortgages growing over the coming years .
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Many borrowers also assume green mort-