RIBA 2030 Climate Challenge provides targets for new low carbon loans
A new development loans package has been set up which incentivises low carbon building by requiring developers to hit the RIBA 2030 Climate Challenge targets.
Could competitive development loans act as a driver for building sustainable low carbon homes?
That is the theory being tested by lender Atelier's Carbonlite Challenge. The scheme rewards developers that successfully meet emission saving targets with a rebate on the loan.
The Carbonlite Challenge is currently in its pilot phase, which will initially run until June next year. It has been developed with RIBA support and has adopted the RIBA 2030 Climate Challenge targets for participating projects to hit. Either the interim RIBA 2025 target or the more ambitious 2030 are being accepted for the pilot.
The process begins with the developer agreeing to abide by a series of declarations in a six page Sustainability Charter for the project.
Chris Gardner, co-founder of Atelier, states that this charter does not only concern the building's carbon emissions, but also covers:
the way the participant manages its business and its supply chain
site management and waste reduction
daylight studies and ecology reports
the flow of information needed for periodic assessments
The first project to get the go-ahead under the Carbonlite Challenge is a development of six homes in a partly wooded site in Dulwich, South London, designed by architecture practice Craftworks. The practice will be acting as developer through its development arm, The Edition Group, and as lead contractor.
As developer, it has agreed terms on a £10m loan to finance the development. Upon successful completion of a post-construction Carbon and Sustainability Assessment, it is expecting to receive a rebate of over £200,000 on loan costs.
Architects marching in Central London during the Global Climate Strike in September 2019.
Craftworks Director John Smart believes Atelier's scheme is well suited to the type of architect-developer they are, as they have control of the supply chain as well as the design itself.
"The reduction in finance costs is allowing us to invest more in the buildings. It is not just about the money; it is allowing us to go beyond what we would normally do to deliver a more sustainable development."
The houses will be all timber construction, with cross-laminated timber (CLT) structures that will be largely fabricated off site, which will keep waste to a minimum. They will feature high levels of airtightness, triple glazing and green roofs.
Smart states that the project is aiming to meet the RIBA 2025 target rather than the 2030 target, largely due to groundworks and the current expectation that they will need concrete piled foundations, which will impact the buildings embodied carbon score.
The 2025 target requires operational energy to be half the level of Building Regulations compliance (60 kWh/m2/y) and embodied carbon to be reduced by about one third compared to a business as usual case based on Whole Life Carbon analysis (800 kgCO2e/m2).
The Carbonlite Challenge pilot scheme has some £25m available to lend, which is likely to be shared between a handful of housing developments. Only ground-up new build housing is being considered for the pilot, but retrofit projects could be added if the pilot proves successful.
The current offer is for development loan finance set at 4.99% for housing schemes meeting 2030 targets (an effective 2% rebate on the standard rate), and 5.49% for achieving 2025 targets (an effective 1.5% rebate on the standard rate).
Gardner is hoping that architects who are setting ambitious sustainability goals for their housing designs might make their clients aware of the challenge's funding incentives as a way in which they can both raise their ambitions.
"We know that there are lots of developers who are ambitious about sustainability," states Gardner. "We are hoping we can provide a solution."
Thanks to Chris Gardner, COO and Joint Managing Director, Atelier; Reece Lake, Programme Director, Atelier; and John Smart, Director, Craftworks.
Find out more about the RIBA's 2030 Climate Challenge, read some FAQs and download the guide to working with clients.