A Step Towards Sustainable Real Estate
Commonwealth Bank, Australia's leading commercial real estate lender with an $83 billion loan book, is introducing an innovative online tool aimed at assisting mid-market landlords in evaluating the environmental efficiency of their properties and estimating the costs of potential upgrades.
Teaming up with CFP Green Buildings, a Dutch consultancy, the bank is providing customers with access to this platform, which utilizes various data inputs, including building location, age, use type, and net lettable area, to deliver valuable insights on sustainability.
The Commonwealth Bank's initiative is a response to the challenges faced by property owners, including rising energy costs and the demand for energy-efficient buildings to meet net-zero operational carbon emissions goals by 2030. According to Arup, buildings emit around 600kg to 1000kg of CO2 per square meter over a 60-year lifespan, equally divided between embodied carbon and operational carbon. The tool not only helps the bank avoid risks associated with devalued assets in a changing market but also creates business opportunities for its customers who own assets worth $130 billion, as they can potentially benefit from funded retrofitting projects.
The Green Buildings Tool allows property owners to assess their buildings' baseline emissions footprint, predict the effects of upgrades on energy use and emissions, estimate upgrade costs, and identify potential savings. Although it currently does not include Green Star ratings, CBA plans to implement them in the future.
Interestingly, CBA stands out as the first bank in Australia to offer such a platform, despite its use by several Europe-based banks, including Rabobank, Lloyds, HSBC, and ING. In Europe, where environmental regulations are more stringent, banks use the tool when originating commercial real estate loans to estimate the baseline emissions of an asset. However, in Australia, such regulations do not apply, and CBA's adoption of this tool is driven by its commitment to leveraging data capabilities to improve customer experiences and provide unique services in the mid-tier business banking market, which has seen an emergence of fintech startups targeting customer friction and profit pools.
Source: https://www.afr.com/property/commercial/cba-gives-business-clients-tool-to-measure-building-energy-efficiency-20230725-p5dr3p