Stonewater has published an ambitious set of sustainability targets, believing housing providers should do more to clearly communicate their sustainability goals to investors.
Stonewater’s Sustainable Finance Framework (SFF) and Second-Party Opinion (SPO) set out the housing provider’s plans for all its homes to be at least EPC C by 2030 and then EPC B by 2040, including the removal of fossil fuel heating.
At present, Stonewater has loans of £125m, where lower funding costs will be applied if certain sustainability targets are met.
In addition to 350 properties being upgraded each year to at least EPC C, Stonewater’s annual targets in its SFF include planting 3,000 trees and installing 200 low-carbon heating systems.
Stonewater recently placed third in Housing Digital’s Top 30 Sustainable Housing Providers.
John Bruton, executive director of Finance at Stonewater (pictured), said: “We are an early adopter of the Sustainability Reporting Standards for Social Housing.
“This is because we clearly see the value to us and our customers of demonstrating our work to investors on how we are making our homes more sustainable and affordable.
“The publication of our Sustainable Finance Framework is the next step in ensuring our debt products align with our sustainability strategy.
“While we are proud to have led the way at Stonewater on measures such as low-carbon heating through the recent work with the IPPR (Institute for Public Policy Research), there is scope to do much more.
“When we speak with investors, they are pleased to see how housing providers are already able to help them meet their ESG investment goals, but there is a general plea for greater transparency, disclosure and clarity about what different actions mean.”
Stonewater’s SFF aligns with the United Nations’ Sustainable Development Goals and other internationally recognised environmental, social, and governance (ESG) standards; and outlines how bonds, loans, and other financing instruments will be entered into.
Other commitments in Stonewater’s SFF that support these principles include:
- Build 6,250 new homes in the five-year period until March 2024
- Develop 1,500 new homes every year from 2022/23
- Develop strategies for sustainable procurement, sustainable waste management and water management
- Have no homes with an EPC rating below Band C (SAP 69) by 2030
- Reduce Stonewater’s office carbon footprint by 33% to 81.5 tons per annum and its business mileage carbon footprint by 33% to 482 tons per annum by March 2022 (compared to the financial year 2019/20)
NatWest acted as sole ESG structuring advisor in supporting Stonewater in developing the SFF and also in obtaining a Second-Party Opinion.
George Flynn, head of Debt and Financing Solutions at NatWest, said: “We’re delighted to have supported Stonewater with the structuring of its Sustainable Finance Framework, showcasing its commitment to providing warm, comfortable homes to customers and supporting them to live healthier lifestyles, while minimising the overall impact on the environment.
“This once again evidences the pioneering role the social housing sector plays in the transition to sustainable business practices and demonstrates NatWest’s commitment to the social housing sector – particularly in supporting clients in showcasing their sustainability credentials and in structuring frameworks in line with industry standards.”
In addition to the SFF and SPO, Stonewater has recently had its credit rating of A+ with a stable outlook reaffirmed by rating agency S&P.
This follows Stonewater retaining its G1/V1 rating from the Regulator of Social Housing, following an in-depth assessment.
In April, Stonewater also secured a sustainability-linked loan of £75m from Japanese lender SMBC – the second such loan, following a £50m revolving credit facility with First Abu Dhabi bank in December 2019.
Main image: Kensa and Stonewater retrofitting a ground-source heat pump in Weobley, Somerset. Credit: Kensa
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