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Green Star - Performance data to accelerate climate bond issuance in Australia

Green Star – Performance data will meet the reporting requirements of the Climate Bonds Standard, thanks to a new partnership between the Green Building Council of Australia (GBCA) and the Climate Bonds Initiative.

The internationally-recognised Climate Bonds Standard has been developed to help investors determine the best investments for addressing climate change.

According to the GBCA’s Chief Executive Officer, Romilly Madew, Australian property owners can now leverage Green Star – Performance data on greenhouse gas emissions to attract new sources of funds from large-scale institutional investors seeking low-carbon assets.

“Green bond issuance tripled globally last year to $36.6 billion – and that figure is expected to double by the end of this year.  It’s clear that the market is looking for guidance to determine energy-efficient and low-carbon assets that will be sustainable investments over the long term,” Ms Madew says.

“Green Star – Performance greenhouse gas emissions data will be recognised by an international investor-grade standard.  This agreement will ensure the industry avoids duplication of effort in reporting and verification, and will accelerate investment in buildings that are better for the environment, communities and investors,” Ms Madew adds.

To qualify for Climate Bonds certification, proceeds must be dedicated to buildings that are able to demonstrate low-carbon emissions in operation for the life of the bond through an annual monitoring and verification process.  Buildings must meet the Climate Bonds low-carbon trajectory in terms of carbon intensity, and the greenhouse gas emissions data underlying a Green Star – Performance rating can be used to verify that.

“A Green Star – Performance rating, which requires annual reporting on greenhouse gas emissions and water consumption, provides a clear avenue for portfolio owners wanting to fund upgrades or refinance existing low-carbon buildings through climate bonds,” Ms Madew adds.

Sean Kidney, CEO of the Climate Bonds Initiative, said “Green Star has been a pioneer in building ratings; our partnership will make it easier for building portfolio owners and lenders to access the humming green bonds market. Green property bonds now stand to become the largest slice of the green bonds market.”

Climate Bonds certification is granted by the Climate Bond Standards Board, representing $34 trillion of investors around the world.

The GBCA will also confidentially share data on greenhouse gas emissions from Green Star – Performance buildings.  This will enable Climate Bonds Initiative to set low-carbon market benchmarks and associated trajectory in other sectors – including the retail, industrial and university sectors.

Ché Wall, Lead Expert of the Climate Bond Initiative’s Technical Working Group for Low Carbon Property and the founding Chairman of the World Green Building Council, says: “Providing objective, robust and verifiable measures tailored for specific market participants to allow them to direct their efforts towards climate change mitigation opportunities is essential. When those measures can be efficiently shared between complementary schemes, such as the Climate Bond Standard for Low Carbon Property and Green Star, everyone benefits.”

“Globally, buildings account for around 30 per cent of all energy-related carbon emissions.  This collaboration between GBCA and Climate Bonds Initiative will enable us to establish the essential link between climate bonds and Green Star – Performance, and help building owners to raise the capital they need to embark on building upgrades that deliver low-carbon, efficient and sustainable assets,” Ms Madew concludes.