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Sustainable mortgages: designed as if people and the planet matter



Mortgages aren’t everyone’s first choice of specialist subject. Most people see them as an important but uninspiring means to an end: owning a home. But what if they were more than that? What if mortgages were a force for good in the world? What if they actually helped build a more sustainable future? Anna Laycock of Ecology Building Society says they are and they can.

This article originally appeared in Blue & Green Tomorrow’s Guide to Sustainable Homes 2013.

The concept of sustainable mortgages isn’t as new as you might think. At Ecology, we’ve been doing them since 1981, and we’re not the only ones to claim to offer a ‘green mortgage’. But like any type of ethical investment, some claims stand up to examination better than others.

Let’s look at some green mortgage offers, past and present. Ecology aside, there are broadly three claims to sustainability, which I’ll present in reverse order of credibility.

1. Your statements are printed on recycled paper

Moving swiftly on…

2. We plant some trees on your behalf

We love trees at Ecology; the more the merrier. But given that each of our homes generate 3.2 tonnes of carbon each year, before we even consider the global carbon impact of the financial industry, even a forest of mortgage-backed pines isn’t going to do the job. Perhaps it’s better to save the carbon in the first place?

3. You can use it to do green stuff

Click here to read The Guide to Sustainable Homes 2013

Now we’re talking. In the wake of rising energy prices and the launch of the green deal, we’ve seen some lenders begin to offer additional borrowing facilities for energy efficiency improvements. The money has to be used to install measures from a pre-defined list, usually ranging from insulation to small-scale renewables. Given that green deal rates are around the 7% mark, this could be a simpler and cheaper way to save energy at home. But what we’re really looking at here is a greenish add-on to a mortgage, rather than a mortgage that’s genuinely sustainable.

The dire state of our housing stock and the threat of irreversible climate change demand a better response than this. So what does a genuinely green mortgage look like?

For a start, it’s about sustainability in the fullest sense of the word, embracing people and their homes, communities and their environments. That’s why we’re called Ecology: the term is derived from two Greek words: oikos, meaning home, and logos, meaning science or knowledge. So the word implies understanding of our home.

Sustainable mortgages apply this concept to lending decisions, supporting properties that respect their environment and enable communities to flourish. That’s why you’ll see Ecology supporting housing co-operatives and affordable housing projects as well as pioneering eco-builds.

The hallmark of a sustainable mortgage is how the lending decision is made. Mainstream lenders look at potential borrowers from a purely financial perspective: what’s the risk and what’s the reward? Customers are sources of profit – anything that doesn’t relate to this is largely irrelevant.

Ecology sees things differently. Our members are agents for change. We need to consider the financial risk of a project to ensure that we’re protecting our members’ deposits, but what we’re really interested in is ecological risk and reward. Our lending decisions are based on whether the project has an environmental and social benefit, whether minimising its negative impact or creating a net positive.

You could argue this makes us a niche lender, because it means we’ll only lend to projects where we can see the sustainability benefit. But in reality it means we’ll often lend on projects that other lenders won’t consider, because they see them as innovative or unfamiliar. For us, the ecological consideration overrides that – and after 32 years of lending, there’s not much we haven’t seen before. So we lend for self-builds, conversions, restoration of derelict properties (including empties), alternative tenures like cohousing and properties built with unusual materials, such as straw bales, timber or cob.

We can consider projects that are out of the norm because our decisions are made by human beings. This may not sound radical, but in the world of financial services, it really is. Rather than the computer-says-no approach, our team treats each application individually and weighs up the ecological and financial benefits and risks. By doing this, we help to spur the development of new ecological building approaches and pave the way for other institutions – our groundbreaking lending for self-build catalysed the development of the UK’s self-build mortgage market.

If you’ve got a mortgage, the chances are the interest rate is pretty important to you – and it’s the same with a sustainable mortgage. The difference is that for a genuinely sustainable mortgage, the price (the interest rate) is aligned to ecological impact. How much you pay for borrowing money should reflect the sustainability credentials of your project. So Ecology C-Change discount scheme adjusts the price of our mortgages to reflect a property’s climate impact.

There are three versions of the discount: C-Change energy efficiency is based on the energy efficiency measures or renewables installed, C-Change sustainable homes is based on achieving a recognised energy efficiency standard, and C-Change retrofit is based on improvements in a home’s energy efficiency. We introduced the latter to extend our offer to the 26m leaky, inefficient homes in the UK, recognising that we needed to drastically improve the efficiency of our existing housing stock if we are to meet our emissions reduction targets.

The challenge shouldn’t be underestimated: our homes currently contribute over 27% of our carbon footprint. If your home is draughty and cold, you’re part of the problem. But it’s not just about trying to ensure our atmosphere can still sustain us – it’s also about a much more immediate problem. Energy bills have risen on average £300 over the past three years and today 2.4 million people live in fuel poverty.

A home that wastes energy just isn’t economically sustainable. That’s why we want to see other mortgage lenders follow our approach: because it’s in the interests of their borrowers as well as the wider environment.

While we’re on the subject of money: have you ever thought where your mortgage comes from? Who provides the money? That’s an important part of a sustainable mortgage, too. Ecology’s mortgages are funded by our savers, a community of people who want their money to build a better future. We don’t borrow money on the wholesale markets – we simply connect savers and borrowers who share the same values. Likewise, the profit that we make belongs to our members and is retained to fund future lending. The interest you pay on your mortgage will be contributing to your bank’s profits. What are they doing with it?

Sustainable mortgages aren’t about add-ons and they aren’t about gimmicks. They’re mortgages designed as if people and the planet matter more than profit. They’re a form of money that knows its place: a means to a (sustainable) end. We lend sustainably because our mission is to build a greener future. We couldn’t do anything else.

But why would you want a sustainable mortgage? Perhaps you’re already investing ethically, and you realise that how and why you borrow has just as many ethical implications. Perhaps you want the way you live and the place you live in to reflect your concern for the wellbeing of your household, your community and your environment. Perhaps you just want a home that’s comfortable to live in and doesn’t cost the Earth in energy bills. They’re all good places to start.

So if you’re curious, ask your mortgage provider what their approach is to sustainable lending. See if they mention recycled paper.

Anna Laycock is communications and research manager at Ecology Building Society.

Further reading:

Solo living is not helping the only Earth we have

Sustainable design should change our behaviour for good

Energy efficiency needs a ‘foot in the door’ of home renovation market

UK second worst for fuel poverty in EU – as groups warn over coming ‘crisis’

The Guide to Sustainable Homes 2013


New Zealand to Switch to Fully Renewable Energy by 2035



renewable energy policy
Shutterstock Licensed Photo - By Eviart /

New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.

New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.

Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.

Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”

The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.

Zero net emissions by 2050

Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.

Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.

She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.

Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”

A worldwide shift to renewable energy

Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.

Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.

Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.

Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.


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How Going Green Can Save A Company Money



going green can save company money
Shutterstock Licensed Photot - By GOLFX

What is going green?

Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.

The first step in going green

There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.

Making needed changes within the company

After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.

Reducing the common paper waste

paper waste

Shutterstock Licensed Photo – By Yury Zap

Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.

Make money by spreading the word

Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.

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