Lloyds Banking Group aims to deliver £1.5bn funding to social housing in 2021, with at least £500m going towards environmental, social and corporate governance spending (ESG).

Since 2018, Lloyds Banking Group has provided £9bn of funding to the UK’s social housing sector, outstripping its original £2.25bn funding commitment by £6.75bn over this period due to strong sector demand and the group’s appetite to support more social housing and ESG projects.

The funding has been delivered by the group’s Lloyds Bank, Bank of Scotland, Scottish Widows and Lloyds Bank Corporate Markets teams.

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The bank say their funding has aided the creation of more, high quality homes helping housing associations provide homes for those on the lowest incomes.

In the past three years, transactions have included £350m to Midlands-based Platform Housing Group to support one of the UK’s largest social housing development programmes and a £250m sustainability linked Bond for Aster Group, which owns and manages over 30,000 homes across the south of England.

The ESG funding ambition aims to support the sector to accelerate its investment in creating greener homes through the construction of sustainable new builds and the retrofit of existing properties to help the sector continue its decarbonisation journey.

Earlier this year, the group announced it was furthering its transition to a low carbon economy with an expanded target of net zero by 2050, or sooner.

As part of this stated target, it was revealed that Scottish Widows will halve its carbon footprint by 2030.

Lloyds Bank and Scottish Widows have become early adopters of the Good Economy Framework’s Sustainability Reporting Standard for Social Housing.  

The standard provides a framework for housing associations to voluntarily disclose their ESG performance in a transparent and comparable way, which will also help inform future funding decisions.

In addition, housing associations have access to the bank’s ‘Green Buildings Tool’ which enables them to assess the energy efficiency of buildings and makes recommendations on how this can be improved.

The bank says it has assessed the energy retrofit requirements of over 200,000 homes in the social housing sector and is now working with clients to enable them to measure and plan to improve the sustainability of their stock. 

David Cleary, managing director, head of housing at Lloyds Bank, said: “Sustainability is rightly dominating the agenda for the social housing sector.

“The market-leading amount of funding we’ve delivered in the past three years and our plan for the year ahead underlines our ongoing commitment to social housing and to the UK’s green prosperity and economic recovery.

“Measures to improve the green credentials of the UK’s social housing stock is of dual benefit for the planet and for people.

“It benefits tenants by creating greener homes with typically lower running costs and helps tackle the climate emergency.

“The development of new homes and retrofitting of existing ones also supports jobs in the small and large companies undertaking the work.”