Unlocking additional investment for your retrofit programme with Retrofit Credits

The lead view…01.11.2212:00 AM by Justine Bourne

The challenges facing the social housing sector in decarbonising its stock are well rehearsed. Retrofitting social housing stock is estimated to require an investment of over £100 bn. The Government, thus far, has pledged just under £4bn

HACT Retrofit Credits

At the same time, the demand for a supply of quality carbon credits continues to grow. In 2021, organisations, businesses, and corporates from across the global economy funded the reduction of 164 million tonnes of emissions by investing through the carbon markets in projects outside their own carbon footprint. That’s more than twelve times the total emissions of the UK social housing sector. Yet none of that investment is currently directed to projects in the sector, with the majority related to reforestation schemes overseas.

What has been missing is an accredited route to originating internationally recognised carbon credits backed by the emission reductions and social value achieved through housing retrofit. HACT, together with Arctica Partners, has launched Retrofit Credits, a service that will enable housing providers to access, for the first time, this additional and significant source of funding.

Retrofit Credits can help bridge the funding gap that the sector faces, rewarding social landlords for delivering on their commitment to decarbonisation. Improving energy efficiency is good for both people and planet and the UK Social Value Bank demonstrates that wellbeing improves when people live in warmer homes they can afford to heat. By pioneering a new carbon credit approach, we are also creating new relationships between companies who want to off-set their carbon, and social landlords who need to retrofit homes, for the benefit of local people and communities.

What is Retrofit Credits?

It is UK-based, only the second verified scheme to be so.

It is the only project in the world originating carbon credits for the decarbonisation of housing stock.

It incorporates social value, measuring the positive impact retrofit has on residents’ lives.

The project therefore presents a unique opportunity for organisations with UK operations to invest in local housing organisations, funding emission reduction projects that have a positive impact on the lives of residents in the communities in which they operate.

Developed by HACT and Arctica Partners, Retrofit Credits is a carbon credits scheme that unlocks additional funding into social housing retrofit by verifying the emission reductions and social value of retrofit projects – combining the Net Zero Goal with an intrinsic part of the sectors DNA.

It will operate on a bilateral basis, matching providers with buyers who are looking to form long-term relationships with the sector. Strong governance principles and clear standards are fundamental to the proper supply and use of credits. Through the pilot, we will develop an ethical framework to ensure this carbon credits scheme has integrity and actively supports decarbonisation activity. This means housing providers can be confident that they are working with trusted organisations, who are making meaningful steps toward their own decarbonisation. At scale, we aim to be able to match buyers with operations in the local communities of the homes, facilitating a long-term relationship with the provider where this is desirable.

How it works

HACT and Arctica Partners, have developed a methodology to measure the carbon savings and social value created through retrofit activity. To ensure the environmental integrity of the issued credits, this project has been developed under the Verified Carbon Standard, the world’s leading certification program for emission reduction projects.

Retrofit Credits include an attached social impact value, calculated using the UK Social Value Bank – the social housing sector’s leading measurement of social value that is endorsed by the Government’s Green Book. This can be aggregated to measure the impact of energy efficiency programmes at neighbourhood, place, and national levels.

How to get involved

To test the methodology and social value outcomes, to develop an ethical framework and engage potential buyers, we have launched the Retrofit Credits pilot, which will run until June 2023. The first carbon credits will be issued in early 2023, with the scheme being expanded across the social housing sector, and beyond.

We have our first buyer secured and more prospective buyers from a range of sectors lined up. For housing associations, it’s the perfect time to get involved with credits waiting to be purchased.

Being part of the pilot scheme will enable housing associations to secure this additional funding at the earliest possible time and it is simple join with no up-front costs to pay. To learn more about Retrofit Credits and how to get involved contact Customer Relationship Lead, Antoine Pellet from the HACT team.

HACT will be exhibiting at Unlock Net Zero Live on the 23^rd & 24^th November at the ExCeL, London where you will be able to find out more about the Retrofit Credits scheme.