Gatehouse have committed to setting a science-based target (SBT) across all 3 scopes of emissions. As part of their baselining programme, Greengage were appointed to establish the carbon baseline of their financed emissions across their Home Finance portfolio. In addition, once calculated a pathway to net zero using SBTs is to be applied along with potential scenarios to identify possible routes to achieving the target.

Greengage reviewed the EPC data for the residential properties to determine the overall carbon emissions. Using PCAF guidelines for mortgages, the financed emissions were calculated to determine the amount of emissions to be apportioned to Gatehouse in relation to the finance provided.

To enable a split between household gas and electricity use, UK average energy usage statistics for electricity and gas were applied to split the overall emissions between the two energy types. This created a rule of thumb baseline for scope 1 and 2 emissions for each of the property types.

From here, the SBT absolute contraction approach was applied to calculate the year on year emissions reduction pathway to 2050. This created the reduction trajectory that Gatehouse would need to follow to achieve the SBT and net zero carbon.

Greengage then calculated seven hypothetical scenarios for Gatehouse to demonstrate how implementing initiatives and incentives could contribute towards achieving the target. This included the encouragement of customers to adopt home energy efficiency improvements, electric heating and heat pumps as well as solar panel installation

In addition, Gatehouse anticipated growth, portfolio changes, external market and policy factors that could impact uptake of new technologies and home efficiency measures could impact the route to achieve the SBT by 2050.

A number of recommendations on potential incentives and innovations were provided to Gatehouse as possible actions to adopt in order to begin improving energy efficiency and carbon reduction from the residential home finance portfolio.

The following outcomes were achieved from this project to assist Gatehouse with establishing the next steps of their SBT and net zero carbon programme:

  • 2020 Financed emission baseline calculated
  • SBT trajectory established
  • The impact of anticipated growth of financed mortgages was significant, resulting in the identification of immediate action to deploy incentives for borrowers to decarbonise the homes.
  • Upfront costs for technologies such as heat pumps, solar panels etc are a real barrier for homeowners.
  • The need to address household thermal envelope efficiency is paramount to domestic energy efficiency improvement.
  • Current UK government policy is not proactive enough to deliver changes required and encourage the level of market growth in heat pumps and solar panel installation
  • New build properties from 2025 will not be using gas for space heating. A need to focus on supporting existing buildings transition away from gas is needed
  • The opportunity exists to offer financial mechanisms and incentives to either supplement or exceed current UK policy is clear.
  • Opportunity for Gatehouse to provide support, products, services for mortgage customers to aide domestic carbon reduction is real.
  • The role of using transitional funds as part of the approach to offsetting can create funding to support initiatives and incentives to support the move to a low carbon economy and zero carbon society.

“Working with Greengage has been an interesting and engaging experience. Their insight and knowledge around carbon baselining, science-based targets and wider sector impact has helped us improve our understanding of the carbon impact on our residential home finance portfolio. Establishing a number of scenarios has helped us understand the challenges both in and out of our control that can either assist or restrict our pathway to achieving the SBT set. We now need to engage our customers and provide innovative solutions and incentives to encourage proactive residential energy efficiency across our financed properties.”

Geraldine Burnett, Corporate Sustainability & Responsibility Manager.

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