Green Finance

The benefits of LEED and the positive impact of green construction have led to discounted financing solutions.

Original published on the US Green Building Counsel’s website. Read original article

Advancing green building through sustainable finance

According to the World Green Building Council, the ESG reporting industry will continue growing in the coming decades, with new sustainable finance tools emerging to measure criteria within organizations transparently, providing investors with an improved ability to compare investment options.

  • Green finance: The financing industry provides financing incentives to build green.
  • Green bond: A fixed-income financial instrument designed to raise money for projects that will benefit the environment.
  • Green lease: An agreement where tenants commit or receive incentives to participate in energy and water conservation, waste reduction and other sustainable actions.

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Nexus with LEED

Green financing incentives help bring the benefits of LEED certification within reach for a more significant number of tenants and property owners than would otherwise be possible. LEED-certified assets provide the basis for new exchange-traded funds, define the use of proceeds for green bonds and earn points on the GRESB ESG benchmark.

The financing industry recognizes the benefits of LEED, and the positive impact green construction has on properties, which has led to discounted financing solutions for LEED-certified buildings, including interest rate reductions, increased loan proceeds and rebates and reduced mortgage insurance premiums.