The private lending sector is paying greater attention to financing sustainable real estate projects globally. This is due to a combination of customer demand and internal impetus from the lenders themselves. The Loan Market Association has published a set of Green Loan Principles. In 2020, it published two sets of guidance on the application of the Green Loan Principles in the real estate finance investment lending and lending context, for green buildings and retrofit projects. In 2022, it further published guidance on the application of the Sustainability-Linked Loan Principles in real estate finance and real estate development finance. Green loans and sustainability-linked loans are different, with a green loan requiring a firm link to new or existing green projects. Conversely, a sustainability-linked loan is designed to incentivize specific sustainability performance objectives of the borrower.
In the UK, there are no other specific private green financing initiatives for sustainable real estate projects.
As for public green financing initiatives, the government established the UK Green Investment Bank in May 2012, as a government-owned public limited company with GBP 3.8 billion of taxpayer funding to be invested in sustainable projects on a commercial basis in partnership with the private sector. It was required to deploy at least 80% of its capital in three priority sectors, namely offshore wind farms, recycling and energy from waste, and non-domestic energy efficiency. However, in 2017, the UK Green Investment Bank was privatized, and is now the Green Investment Group (GIG), a specialist green investor within Macquarie Asset Management. The GIG has five "green purposes," to which every investment must contribute. These are protected by independent shareholder, the Green Purposes Company (GPC). The green purposes cannot be altered without the approval of the GPC.