Actions speak louder than words on going ‘green’ – Renwick

Escalating energy costs have forced many companies to confront the reality of their operational expenses. Research from EY indicates that nearly two-thirds of businesses are now prioritising cost-reduction strategies, with a sharp focus on slashing energy bills in the years ahead. This isn’t just about saving money – it’s about building a resilient and sustainable business for the future.

Beyond cost savings, there’s a powerful market incentive. Repeated surveys have shown consumers are more willing to spend, and spend more, with firms that focus on their own sustainability practices.

Operating more sustainably has always been front of mind at Atom Bank, not just in terms of what we are doing to reduce our impact on the planet, but how we can help our customers to raise efficiency standards, and that has led to recent product innovation.

What businesses need

Our discussions with brokers showed that many of their clients share our determination to do the right thing, and improve their sustainability. We wanted to make it easier for them to do just that, which led to the launch of our Better Buildings discount.

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The initiative provides a lower interest rate to those who finance more energy-efficient commercial properties. It delivers a tangible financial benefit to those who are choosing to make a responsible choice for both their business and the planet.

For properties with an Energy Performance Certificate (EPC) rating of a B, or a Building Research Establishment Environmental Assessment Method (BREEAM) rating of ‘Very Good’, a discount of 0.1% is available.

An even larger discount of 0.25% can be attained when financing properties with an A or A+ EPC rating, or a BREEAM rating of ‘Outstanding’ or ‘Excellent’.

Importantly, some of the businesses most eager to improve their efficiency position have multiple premises, so any discount becomes more impactful if it can be spread across all of those buildings. As a result, we will assess the potential discount across an entire portfolio – the borrower can qualify for the reduced rate so long as 70% of the total value of the portfolio meets the criteria.

Talk isn’t enough

Talk of pushing the mortgage industry to be ‘greener’ is nothing new. However, as an industry words won’t get us very far. If we are serious about becoming more responsible, more sustainable, then those words need to be matched with tangible action.

At Atom Bank, for example, we have the aim of becoming climate positive, not just neutral, by 2035. That’s a high bar to clear – to get to the point where we are actively removing more carbon from the atmosphere than is being produced through our operations. It’s a more ambitious pledge than we have seen from other banks in the UK, which I think shows our commitment to leading by example, and taking our responsibilities seriously.

However, to achieve that ambition will take material action. It won’t happen by accident. So alongside initiatives like the Better Buildings discount, we have also purchased 25 acres of Northumberland woodland. The trees within the woodland will sequester enough tonnes of CO2 to cover all of the carbon we’ve produced since Atom Bank launched. We’re lending money into areas that have a positive impact too, supporting natural capital projects, which sell the Biodiversity Net Gain (BNG) units that are required for housing developments.

If we are to become a more sustainable, responsible industry, then talk isn’t going to cut it. Firms across the board, from lenders and distributors to brokers and conveyancers, need to step up and work out ways they can make a difference.

Working together

The Better Buildings discount is obviously the result of our focus on sustainability, but it’s also a good example of how broker dialogue can – and frankly should – inform lender activities.

This discount wasn’t just plucked out of thin air – it was our conversations with brokers that highlighted precisely where the barriers were that were preventing businesses from taking that positive action today. Utilising those insights allowed us to devise a scheme that works for everyone involved, which is why it’s had such a strong response already.

Choice and competition are far stronger today in the commercial mortgage space than has been the case in recent years. One of the most encouraging findings from our quarterly Pulse survey of commercial mortgage brokers has been brokers are finding it easier to access funding for their clients, something they have put down to the level of choice.

In order to stand out from the crowd, lenders must put broker feedback at the heart of their planning. Those conversations can help us identify the sectors that are under-served, the product tweaks and innovations that can open up new opportunities.

Brokers and lenders have something akin to a symbiotic relationship, in that we win together, and we lose together. But by acting on broker insights, we can ensure there are more wins than losses, and support more businesses in meeting their aims.