Making A Difference
Given that ESG is multi-faceted and constantly evolving, we use our ESG policy to focus on areas where we can have the most impact.
Responsible Lending Through Environmental, Social and Sustainable Governance
As we are currently unable to offer incentives to borrowers through pricing because of our own cost of capital, we are limited through deal selection and education. We do have a programme of ESG-related projects that have been scoped and are ready to be implemented with a more flexible capital structure.
ENVIRONMENT
We recongise the impact of house building on the environment, and we try to support schemes that have planning permissions that specifically aim to better the local environment. This includes the use of solar, waste management and low emission buildings.
In the future, with the right capital backing, our plan is to offer financial incentives to our borrowers that score higher on a proprietary ‘green scale’ that assesses factors such as: energy efficiency, natural resources and eco building materials.
Moreover, our model will enable a particular developer to assess their scheme at the beginning of the build and again at the end. If there have been improvements, we aim to offer further financial incentives via reduction in exit fees.
We have already identified a provider of the ‘green scale’ which we believe is more a robust tool than the typical EPC rating.
Social
We understand that there is a chronic shortage of housing in the market and we are already working alongside LDS, a sales guarantee provider, to reduce SME developers’ equity contributions to incentivize them to take forward more schemes. We have contributed to a marketwide study alongside Savills and LDS to explore how to unlock £40Bn of housing supply.
https://ldsyoursite.com/news/savills-sme-housebuilders-report-demonstrates-huge-potential/
Since inception, we have already supported over 200 SME developers with loans totaling £190 million. We brought over 600 residential units to the market, with a total GDV of £360 million.
Going forward, we are also discussing how the British Business Bank can support us further in this effort through their ENABLE scheme.
Governance
We are an equal opportunities employer, and we are determined to ensure that no applicant or employee receives less favourable treatment on the grounds of gender, age, disability, religion, belief, sexual orientation, marital status, or race.
Our team follows a comprehensive credit policy which helps to manage risk within our loan book.
We have monthly management and quarterly board meetings as well as weekly sales and credit meetings. These help to manage operational risk and maintain our corporate strategy.