A pan-European Label to certify sustainability of housing companies

About the positive impact of affordable housing

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A new market for sustainability investments

Affordable housing has many social and environmental aspects. The label is the first certified tool to measure the positive impact of affordable housing companies. It makes the entire sector visible to the capital market and accessible to a broad range of investors as low-risk asset class.

Why a sustainability label for affordable housing?

Growing Attention

Sustainability is increasingly drawing the attention of the capital market. The capital market created impact investing opportunities and categorized projects into three segments: Green, Social and Sustainability. Affordable housing companies with their positive social and environmental impact qualify for the sustainability segment.

Impaired Market Access

Proving its positive impact is indeed an issue for the affordable housing sector. Thus, market access to impact investors is challenging for them although the lack of assets is currently the bottleneck for market growth.

Large Impact

The existing housing stock provides affordable housing companies with tremendous potential to make a positive impact as they offer primarily below market rate rents and potential for energy efficiency savings.

From Project to Corporate Finance

The market is developing more and more from project to corporate financing. This requires greater trust in the issuer of a financial product as transparency about the use and the management of sustainable proceeds becomes more difficult. The label as an industry standard serves as external proof.

QUALITY FEATURES OF THE LABEL

The label is applicable to housing companies of all sizes and legal forms in a wide range of European countries and jurisdictions.

The query and evaluation of a total of more than 30 individual criteria in the two categories Green and Social ensure a thorough assessment of the sustainability profile of the respective housing company.

The label aligns with the market standards, the Green Bond Principles and Social Bond Principles issued by the International Capital Market Association (ICMA).

COUNTRIES that are ALREADY INTRODUCING THE LABEL

Certification processes under way or completed

Upcoming projects

Gewobag, Germany

Label holder

Clarion, UK

Label holder

Ymere, Netherlands

Label under Review

Vilogia, France

Label holder

Benefits

for housing companies

  • Highlight sustainability focus and communicate environmental/social commitments towards multiple stakeholders
  • Simplified access to Impact Investing market through proof of sustainability
  • Access to alternative financing products and diversification of investor base

For investors/LENDERS

  • Simplified and validated access to a new asset class for sustainable investments
  • Simplified and validated identification of affordable housing providers for impact investing

WHAT DOES SUSTAINABILITY MEAN IN TERMS OF AFFORDABLE HOUSING?

Social CRITERIA

Tenants are strongly affected by activities of the housing company. Criteria reflect both the living conditions of tenants and the resident structure of a housing company:

  • The housing company provides affordable housing to broad sections of the population
  • The housing company provides affordable housing with rent levels below local market average
  • The housing company enables an active involvement of its tenants
  • The housing company allocates a significant portion of newly built dwellings for affordable housing
  • The housing company provides socially sustainable surroundings with a special view to community development goals
  • The housing company provides social activities for tenants

green CRITERIA

Ecology is a major challenge for housing companies and needs to be implemented in different stages of a building’s lifecycle – special attention must be given to the existing housing stock as it makes up for a majority of the stock and provides the greatest leverage for improvement.

  • The housing company is engaged in the installation of renewable or alternative energy sources
  • The housing company emphasizes a high energy efficiency of their new buildings
  • The housing company increases tenants’ awareness of energy consumption and reduction measures
  • The housing company provides ecologically sustainable surroundings with a special view to community development goals

Economical

The label measures the positive impact of affordable housing companies. Thus, it is a social and environmental standard. It is not a substitute for financial due diligence or credit rating.

Meeting the UN’s Global Goals for Sustainable Development

The United Nations have developed seventeen Global Goals for Sustainable Development (SDG) that have become benchmark goals for impact investing. Housing companies can potentially have a positive impact on at least 7 of them.

Learn more about the impact of the Certified Sustainable Housing Label on the fulfilment of the aforementioned SDGs:

Good health and well-being

Maintaining and promoting health and well-being of tenants is a central element of sustainable housing companies’ operations.

Affordable and clean Energy

As buildings are responsible for a large proportion of annual CO2 emissions, housing companies have a great leverage to reduce the carbon footprint of their housing stock and their tenants.

Industry, Innovation and infrastructure

Housing companies are in a strong position to promote important trends like smart mobility and smart city and thereby creating an innovative infrastructure.

Sustainable Cities And Communities

Housing companies engage to create sustainable, inclusive and safe residential cities and communities.

Responsible consumption & Production

Recent developments in the construction industry promise previously unprecedented possibilities for the recycling of building materials.

Climate action

Improvement of buildings’ resource efficiency contributes to the saving of CO2 emissions. Moreover, tenants’ awareness and behaviour for energy efficiency can be addressed.

Life on land

Housing companies own urban spaces where biodiversity is endangered. Thus, they can engage for the biodiversity of cities and communities by promoting biodiversity projects.

The Certification Process

We have developed standardized processes to efficiently audit housing companies of all sizes and nationalities.

Label Certification Process

1

Determining Internal Framework
& Company Reporting

1 – Prequalification (General, Legal, Financial)

Questionnaire

The applicant for the label provides all necessary information in a predefined questionnaire.

2 – Data collection for Tenant (“Social”) and Ecology (“Green”) criteria

Criteria Catalogues

The applicant is reviewed based on two different criteria catalogues (social/ecological).

3 – Individualization of the framework, implementation of necessary processes

Template Financial Framework

The applicant receives a template that has to individualized to ensures that it provides a clear impression of the company's sustainability profile.

Internal Handbook

The applicant receives a template for an internal handbook which has to be individualized. In the end it should explain how the Financial Framework is implemented by the company in detail.

2

RITTERWALD Review  

Granting of review opinion

3

External Certification

Certification of a Second Party that the prerequisites for obtaining the label have been fulfilled in terms of content and the process of awarding the label has been carried out in accordance with the regulations

4

Approval (or rejection) of the label

How it works

Questionnaire

The applicant for the label provides all necessary information in a predefined questionnaire.

Criteria Catalogues

The applicant is reviewed based on two different criteria catalogues (social/ecological).

Template Financial Framework

The applicant receives a template which has to be individualized to ensure that it provides a clear impression of the company's sustainability profile.

Template Internal Handbook

The applicant receives a template for an internal handbook which has to be individualized. In the end, it should explain in detail how the Financial Framework is implemented by the company.

Timeline

Label Review Process

1

Annually:
Company Reporting

Conducting annual impact and financial reporting

2

Annually:
RITTERWALD Review

Review of the annual reportings

Evaluation of improvements and needs

Granting of Review Opinion

3

Every three years:
Evaluation by Second Party

Re-evaluation by Second Party

Granting of External Certification

4

Approval (or withdrawal) of the label

VERIFIED BY A SECOND PARTY

For each audit process, an independent party shall be mandated to assess the compliance of the current evaluation with the methodology of the Certified Sustainable Housing Label. Thereby we ensure the label is in line with market standards and strengthen confidence in our product and our label holders.

Contact

For all questions about the application, certification process, access to the financial market please contact:

Ad Hereijgers

+ 31 20 208 21 74
ad.hereijgers@ritterwald.nl

Lutz Rittig

+ 49 69 78 80 88 02 10
lutz.rittig@ritterwald.de

Dr. Mathias Hain

+49 30 609 85 82 41
mathias.hain@ritterwald.de

AMSTERDAM

Gustav Mahlerplein 74a
1082 MA Amsterdam
The Netherlands

FRANKFURT

Friedrichstrasse 52
60323 Frankfurt/Main
Germany

BERLIN

Neues Kranzler Eck
Kurfürstendamm 22
10719 Berlin
Germany