Enabling Building Decarbonization Through Sustainable Finance

This document is a technical report that discusses the role of sustainable finance in facilitating building decarbonization in Europe. It outlines the urgent need for significant investments in the building sector to meet the European Union's greenhouse gas reduction targets. The report highlights that the building sector is responsible for approximately 36% of GHG emissions and emphasizes the necessity for innovative financial products to support this transition. It details the preparatory research conducted by PCAF, which included interviews with financial institutions to identify suitable financial and non-financial products that can incentivize emissions reduction. The report describes various financial instruments, such as sustainability-linked loans and green mortgages, as well as non-financial products like digital platforms and energy modeling tools. The findings aim to provide guidance for financial institutions on how to effectively link these products to achieve decarbonization goals in the building sector, thereby contributing to a net-zero emission building stock.