Sustainability in AIB

In AIB, we place sustainability at the core of our strategy.  We work with our customers to deliver an optimum outcome for them, for AIB and for society. 

The bank has committed to being carbon neutral in our own activities by 2030 and in our lending operations (excluding agriculture) by 2040.  Furthermore, we aim to have 70% of our new lending as green or transition by 2030.

AIB has issued Green Bonds (€3.25bn) and Social Bonds (€1.75bn), the first Irish bank to do so.  We have also launched a €500m social housing fund for the development and/or long term hold of social housing.

The role of AIB Real Estate Finance

Our AIB Real Estate Finance (REF) team are conscious that property accounts for 39% of the world’s carbon emissions and therefore we have a key role to play in the targets set by the bank and those set by international governments.

The Irish Building Regulations place high expectations on our customers and it is therefore critical that we are best placed to provide guidance and support to customers as they navigate the rapidly evolving ESG agenda.

Development finance

The building regulations already demand standards on the construction industry which result in Building Energy Rating (BER) of ‘A’ in all instances, aligning with both the European Union (EU) Taxonomy and with the Bank’s green requirements. 

However, at AIB we look to do more and we therefore worked with the Irish Green Building Council (IGBC) to develop an offering that provides a margin reduction for those developers that reach the IGBC’s Home Performance Index (HPI) standard, or equivalent.  This is materially above BER standards, encompassing such areas as public transport, water efficiency and embodied carbon.

Investment funding

When it comes to investment, the challenge is more complex with the demands of tenants and regulators ensuring greater demand for commercial buildings with a BER rating of ‘A’ or ‘B’. 

It is estimated that 80% of the world’s buildings in 2050 already exist meaning that the focus will be on retrofitting.  There are currently an estimated 109,000 commercial buildings in Ireland and the Irish government has set a target that one-third should have a BER rating of B or better by 2030, representing over 36,000 commercial properties.

REF aims to work with our customers to incorporate a retrofitting plan into their property strategy to ensure that their properties remain viable as the regulatory requirements grow. 

The retrofitting solution is also better for the environment given the benefits it offers from an embedded carbon perspective.

Talk to us

Sustainability is an emerging and rapidly growing aspect of the property industry, both for developers and for investors.  Our advice is to engage early with your funder, and we encourage you to speak with your relationship manager.  Our teams have received specialist training and are supported by our Head of Sustainability, Paul Kelly.

To help inform our staff and to represent our customers, AIB Real Estate Finance is a Platinum Member of the Irish Green Building Council (IGBC).  We are also a member of the national steering committee for ENACT, an initiative led by the Sustainable Energy Authority of Ireland which seeks solutions to the retrofitting challenge faced by property investors.