Sustainable Building Finance: Supporting green mortgage development in Sri Lanka
A GEF-funded (Global Environment Facility) project on “Global best practices on emerging chemical policy issues of concern under SAICM” was launched in 2019, targeting Sri Lanka amongst other countries. The activities under the project include a focus on tracking and controlling chemicals along the value chains of the building and construction sector. To that end, a team from the UN Environment Programme (UNEP) have been working with stakeholders in Sri Lanka on identifying chemicals of concern in the construction material value chain and working with manufacturers on end-product reformulations and alternatives. This includes work on eco-labelling and updating of product standards and assistance to SMEs to analyze their impacts and toxicity of building products and develop more sustainable business models.
In collaboration with this team from UNEP, UNEP FI (Finance Initiative), a global network of financial institutions that works to embed sustainability into institution practices and sector norms, has been tasked with developing guidance on green mortgage product development for Sri Lanka. This is complementary to the UNEP work on chemicals of concern in that reducing harmful materials that impact construction supplier and building occupant health and wellbeing and ecosystems are a key feature of green building strategies and should be incorporated into approaches to green finance of buildings.
This guide was developed as a resource to inform industry actors on possible approaches to green finance product development. The information can be used by Sri Lankan banks and other building and property stakeholders for capacity building on green finance within institutions and across the sector. It includes sections on
- green building design principles and technologies;
- the state of green construction practices and beliefs in Sri Lanka;
- a review of barriers and benefits of green buildings, and international evidence of financial value from green buildings;
- information needs in Sri Lanka to prepare preliminary green finance models;
- strategies for integrating green finance practices through underwriting, valuation, and regulatory and risk channels; and
- recommendations for new green building product development.