Berlin

ELIGIBLE COMMERCIAL &RESIDENTIAL BUILDINGSGERMANY
Low Carbon Buildings Criteria
under the Climate Bonds Standard

What are the Low Carbon
Buildings Criteria?
They are the technicalstandards that buildings(or a portfolio of buildings)
must satisfy to be eligible as nominated use ofproceeds in a Certified Climate Bond. Any bondbeing certified must also meet the reporting andtransparency requirements of the overarching
Climate Bonds Standard.

• It has or will undergo an upgrade or retrofit
which reduces its emissions intensity by 3050% (depending on the tenor of the bond).

What do the low carbon emissions
trajectories or proxy represent?

This brochure outlines the Buildings Criteria forall buildings in Germany. For full details on themethodology and requirements, see the detailed
Criteria document.

They represent rapid decarbonisation trajectoriesaligned with the goals of the Paris Agreement tolimit global warming to no more than 2 degrees
above pre-industrial levels, and ideally no morethan 1.5 degrees. Trajectories are expressed as anemission intensity metric: kg CO2 e/m2 while proxies
are expressed using a range of building codes
and rating scheme including build year or post
occupancy performance rating and standards.

When is a German building eligible
for certification?

How have trajectories and proxies
been established?

It is eligible for certification if it meets thefollowing Climate Bonds requirements:

Trajectories have been established by taking theemissions intensity of the top 15% of buildingsin that city and drawing a linear pathway down
to zero carbon in 2050. They are location• It meets the low carbon emissions trajectory
OR approved proxyGerman Residential Proxy

specific to reflect a number of factors whichvary significantly by region. Proxies use differing
techniques to measure the correlation between
an established code ot rating scheme and it
ability to produce emissions reductions in-linewith the Criteria & rapid decarbonisation.

Where can issuers go to find more
information to check compliance?
The trajectory & proxy(s) for Germany areillustrated in the boxs below. More information
about compliance for Germany can be found on
the Low Carbon Building’s page.

Want more information?
Contact standards@climatebonds.net
regarding the Low Carbon Building CriteriaFigure 1 . Low carbon residential proxy requirements for Germany

Residential buildings are eligible forcertification if the asset meets theapproved market proxy
The proxy diagram (Figure 1) shows theestablished low carbon buildings criteria
for residential buildings in Germany. Anybuilding is eligible if it meets this preapproved market proxy.

EPC
“A”

OREPC
“B”

The assets included in the issuance mustachieve an EPC rating of “B” or above. This isvalid for 6 years.
This proxy was established using data fromthe Energieausweis datebase provided byGermany Energy Agency.

Note: Residential buildings must demonstrate compliance with the German EPC rating system,
Energieausweis (EPC), achieving a rating of “A” OR “B”.​​Low Carbon Building Criteria: Germany Climate Bonds Initiative1

Commercial buildings are eligible
for certification if the asset‘semissions intensity lies below theestablished trajectory
The trajectory chart (Figure 1) shows theestablished low carbon buildings trajectoryfor commercial buildings in Berlin. Anycommercial building is eligible if it meets theemissions intensity target for the mid-pointof their bond.
For example, for a 10-year bond issued in 2018,
the emissions intensity at the time of issuancefor a building in Berlin must be at or below
56.23kg/ CO2e.

Figure 2. Low carbon trajectory for Berlin
66.64
56.23
Emissions Intensity (kg CO2 e/ m2)

German Commercial Trajectory

10 yr
45.81

20 yr
35.40

2018

2023

2028

2033

30 yr

2050

Note: Examples have been included for three different bond tenors, 10 yr, 20 yr, and 30 yr showing
how the desired tenor of the issuer affects the emissions intensity target of the bond.

How is an emissions
performance trajectory
established?
Steps for developing a trajectory
Each trajectory uses the same approach,making global reporting more harmonised,allowing issuers and investors to compare
across markets. The following steps highlightthe fundamentals.
Trajectories are established for specificbuilding types (offices, hotels, shoppingcenters) on a city/region or country basis
where data is available.

Trajectories are used to derive emissions
performance targets that bond issuers mustachieve to gain Climate Bond Certification.

15%
CO2CO20 CO2
The start of the trajectory is the top
15% most emission efficient buildings
in a city given as the carbon intensity
metric kg CO2/m2.

Trajectories are linear and aim for zero
emissions in 2050. This means emissions
performance targets for bond issuers
become more demanding over time.

Low Carbon Building Criteria: Germany Climate Bonds Initiative

The Climate Bonds CO2 Target Calculator
automatically calculates the emissions
performance targets for an issuer basedon city, building type, bond issuance year
and bond term.

2German Commerical Proxy

Figure 1 . Low carbon commercial proxy requirements for Germany

Commercial buildings are eligible forcertification if the asset meets theapproved market proxy
The proxy diagram (Figure 1) shows theestablished low carbon buildings trajectoryfor commercial buildings in Germany. Anybuilding is eligible if it meets the this preapproved market proxy.
For example, for a 10-year bond issued in2018, the assets included in the issuancemust be a part of an existing MBS pool
undergoing refinancing, be built after 2008,
and hold an EPC rating.
This proxy was established using data fromthe German building code and German
Energy Agency.

BuiltAfter2008

HasEPC
RatingExisting
Refinance
Pool

Note: Commercial buildings must demonstrate compliance with all three of the above criteria toqualify for certification under the proxy route, otherwise, issuers must demonstrate compliance withthe German low-carbon trajectory (above).

How is a market proxyestablished?
Steps for developing a proxy
Each proxy uses a similar approach, making
global reporting more harmonised, allowing
issuers and investors to compare across markets.
The following steps highlight the fundamentals.
Proxies are established for specific building
types (offices, hotels, shopping centers) ona city basis where data is available.

Country15%

Proxies are representative of the top 15%
most emission efficient buildings in aparticular market.

Proxies are used to derive currently best
available building code or rating schemethat bond issuers must achieve to gain
Climate Bond Certification.

Proxies are placeholders until more data
becomes available. This means proxies
expire or are reassessed on an ongoing basis.

ProxyPDF

An issuer can find a list of available
proxies for residential here andcommercial here.

Disclaimer: The information contained in this communication does not constitute investment advice in any form and the Climate Bonds Initiative is not an investment adviser. Any reference to a nancial organisation
or investment product is for information purposes only. Links to external websites are for information purposes only. The Climate Bonds Initiative accepts no responsibility for content on external websites. The Climate
Bonds Initiative is not endorsing, recommending or advising on the merits or otherwise of any investment or investment product and no information within this communication should be taken as such, nor should any
information in this communication be relied upon in making any investment decision. A decision to invest in anything is solely yours. The Climate Bonds Initiative accepts no liability of any kind, for any investment anindividual or organisation makes, nor for any investment made by third parties on behalf of an individual or organisation, based in whole or in part on any information contained within this, or any other Climate Bonds
Initiative public communication. © Climate Bonds Initiative June 2018.

Low Carbon Building Criteria: Germany Climate Bonds Initiative3