Buildings Criteria
The Buildings Eligibility Criteria of
the Climate Bonds Standard &Certification Scheme
Published for Issuance

NOTE:

These Criteria can be used to certify Use-of-Proceeds Instruments and Assets, and also in somecircumstances, Sustainability-Linked Debt Instruments and Entities per the Climate Bonds
Standard v4.0

Revision

Date

Summary of Changes

Rev. 2.1

07 December 2023

Final for Issuance

Rev. 2.0

September 2023

Draft for public review. Updates to New Buildings to include
embodied carbon, GHG assessment rules and alignment with the EU
Taxonomy and alignment with 1.5-degree pathway

Rev. 1.1

13 April 2023

Revisions to enable Entity Certification and SLD Certification in linewith release of CBS v4.0

Rev. 1.0

July 2022

Final for IssuanceClimate Bonds Initiative - Buildings Criteria Document
Published for IssuanceAcknowledgements
Climate Bonds gratefully acknowledges the Technical and Industry Working Group members who
provided their time and expertise during the development of these Criteria. Members are listed inAppendix B: TWG and IWG members at the end of this document.
Special thanks are given to Ché Wall of Flux Consultants the lead specialist co-ordinating thedevelopment of the Criteria through the Technical Working Group.

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Definitions
Applicant: The term or name for any potential bond issuer, or non-financial corporate entity that might seek certification under the
Buildings Criteria.
Capital Expenditure (CAPEX): Funds used by a company to acquire, upgrade, and maintain physical assets such as property, plants,buildings, technology, or equipment.
Certified Entity: The entity or part thereof which is being certified under the Climate Bonds Standard. Currently, Entity Certification
is limited to non-financial Entities or segregated segments thereof, for which the Climate Bonds Initiative has Climate Bonds
Standard Sector Criteria for Entity Certification.
Climate Bonds Initiative (Climate Bonds): An investor focused not-for-profit organisation, promoting large-scale investments thatwill deliver a global low carbon and climate resilient economy. Climate Bonds seeks to develop mechanisms to better align theinterests of investors, industry and government to catalyse investments at a speed and scale sufficient to avoid dangerous
climate change.
Climate Bonds Standard (CBS): A screening tool for investors and governments that allows them to identify green bonds theproceeds of which are being used to deliver climate change solutions. This may be through climate mitigation impact and/or
climate adaptation or resilience. The CBS is made up of two parts: the parent Climate Bonds Standard and a suite of sector
specific eligibility Criteria. The parent standard covers the certification process and pre- and post-issuance requirements for
all certified bonds, regardless of the nature of the capital projects. The Sector Criteria detail specific requirements for assets
identified as falling under that specific sector. The latest version of the CBS is published on the Climate Bonds website.
Climate Bonds Standard Board (CBSB): A board of independent members that collectively represents $34 trillion of assets undermanagement. The CBSB is responsible for approving (i) Revisions to the CBS, including the adoption of additional sector
Criteria, (ii) Approved verifiers, and (iii) Applications for Certification of a bond under the CBS. The CBSB is constituted,
appointed, and supported in line with the governance arrangements and processes as published on the Climate Bonds website.
Climate Bond Certification: allows the applicant to use the Climate Bond Certification Mark in relation to that bond. Climate Bond
Certification is provided once the independent CBSB is satisfied the bond conforms with the CBS.
Commercial building: A building that is intended to generate a profit, either from capital gain or rental income. There are subcategories of Commercial Buildings, including offices, shopping centres and hotels.
Critical interdependencies: The asset or activity’s boundaries and interdependencies with surrounding infrastructure systems.
Interdependencies are specific to local context but are often connected to wider systems through complex relationships that
depend on factors ‘outside the asset fence’ that could cause cascading failures or contribute to collateral system benefits.
Energy Efficiency: A term used to describe reduction in energy required to provide products and services
Emissions Factor: A term used to describe GHG emissions intensity of the energy consumed in a building. For electricity, locationbased factors must be used. Where available, users (customer) mix Emissions Factors must be used. Market methods andpurchase of off-site green power are not considered.
Emission Performance: A term used to describe emissions intensity and associated emissions reductions of a building. This isexpressed in terms of kg of CO2e per square meter determined from total emissions divided by net lettable floor area.
Emissions Intensity: A quantitative figure expressed as kgCOe/ m2, or kgCO2e/sq2.
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Emissions Performance Target: A quantitative emissions intensity figure falling on or below the emissions performance trajectoryand is expressed as kgCO2e/m2 or kgCO2e/sq2
General Corporate Purpose Bond: a bond the proceeds of which are not ringfenced for specific assets or activities, but which financegeneral OPEX and CAPEX of a company without disclosing the exact uses. SLBs are examples of general corporate purpose
bonds.
Green Bond: A green bond is a bond of which the proceeds are allocated to environmental projects or expenditures. The term
generally refers to bonds that have been marketed as green. In theory, green bonds proceeds could be used for a wide varietyof environmental projects or expenditures, but in practice they have mostly been earmarked for climate change projects.
Industry Working Group (IWG): A group of key organisations that are potential applicants, verifiers and investors convened by
Climate Bonds. The IWG provides feedback on the draft sector Criteria developed by the TWG before they are released for
public consultation.
Investment Period: The interval between the bond’s issuance and its maturity date. Otherwise known as the bond term or tenor.
Operating Expenditure (OPEX): Expense a business incurs through its normal business operations. Often abbreviated as OPEX,
operating expenses include rent, equipment, inventory costs, etc.
Residential building: A building that is used or suitable for use as a dwelling.
Sustainability-Linked Debt (SLD): Any debt instrument for which the financial and structural characteristics can vary depending onwhether the issuer achieves predefined Sustainability/ ESG objectives. Such objectives are measured through predefined KPIs
and assessed against predefined performance targets. Proceeds of SLD are intended to be used for general purposes.
Technical Working Group (TWG): A group of key experts from academia, international agencies, industry and NGOs convened by
Climate Bonds. The TWG develops the Sector Criteria - detailed technical criteria for the eligibility of projects and assets aswell as guidance on the tracking of eligibility status during the term of the bond. Their draft recommendations are refined
through engagement with finance industry experts in convened Industry Working Groups (see below) and through public
consultation. Final approval of Sector Criteria is given by the CBSB.
Use-of-Proceed (UoP) Bond: a bond the proceeds of which are ringfenced for specific assets and activities. Green bonds, blue bonds,
and transition bonds are examples of UoP bonds.
Whole Life Carbon Assessment (WLCA): an assessment of the sum total of all building-related emissions over a building's entire life.

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Table of Contents
Definitions

3

1

7

2

3

Introduction
1.1

The Climate Bonds Standard

7

1.2

Environmental scope of the Buildings Criteria

7

1.3

What can be certified under the Buildings Criteria

7

1.4

Documents supporting these Criteria

7

1.5

Revisions to these Criteria

8

Scope of the Buildings Criteria

8

2.1

In scope8

2.2

Alignment with other Sector Criteria

10

Eligibility Criteria for buildings and built environment projects
3.1

Mitigation Component

11

3.2

Pathway 1: Absolute Performance Threshold

12

3.2.1

Condition 1(a)

12

3.2.2

Condition 1(b)

16

3.2.3

Condition 2

19

3.3
3.3.1

4

11

Pathway 2: Relative Performance Improvement
Condition 3

20
20

3.4

Additional requirements for new buildings

22

3.5

Cross-cutting sector: Steel and Cement

24

3.5.1

Steel

24

3.5.2

Cement25

Certification of Entities and Sustainability-Linked Debt (SLD)

26

4.1

Certification of Entities

26

4.2

Certification of Sustainability Linked Debt (SLD)

27

Appendix A: Whole life cycle assessment scope in Buildings

28

Appendix B: TWG and IWG members

31

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List of Figures
Figure 1: Certification pathways

11

List of Tables
Table 1: Eligible Certifications under the Buildings Criteria
Table 2: What is eligible for Certification under each certification type
Table 3: Alignment with other Climate Bonds Standard Sector Criteria

9
10
10

List of Boxes
Box 1: Emissions Intensity data and calculation methodology
Box 2: Emissions boundary
Box 3: Fixed targets at the midpoint of bond terms
Box 4: Energy efficiency targets for very low carbon electricity distribution networks.
Box 5: Worked example for an eligible asset/portfolio
Box 6: Required Performance Improvement
Box 7: Emissions Intensity Improvement Requirements

Buildings Criteria- Climate Bonds Initiative

13
13
14
15
16
17
21

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1 Introduction
1.1 The Climate Bonds Standard
Investor demand for climate bonds is strong and is expected to increase in line with the delivery of quality products into the market.
However, investor concerns about the credibility of green labelling are also growing. Standards, assurance & Certification will beessential to improve confidence and transparency, which in turn will enable further strong growth in the market.
Today, the Climate Bonds Standard and Certification Scheme is an easy-to-use screening tool that provides a clear signal to investors
and intermediaries on the climate integrity of Certified Climate Bonds. Proposals are currently under consultation to also expand
certification to entities with climate integrity.
A key part of the Standard is a suite of sector-specific eligibility Criteria. Each sector-specific Criteria sets climate change benchmarks
for that sector that are used to screen debt instruments, assets and/ or entities, so that only those that have climate integrity, either
through their contribution to climate mitigation, and/or to adaptation and resilience to climate change, will be certified.
These sector-specific Criteria are determined through a multi-stakeholder engagement process, including TWG and IWG, convened
and managed by Climate Bonds, and are subject to public consultation. Finally, they are reviewed and approved by the Climate
Bonds Standard Board (CBSB).
The second key part of the Climate Bonds Standard (CBS) is the overarching Climate Bonds Standard v4.0. This documents the crosssectoral criteria all certified instruments/ assets/ entities must meet, in addition to meeting the sector specific Criteria.

1.2 Environmental scope of the Buildings Criteria
Currently, the Buildings Criteria address climate change mitigation only.

1.3 What can be certified under the Buildings Criteria
Use-of-Proceeds1 instruments and Assets, and in some circumstances Sustainability-Linked Debt Instruments and Entities can be
Certified using these Criteria. These Certifications are based on the emissions performance of the underlying residential and/orcommercial buildings and/ or the built environment, depending on the focus.

1.4 Documents supporting these Criteria
This Criteria Document provides all the requirements that must be complied with for building related assets and projects to beawarded Climate Bonds Certification. The purpose is to provide instruction to issuers and verifiers about the requirements thatmust be met. The Criteria Documents is supported by a Background document that captures the various dialogues and inputs andsubstantiates the reasoning behind the requirements set in the Building Criteria.
The Criteria are developed through a consultative process with Technical Working Groups (TWGs) and Industry Working Groups(IWGs), and through public consultation. The TWGs comprise academic and research institutions, civil society organizations,multilateral banks and specialist consultancies whereas IWGs are represented by industry experts including potential bond issuers
and investors. A period of public consultation offers the opportunity to any member of the public to comment on the Criteria.
Buildings-specific information to support Applicants and Verifiers is available at Buildings criteria page as follows:

1 Use-of-Proceeds (UoP) is used as shorthand throughout this document for a variety of targeted finance instruments, including green l oans, repos, and asset-backed

securities. Annex 1 of the Climate Bonds Standard v4.0 details the full list of instruments that can be certified.
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•
•
•
•
•
•

Buildings Criteria Brochure.pdf (climatebonds.net) a 2-page summary of the Building Criteria
Background Paper the rationale behind the Building Criteria
FAQs (FAQ’s)
Methodology for Establishing Low Carbon Trajectories: a guidance document for developing thresholds in new markets.
Methodology for Establishing Proxies: a guidance documents for developing proxies in new markets.
Methodology for Calculating Emissions Retrofits: a guidance documents for determining the emissions upgrade
requirement.

In addition, the following cross cutting information to support Applicants and Verifiers is available as follows:••

The Climate Bonds Standard v4.0: contains the requirements of the overarching CBS
The Climate Bonds Standard v4.0 Entity and Sustainability-Linked Debt Checklist documents: provides further informationon the cross-sectoral requirements for Entity and Sustainability-Linked Debt Certification respectively.

For more information on Climate Bonds and the Climate Bonds Standard and Certification Scheme, see www.climatebonds.net.

1.5 Revisions to these Criteria
These Criteria will be reviewed on a regular basis, at which point the TWG will take stock of the deals that are printed in the earlystages and any developments in improved methodologies and data that can increase the climate integrity of future deals. As aresult, the Criteria are likely to be refined over time, as more information becomes available. Certification will not be withdrawn
retroactively from bonds certified under earlier versions of the Criteria.

2 Scope of the Buildings Criteria
2.1 In scope
All eligibility assessments for Certification are based on the emissions performance of the underlying building(s) and/ or of the built
environment project depending on the focus of the Applicant. Table 1 indicates which types of Certification are available for which
focus areas. The associated Criteria are discussed in Section 3. Additional overarching guidance on Sustainability-Linked Debt andEntity Certification is given in Section 4.
Subject to meeting those Criteria, Table 2 illustrates what is eligible for Certification under each Certification type.
See also the Climate Bonds Standard v4.0 for any cross sectoral requirements for Use-of-Proceeds, Sustainability-Linked Debt, Assetor Entity Certification. These cross sectoral requirements must be met in addition to the buildings-specific requirements describedin this document.
It is the Applicant’s responsibility to provide the information to prove compliance with each component of these Criteria. Verifiersmust include this information in the scope of verification.
For Use-of-Proceeds and Asset Certification, where the certification portfolio includes several separately identifiable projects,
expenditures, or groups of assets, these criteria must be met for each separately identified project or asset grouping. Applicantsshould determine these project boundaries, which may be based on geographical and/or supply chain linkages.

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Climate Bonds Initiative - Buildings Criteria Document
Published for IssuanceTo guide the interpretation of Table 1:
A green circle indicates these assets, when fully described and documented, automatically meet theCriteria requirements, with no further disclosure or documentation required.
An orange square indicates that the eligibility of these assets is conditional on meeting specificrequirements. These requirements are described in more detail in Section 3.
A red triangle indicates that these assets are not eligible for certification, either because they are
incompatible with a low carbon or climate-resilient economy or because determining their eligibility isoutside the mandate of the Building Criteria. The justifications for exclusions are presented in the
Background document.
n/aIndicates that Certification Criteria are not available at this time

Table 1: Eligible Certifications under the Buildings Criteria

Buildings sub-sector

Mitigation
Criteria

Mitigation
Criteria(UoP and Asset
Cert.)(Entity and SLD
Cert.)

Adaptation &Resilience

Residential Buildings
A building or portfolio of buildings where more than half ofthe floor area is used or suitable for use for dwelling
purposes, including but not limited to the follow subcategories of residential buildings:
•
•
•

n/a

Single family
Multi-family
Rentals

Commercial Buildings
A building or portfolio of buildings where more than half ofthe floor area is used for commercial purposes and areintended to generate a profit, either from capital gain or
rental income. There are sub-categories of Commercial
Buildings, including but not limited to:
•
•
•
•

n/a

Offices
Schools & Campuses
Shopping centres & retail
HotelsIndustrial Buildings
A building or facility dedicated to the manufacturing,altering, repairing, cleaning, washing, breaking-up, adapting
or processing any article
•
•
•

n/a

n/a

n/a

Manufacturing facility
Agriculture/livestock facilities
Energy generation facilities

Built environment
Projects or activities that are not specifically buildings
related, but are part of the wider built environment, such as
street lighting upgrade projects refer to projects that achieveenergy performance improvements through the applicationof energy efficiency measures and components that relate to
the built environment

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Table 2: What is eligible for Certification under each certification type
Certification based on
eligible built environment
project

Certification based on
eligible building

Certification typeUse-of-Proceeds
Certification

•
•
•
•

Origination or refinancing of loans or mortgages,
including portfolios
Capital costs of performance upgrades
Operating expense of ongoing maintenance
Building cost or value

Asset Certification•

Building asset(s)n/aEntity Certification•

The building management entity / the buildings
management business segment.

n/aSustainability-Linked
Debt Certification

Note, construction entities/ business segments are notcurrently eligible for Certification.
• Sustainability-Linked Debt instruments whose
climate mitigation performance targets represent
the eligible building management activity••

Capital costs of performance
upgradesOperating expense ofongoing maintenance

n/a

2.2 Alignment with other Sector Criteria
Table 3: Alignment with other Climate Bonds Standard Sector Criteria
Potential Use-of-Proceeds

Sector Criteria

Energy infrastructure buildings

Building supporting the generation, distribution, and/or transmission of electricity
and heat are subject to the corresponding Energy Criteria

Transport infrastructurebuildings

Buildings supporting the manufacturing of low carbon transport modalities orinfrastructure (i.e. bus stations, rail stations) are subject to the corresponding Low
Carbon Transport Criteria.

Water infrastructure buildings

Buildings supporting the processing and distribution of water or otherwise
support water-based infrastructure are subject to the corresponding Water
Criteria.

ICT infrastructure buildings

Buildings supporting the ICT are subject to the corresponding ICT Criteria.

Waste Management
infrastructure buildings

Buildings supporting the collection, handling, or processing of municipal solid
waste are subject to the corresponding Waste Management Criteria.

Land Use infrastructurebuildings

Buildings supporting the management of agriculture, forestry, ecosystemconservation & restoration, fisheries, or associated supply chains are subject tothe corresponding Agriculture, Forestry, Fisheries, and Land Use Criteria

Industry infrastructurebuildings

Building supporting the manufacturing, production, or processing ofproducts/goods are subject to Industrial Criteria (under development)

Steel

Buildings, commercial and/or residential, that are not solely dedicated to a steel
production facility. For example, office buildings for staff

CementBuildings, commercial and/or residential, that are not solely dedicated to a
cement production facility. For example, office buildings for staff.

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3 Eligibility Criteria for buildings and built environment projects
3.1 Mitigation Component
There are two routes to eligibility for Certification of Use-of-Proceeds instruments, Assets, Sustainability Linked Debt instruments
and Entities relating to buildings and/ or the built environment;1.
2.

Absolute Performance Improvement Pathway (Section 3.2), OR
Relative Performance Improvement Pathway (Section 3.3)

The decision tree below illustrates these eligibility pathways. Pathway 1 can be used for Certifications relating to buildings/ buildings
portfolios. Pathway 2 can be used for Certifications relating to buildings/ building portfolios and also those relating to built
environment projects.
All new construction must be designed fully electric (viz. without reliance on any form of fossil fuels) and with infrastructure forsupporting electric mobility (charging facilities). In addition to this New Buildings are subject to reporting on Whole Life Carbon
Assessment (WLCA)2 (or Life Cycle Assessment (LCA)) where no operational pathway is in place. This WLCA must be undertaken
meeting the Greenhouse Gas (GHG) protocol accounting recommendations (including Scope 3 emissions). All disclosures bepresented alongside a statement of data quality underpinning the assessments. Detailed information on this is provided in
section 3.4.
Section 3 provides all relevant information relating to Use-of-Proceeds financial instruments and Asset Certification. The Entity(company level) certification and eligibility for Sustainability Linked Debt instruments are covered in Section 4.

Figure 1: Certification pathways

2 3 Reporting on Life Cycle Assessment and accounting for GHG Scope 3 emissions is introduced now to make the market aware and be prepared for what should bedelivered. There will be a transition/grace period for the same and reporting and accounting along with a data quality statement will start on or after 1 st January
2025.
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3.2 Pathway 1: Absolute Performance Threshold
Applicants have two options to establish compliance with the absolute performance threshold:••Condition 1 - Quantitative Threshold: Emissions intensity of the building achieves the appropriate performance target forbuildings in that location,
Condition 2 - Qualitative Proxy: Rating of the building achieves the Climate Bonds approved proxy

The key strength of the Criteria is how emission intensity performance requirements are calibrated to local market conditions,taking into account differences in climate zones, prevailing market practices and inherent greenhouse intensities of the fuel supply.
To prevent the Criteria from being undermined by layers of approximations and adjustments, each city is explicitly benchmarked,
and the emission intensity threshold set against a common percentile.
To ensure that Climate Bonds Certification achieves significant scale and environmental impact, the emissions intensity is set against
the top 15 per cent of buildings in a city. This serves as an initial baseline that is used to create a linear trajectory to zero carbon
emissions by 2050, producing performance targets that become more stringent year-on-year. Emissions performance thresholds
and trajectories will be set for specific building types (e.g. offices, hotels, shopping centres) in a city due to the meaningful variations
in energy consumption and therefore emissions of different building types. This approach is referred to as Condition 1.
Condition 1, while inherently simplistic, still remains out of reach for some cities and for some building types where the data simply
does not exist in any reliable form. In such markets, existing instruments such as building standards, codes, and rating schemes canbe leveraged as proxies for buildings in that market. This alternative approach is referred to as Condition 2.
In markets where both options are available, Condition 1 is the preferred approach. As Condition 2 is meant to serve as an interim
solution until data becomes available.

3.2.1 Condition 1(a)Condition 1(a): Meets performance target sets by low carbon trajectory for asset in that location.
Requirement: Mitigation Component
Component
Mitigation

Requirement
The asset or
portfolio of assets
shall meet theemissionsperformance target
calibrated to thespecific city or
region.

Demonstration of compliance
For portfolios
The issuer certifying a portfolio ofassets shall:

For individual buildings
The issuer certifying an individual
asset shall:

•
•

•
•

•

report the bond term;
report the emissions intensity
target for the bond establishedby the low carbon trajectoryand bond term;
report the emissions intensityof the portfolio of assets.

•

report the bond term;
report the emissions intensity
target for the bond establishedby the low carbon trajectory andbond term;
report the emissions intensity ofthe portfolio assets.

Certifiable

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Explanation
The “Emissions Performance Target” an issuer has to satisfy is determined based on an “emissions performance trajectory” thatstarts with an “initial baseline emissions performance” of the top 15% of buildings in a city and declines to zero GHG emissions in
2050.
The emissions performance target is the emissions intensity figure at which the mid-point of the bond intersects the emissions
performance trajectory and reported as kgCO2e/m2. The emissions performance trajectory is location and building sector specific.
The “emissions performance target” is expressed on an annual basis in kgCO2e terms and represents a level of carbon intensity(with net lettable square meters as the denominator for most building types). For instance, the emissions performance target for
Sydney offices may be 78.2 kgCO2e/m2 per annum for a 10-year bond issued in 2015.
The “initial baseline emissions performance” is established using available emissions performance data (see notes in Box 1 below)
on a representative sample of buildings in a city or region. Once set, it is not expected to be updated unless in exceptional
circumstances. The two key circumstances that warrant a recalibration of initial baseline emissions performance are (1) when thesize and quality of the underlying data set improves significantly and (2) when there is significant decarbonisation of the grid. Climate
Bonds will undertake a review every 3 years, to check for these two circumstances and whether they warrant a recalibration of
initial baseline performance. The Trajectory Methodology document on the buildings website provides details on the statisticalmethodology applied to establish the “initial baseline emissions performance”.
Box 1: Emissions Intensity data and calculation methodology
Notes on emissions intensity data and calculation methodology
1. Emissions performance of individual buildings should be specified using an appropriate denominator (kgCO2e/m2).
While Climate Bonds has established that net lettable floor area is appropriate for most building types including
offices, alternative denominators more appropriate for specific building types (e.g. rooms for hotel buildings) may be
applied. Climate Bonds will provide guidance on alternative denominators as research is developed for specificbuilding types.
2.

Emissions performance data must relate to the operational performance of buildings rather than modelled
performance.
Emissions performance data must relate to the same emissions boundary as the target. Climate Bonds commonly uses
landlord emissions boundaries to align with the boundaries of ownership and control that exist in the building sector.
Box 2 provides guidance on the Emission boundaries. If data is only available that does not align to the emissions
boundaries of the emissions performance target, a reasonable assumption may be made to adjust for boundary
differences.

Box 2: Emissions boundary
Guidance on Emission boundaries
Emissions performance targets and performance requirements are commonly provided for a landlord’s emissions
boundary.
Landlord energy loads (also known as base building energy loads) typically comprise the energy consumed by landlordowned plant and equipment that are required to service the building and are not controlled by the building’s tenants.
Such energy end uses include:
•
•
•
•
•

Heating, ventilation and air conditioning
Lifts and escalators
Car park lights and ventilation
Common area light and power
Exterior lighting and signage

Landlord loads excludes energy end uses that are controlled by the building’s tenants, such as:••••

Lighting within tenant areas
Tenant power
Tenant supplementary cooling
Tenant data facilities

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In markets that commonly disclosure whole building emission boundaries, alternative emissions targets may be published.
Where whole building targets are used, all emissions associated with the energy used in the operation of the building andthe tenants use of the building must be included.
Exception cases:
The approach to emissions boundary differs for certain commercial buildings, as opposed to that of office buildings. These
include:•••HotelsSupermarkets
Universities buildings

In these cases, Climate Bonds captures the energy related emissions of the operations attributed to the commercial
buildings listed above. This is done so as these commercial buildings are traditionally delivered as core shell buildings,
meaning they are provided without HVAC, lighting and plumbing services, as these are all to be provided by the building(typology) tenant according to their needs. Given this, the landlords portion of load becomes irrelevant, and thehotels/supermarkets/university building’s portion of energy captures all material loads, including air conditioning,
ventilation, lighting, cold rooms, refrigerators display cabinets, etc. This is to ensure it is still consistent with the generalapproach of the emissions associated with the equipment owned and operated by the party/asset being financed.

To avoid the risk and uncertainty associated with year-on-year moving performance targets (implied by a declining emissions
performance trajectory), fixed targets are established at the midpoint of the bond’s term along the trajectory (see Box 3 for example
using Sydney offices). Adopting this approach means that performance targets become more stringent the later the bond is issued
and the longer the bond term.
Box 3: Fixed targets at the midpoint of bond terms
Establishing fixed targets at the midpoint of bond terms - Sydney offices example

Carbon emissions(kgCO2e/m2)

100

91.26

Emissions performance
trajectory

78.2

80

65.19

Target for 10-year bond
52.15

60
40
20

0

0
2015

2020

2025

2030

2035

2040

2045

2050

Chart 1: Targets for different bond terms for Sydney offices
The emissions performance trajectory for Sydney offices starts with an initial baseline emissions performance of
91.2 kgCO2e/m2 and declines to zero carbon emissions in 2050 (blue line in Chart 1).
Fixed targets are derived from this emissions performance trajectory using the midpoint of the bond term (white circularmarkers along the blue line). For instance, the midpoint for a 10-year bond issued in 2015 is 2020. The target for such abond is 78.2 kgCO2e/m2, where the midpoint of the bond’s term (2020) meets the emissions performance trajectory. The
targets for longer bond terms such as 20 years and 30 years are established in a similar manner using the midpoints,
leading to targets of 65.2 kgCO2e/m2 and 52.2 kgCO2e/m2 respectively.
It can be observed from the chart that the longer the bond term, the stricter the target to achieve certification. This isalso the case the later bonds are issued (e.g. year 2020 or 2030 instead of 2015).
Climate Bonds has developed and made available on its website an easy-to-use CO2 Target Calculator that enables issuers toascertain the performance targets that must be satisfied in order to gain certification in their cities. The Calculator automatically

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Published for Issuancecalculates the performance target an issuer has to satisfy based on the year the bond issued, the length of the bond term, thebuilding type and city the building is located.
Buildings in location with very low carbon electricity distribution networks are assessed with an energy intensity target. The use ofan energy intensity target insulates reporting from the relatively large changes in emissions intensity that can be caused by modestchanges to the consumer mix Emissions Factor of the electricity supply. Very low carbon electricity distribution is benchmarked as
the local distribution network having a consumer mix emissions factor of less than 0.1 kgCO2e/kWh. (See Box 4 for detailed
explanation).
Application for a portfolio of buildings
An issuer seeking certification will most likely have a portfolio of buildings covering different building types in different cities. The
performance target that the issuer on a portfolio basis will have to satisfy is a weighted average of the different targets of building
types and cities in the pool.
This weighted average will be calculated based on net lettable area, which Climate Bonds has established as the most appropriate
denominator for most building types including offices. Where a different denominator is applied, the weighted average will becalculated based on that alternate denomination. This approach of aggregating buildings in a bond portfolio is known as the Full
Aggregation Method.
Box 4: Energy efficiency targets for very low carbon electricity distribution networks.
Establishing Energy efficiency targets in locations with very low emissions factor
Where location-based consumer emissions factor for electricity use are significantly lower than fossil fuel use, Climate
Bonds applies an energy intensity target. The threshold for using an energy intensity target is when the consumer (alsoknown as the supplier) mix of the network electricity is equal to or lower than 0.1 kgCO2/kWh in the previous three
years.
The energy intensity target is different from the emissions performance trajectory. No trajectory is applied, and theenergy intensity target is set at an absolute threshold regardless of the tenure of the bond.
The target is established is calibrated from the Climate Bonds emissions benchmark in a very low carbon location, for abuilding that is 100% powered by electricity. The electricity target is measured in kilowatt hours of delivered or
consumed energy per square meter of net lettable area. Climate Bonds will review the energy intensity targets
periodically to ensure they remain appropriately calibrated.
Example:The emissions factors for consumers of electricity supplied by the distribution network in France is
0.047 kgCO2/kWh (AIB 2021 residual mix results). Climate Bonds energy intensity target for offices in France1 are:••••Paris: 89.79 kWh/m2
Marseille: 82.8 kWh/m2
Lyon: 92.4 kWh/m2
Toulouse: 86.8 kWh/m2
1

This varies in response to climatic variations

Methodology for determining the Energy efficiency targets:
The methodology for the energy targets is a simple at the emission baseline (set at 15% of market) converted toelectricity on the basis on no fossil fuel use. Using the same Paris:
1. Emissions baseline: 4.22 kg/m2.annum
2. Emissions Factor for Electricity: 0.047 kg.CO2/kWh (Baseline year AIB 2018 Residual Mix Results)
Energy target = [1] / [2] = 4.22/0.047 = 89.79 kWh/m2 per annum

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Published for IssuanceBox 5: Worked example for an eligible asset/portfolio
Worked example for an eligible asset/portfolio
Overview of the project:
A new office building comprising 35 levels, offering 60,000m2 of premium grade offices accommodating approximately
7,000 people is built in Brisbane, Australia.
The office building includes:• Zero carbon in operation• Powered by 100% renewable electricity (no use of fossil fuel and fully electrified)• Reporting and accounting for WLCA (Scope 1, 2 and 3)• Scope 1 and 2 already in net positive pathway• Scope 3 net positive emissions by 2030.
• Zero waste landfill by 2030
• The on-site parking is made EV infrastructure ready.
The office building has received a 6-star Green Star Buildings certification - the highest standard and rating in available in
the Green Star Buildings.
Certification eligibility under Climate Bonds Low-carbon buildings criteria
The asset has taken the Condition 2 (Achieves a Climate Bonds approved proxy) under pathway 1 (absolute performancethreshold) as per Section 3 of this document. The asset has satisfied the criteria according to the new additional criteria
for New Buildings as detailed out in section 4.3 of this document.

3.2.2 Condition 1(b)Condition 1(b): Will achieve equivalent performance over the bond term
Requirement: Mitigation Component
Component
Mitigation

Requirement
Condition 1(b) requiresthat buildings achieve acertain level of emission
intensity reductions overthe life of the bond to beeligible for certification.
It allows for bindfinancing of building
retrofits where planned
reductions in emissions
intensity may take placeover time.

Demonstration of compliance
For portfolios
The issuer certifying a portfolio ofassets shall:

For individual buildings
The issuer certifying an individual
asset shall:••

have a contract or agreementwith a certified energy
auditor demonstrating theassets emissions intensity
shall be improved over theterm of the bond such that its
end performance isequivalent to theperformance requirements
under Condition 1(a).

have a contract oragreement with a certified
energy auditor
demonstrating the assets
emissions intensity shall be
improved over the term of
the bond such that its end
performance is equivalent to
the performancerequirements under
Condition 1(a).

Certifiable

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Explanation
The Climate Bonds Initiative is aware not all issuers start from the same set of building assets under management. In orderto account for this and remain applicable to all potential issuers as well as incentivise the decarbonisation of building stock
through deep retrofits, the criteria have been designed to allow for compliance with the performance threshold over theterm of the bond.
An asset or portfolio of assets that do not currently meet the relevant Climate Bond’s low carbon trajectory, may becertified as a Term Conformance Bond as long as its carbon performance over the bond’s term is equivalent to that of anasset or portfolio or assets performing at or below the low carbon trajectory.
There are two options for which an asset or portfolio or assets may be classified as a Term Conformance Bond:1.
2.

Gradual improvement over the bond’s term - measured against Climate Bond’s city trajectory (“GradualImprovement - City”) (Box 5)
Front-loaded improvement in initial years and then maintained performance (“Front- loaded improvement”)(Box 4)

These two options are described in detail with the use of examples in the subsequent sections. Both options require annual
monitoring and verification. These are best illustrated using the examples described in Box 5.
Box 6: Required Performance Improvement
Performance improvement required by Condition 1(b)Under Condition 1, an office building for a 10-year bond in Sydney is eligible for certification only if it meets theperformance target of 78.2kgCO2e/m2 at the start of the bond term (year 2015) and maintains this performance over theremaining term (black horizontal line in Chart 2).

Chart 2: Performance improvement for 10-year Sydney bond example
An office building that currently exceeds this performance target of 78.2kgCO2e/m2 can however achieve certification
against Condition 1(b) as long as its performance is improved such that the average performance over the life of the bondis equivalent to 78.2kgCO2e/m2 (blue declining line in Chart 2).
It can be observed in Chart 2 that the improving building achieves an aggregate performance (area under the blue line)that is equivalent to that achieved by a building hitting the target of 78.2kgCO2e/m2 every year (area under the black line)
such that area of triangle A is equivalent to that of triangle B in the chart.
While Chart 2 provides an example of an office building that achieves a constant rate of performance improvement overthe bond term, the issuer does not have to follow this trajectory and has the flexibility to decide the timing of theperformance improvement. As long as the average performance of the improving building is equivalent to theperformance target under Option A of Condition 1, it does not matter when the performance improvement is undertaken.

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Another option to demonstrate term conformance is what is known as front loaded emissions performance improvement.
Instead of gradual improvement (the previous option), our asset portfolio can front-load its carbon improvement in theinitial five years and maintain that carbon intensity over the remaining 15 years (See Chart 3).

Chart 3: Performance improvement for 20-year Sydney bond example
To achieve the same carbon performance (over the bond’s term) as the minimum performance portfolio, our asset
portfolio has to achieve a carbon intensity of 52.6kg CO 2e/ m2 in five years (Year 2020 assuming the bond is issued in Year2015) and maintain that over the remaining term of the bond.
The carbon intensity target of 52.6 kgCO2e/m2 calculated such that the area in area A is equivalent to the area in area B
in Chart 3 (so that the carbon performance of our asset portfolio is equivalent to that of the minimum performance
portfolio over the bond’s term).

Application for a portfolio of buildings
An Applicant seeking certification will most likely have a portfolio of buildings covering different building types in different cities.
The performance target that the issuer on a portfolio basis will have to satisfy is a weighted average of the different targets ofbuilding types and cities in the pool.
This weighted average will be calculated based on area, which Climate Bonds has established as the most appropriate denominator
for most building types including offices. Where a different denominator is applied, the weighted average will be calculated basedon that alternate denomination. This approach of aggregating buildings in a bond portfolio is known as the Full Aggregation Method.
It is applied when emissions performance data for buildings in a city are available to establish emissions performance trajectories.

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3.2.3 Condition 2
Condition 2: Achieves a Climate Bonds approved proxy
Requirement: Mitigation Component
Component

Requirement

Mitigation

The asset must achieve a preapproved Climate Bonds
approved proxy, relevant to
the location of the asset.
See list of approved proxies• Commercial• Residential

Demonstration of compliance
For portfolios
The issuer certifying a portfolio ofassets shall:

For individual buildings
The issuer certifying an individual
asset shall:••

List of all assets in theportfolio and thecorresponding Climate Bonds
approved proxy(s) leveraged

The name of the Climate
Bonds approved proxy used

Certifiable

Explanation
In the absence of emissions performance data, Climate Bonds will establish “proxies” for buildings by leveraging existing instruments
such as building standards, codes, and rating schemes. Examples include Europe’s Energy Performance Certificates, Minimum
Energy Performance Standards, or third-party schemes.
Issuers seeking to apply other instruments will need to perform similar statistical analysis on their proposed proxies to demonstrate
to Climate Bonds the ability of proxies to position buildings in the top 15 per cent and for how long this proxy remains representativeof this threshold. Climate Bonds encourages issuers to propose alternative proxies and have established guidance for issuers wishing
to undertake the statistical work. Climate Bonds will also undertake its own efforts to establish proxies for priority investment
markets. The most up-to-date list of Climate Bonds approved proxies is available on the website.
Limitation on the bond term
As Condition 2 is meant to serve as an interim solution until emissions performance data becomes available, a limit is placed on theterm of bonds certified against this option. The bond term is capped at 10 years.
Application for a portfolio of buildings
An issuer seeking bond certification will most likely have a portfolio of different buildings. To be certified against Condition 2, eachbuilding in the issuer’s portfolio must satisfy the Climate Bonds approved proxy. This is known as the Simple Aggregation Method
whereby each building included in the pool must be compliant in its own right.
Application for a new buildings and existing building completed after January 2020 date
Any new buildings satisfying an Approved Proxy must also meet the net zero requirements and use not fossil fuel for normal
operations, regardless of whether the requirements are noted in the approved proxy.

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3.3 Pathway 2: Relative Performance Improvement
Bond issuers have two options to establish compliance with the relative performance improvement:

3.3.1 Condition 3
Condition 3 - Quantitative Improvement: Achieves a retrofit improvement in emissions intensity against pre-retrofit baseline
Requirement: Mitigation Component
Component

Requirement

Mitigation

The asset must achieve apost retrofit upgrade of
30-50% dependent on theterm of the bond.
It allows for bond financingof building retrofits whereplanned reductions inemissions intensity may
take place over time.

Demonstration of compliance
For portfolios
The issuer certifying a portfolio ofassets shall:

For individual buildings
The issuer certifying an individual
asset shall:

•

•

•
•
•

Have a contract or agreementwith a certified energy auditor
demonstrating the assts
emissions intensity shall be
improved over the term of thebond such that its end
performance is equivalent to theupgrade performancerequirements determined by theterm of the bond
Report pre-retrofit emissions
intensity
Report post-retrofit emission
intensity
Report percent improvement
achieved•••

Have a contract oragreement with a certified
energy auditor
demonstrating the assets
emissions intensity shall be
improved over the term of
the bond such that its end
performance is equivalent tothe upgrade performancerequirements determined by
the term of the bond
Report pre-retrofit emission
intensity
Report post-retrofit
emissions intensity
Report percent improvement
achieved

Certifiable

Explanation
Certifications requires that a contract or agreement already be in place with a contractor to undertake the emissions reduction
works.
Condition 3 allows the certification of projects that seek improvement in emissions intensity through the application of energy
efficiency measures and fuel switching technologies that relate to the built environment (e.g. LED lights, heat pumps, micro
combined heat and power, renewable micro-generation, etc.).
The methodology is agnostic to types of measures and technologies. As long as the measures and technologies to be applied in the
project lead to the required improvement in emissions intensity, the project is eligible for certification.
A minimum improvement in emissions intensity of 50% is required for bond terms of 30 years and 30% for bond terms of 5 years.
Between 5 years and 30 years, the minimum improvement required is derived based on the linear trajectory between 30% for 5
years and 50% for 30 years. For bond terms below 5 years, the minimum improvement is equivalent to that required for 5-yearbonds (30%). These requirements are depicted in Box 7 below.

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Issuers must be able to quantify to Climate Bonds the performance improvement of upgrades or retrofits. [Confirm level of detailrequired in contract or agreement and whether there is a standardised framework that can be leveraged].
Box 7: Emissions Intensity Improvement Requirements

Required performance
improvement

Minimum emissions intensity improvement requirements
The 50% minimum improvement for 30 years has been derived from analysis of data in the Australian cities of Sydney andMelbourne, along with consideration of local rating tools in both Australia and the USA.
In Australia, a carbon emissions reduction of approximately 50% is required to move from a 2-star NABERS rating (below
average performance) to a 4.5-star NABERS rating (very good performance). Similarly, Energy Star (based on wholebuilding data) in the US requires a 51% carbon emissions reduction to move from the bottom 15th percentile to top
quartile and a 53% carbon emissions reduction to move from median performance to top 5th percentile.
The 30% minimum improvement for 5 years has been established based on industry practice for Energy Service/Saving
Companies (ESCO) contracts, where best practice tends towards a 30% performance improvement.
For bond terms between 5 years and 30 years, the minimum improvement required is derived based on the linear
trajectory between 30% for 5 years and 50% for 30 years (depicted in Chart 4 below). Bond terms below 5 years are
expected to deliver a 30% performance improvement and no less.
60%
50%
40%
30%
20%

30%

30%

0

5

38%

34%

42%

46%

50%

10%
0%
10

15

20

25

30

Bond Term (years)

Chart 4: Minimum improvement requirement over life of bond

Note:

Application for a portfolio of projects

An issuer seeking bond certification will most likely have a portfolio of different projects.
Such an issuer with multiple projects can aggregate them into one portfolio and it is the aggregatedportfolio that must satisfy the required minimum improvement in emissions rather than each project
included in the pool having to comply in its own right.

Note:

Application for projects commencing after 2026 date

Any improvement works must also not involve equipment of appliance that use fossil fuels, except to theextent that the improvement works result is such appliance and equipment being decommissioned.

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3.4 Additional requirements for new buildings
All New buildings (commercial and residential) constructed after 2023 are additionally required to deliver the following
requirements which will have three parts:
1.
2.
3.

No fossil fuels are used for heating, hot water, cooking, or on-site electricity generation
The building provides necessary infrastructure to support electric mobility where on-site car parking is provided.
Shift to all electric buildings (electrification)

Additionally, the New Buildings are also required to report on the following:
4.

Reporting on Whole Life Carbon Assessment:

Please refer to section 3.5 for thresholds pertaining to steel and cement.

Table 4: New Buildings Requirements
Condition
No fossil fuels

Requirement
New buildings need to be delivered without inbuilt redundancy of systems and liability for
future investment to operate net-zero emission with fully decarbonised energy supply
infrastructure. Many countries and states have implemented plans to accelerate thedecarbonisation of energy supply infrastructure and continued dependency on fossil fuels
will lock-in and new buildings into increased GHG emissions until such time as fossil fuelconsuming plant and equipment is replaced.
The following end use cannot use fossil fuels:••••

Enabling Electric mobility

Heating, ventilation, and air conditioning
Hot Water
CookingOn-site generation of electricity for non-emergency power

Buildings have an important role to place in the facilitation of the transition to electric
mobility. Providing the necessary infrastructure for electric vehicle charging in buildings is an
important marked enabler, particular in residential buildings.
The following essential infrastructure is the minimum required where car parking is included
within a building:••Residential buildings – full parking (100%)Commercial buildings - a minimum of 25% of the total parking area

EV vehicles include cars, motorcycles, and bicycles.
Whole Life Carbon
Assessment

Reporting and accounting on Whole Life Carbon Assessment (WLCA) will be mademandatory for construction of New Buildings for both commercial and residential buildings.
This reporting will follow the EN 15978 methodology or international equivalence. This willtake place for all new buildings from 01 January 2026. Details of scope and relevant
information can be found in Appendix A.

Commercial Buildings:

As Climate Bonds already has established operational low carbon pathways for theoperational greenhouse gas emissions impact of commercial buildings (around the globe,
covering specific countries/cities in a region). Where Climate Bonds already has operation
targets and reporting requirements of operational energy impacts, the operational phase is
excluded from WLCA to avoid additional cost and limits additional reporting of embodied
carbon to:•••

Buildings Criteria- Climate Bonds Initiative

Module A,
Module C (where the property/asset is demolished for a New Building) andModule D

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Condition

Requirement

Note:

Residential Buildings:

Climate Bonds has recognised various proxies that are focused on emissions for residentialbuildings around the globe, catering to specific countries/cities in a region, Hence, it will
look at:••••Module A,
Module B - B6, 7 and 8 that cover the operational emissions
Module C (where the property/asset is demolished for a New Building) andModule D

Note:

Note:

Modules C + D will be required for European countries only.

Modules C + D will be required for European countries only.

In emergency situations, resulting in extended interruptions to power supply (natural disasters or
any other emergency situations, backup generators can be utilised.
Further information and details can be found in the Emergency Power Backup guideline.

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3.5 Cross-cutting sector: Steel and Cement
3.5.1 SteelThe construction industry is one of the most important steel-using industries, accounting for more than 50% of world steel demand3.
Low carbon steel remains a critical requirement to ensure building’s embodied carbon objectives are met. The WLCA reporting
requirements (effective from 01 January 2026), require that Low Carbon steel meets the thresholds set out below.
The emissions intensity values must be reported, by using the weighted average of primary and secondary intensity steel at date of
the bond inception (available from suppliers) and will need to at no time be above 2.0 kg/t steel and reduce over time in line withthe pathway indicated below (effectively always remaining below the Primary steel pathway).
•

Primary and Secondary thresholds: Table 13, section 5.3.3•

Reduction pathway: Figure 7, section 5.3.3

Further worked examples and context is available in the Steel Criteria document.

3 www.worldsteel.org/steel-topics/steel-markets/buildings-and-infrastructure

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3.5.2 Cement
Cement is a primary ingredient of concrete and accounts for almost 40% of the materials (by weight) in the construction industry.
The WLCA reporting requirements (effective from 01 January 2026), require that Low Carbon concrete, meets the thresholds set
out below.
Equivalent emissions intensities comparable to those set out in the Climate Bonds Cement Criteria are required. The emissions
thresholds for cement are provided below:
as outlined in the cement criteria document should be followed. This is outlined in section 4.2 of the cement criteria document
along with worked examples, for more information please see here.
•

The cement emission threshold used (in concrete production) must meet those provided : Table 5, section 5.2•

Plant level reduction pathway: Table 5, section 5.2

Note:

At this time, reporting thresholds (emission intensities) are only provided for cement.
Equivalent concrete emission values are not calculated, but can be calculated using a suitable
dilution factor[concrete emission intensity = 90% cement + other4 ]4 Environmental impact of concrete - Wikipedia

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4 Certification of Entities and Sustainability-Linked Debt (SLD)
Section 4.1 describes the Criteria for a property management company or a business segment focused on property management.
Per Table 1, Entity Certification is available only for those entities managing portfolios of commercial buildings. Assessment ofeligibility is based on the emissions intensity pathways only, i.e. Option 1(a) as described in Section 3.2.1.
Section 4.2 for criteria for an SLD instrument issued by such a company.
See also the Climate Bonds Standard v4.0 for the cross sectoral requirements for Entity and SLD Certification relating to Transition
Plans and Disclosure for the Certified Entity and requirements in respect of the Parent Group (if any). These cross sectoral
requirements must be met in addition to the building-specific requirements described here.
Note:

The Climate Bonds Standard allows for the certification of only part of a company or group ofcompanies (the ‘Certified Entity’), or SLD that relates to only part of a company or group ofcompanies. See the Climate Bonds Standard v4.0 for full details. This flexibility enables thecertification of, for example, a subsidiary dedicated to commercial property management,
separate from the certification of other segments or subsidiaries of the company dedicated toresidential property management or any other economic activity.

4.1 Certification of Entities
Two levels of Entity Certification are available, described in Table 4 along with the respective certification requirements.
Table 4: Levels of Entity Certification
Certification
Level

Entity Certification Requirements

Level 1:
“Aligned”

At the time of certification, the Certified Entity’s commercial building portfolio meets the emissions
performance target calibrated to the specific city or region (or a weighted average thereof), and their
future Performance Targets to 2050 continue to meet those declining emissions performance pathways(in line with Condition 1(a) in Section 3.2.1)*

Level 2:
“Transition”

At the time of certification, the Certified Entity’s commercial building portfolio does not meet the emissions
performance target calibrated to the specific city or region (or a weighted average thereof), but their future
Performance Targets align by 30 December 2030 and will continue to meet them after that date (in linewith Condition 1(a) in Section 3.2.1.)*(*) Note:

The emissions intensity thresholds over time describe a smooth linear line over time. In
reality, decarbonisation may likely result in step changes in emissions levels. To reflect this,the Performance targets should align with the emission intensity threshold every three years
as a minimum, but annual alignment is not required.

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4.2 Certification of Sustainability Linked Debt (SLD)Two levels of SLD Certification are available, described in Table 5 along with the respective certification requirements.
Table 5: Levels of SLD Certification
Certification
Level

SLD Certification Requirements

Level 1:
“Aligned”

At the time of certification the commercial building portfolio represented by the Performance Targets
linked to the SLD meets the emissions performance target calibrated to the specific city or region (or aweighted average thereof), and their future Performance Targets to 2050 continue to meet those declining
emissions performance pathways (in line with condition 1(a) in Section 3.2.1.)*

Level 2:
“Transition”

At the time of certification the commercial building portfolio represented by the Performance Targets
linked to the SLD does not meet the emissions performance target calibrated to the specific city or region(or a weighted average thereof), but their future Performance Targets align by 30 December 2030 and willcontinue to align that date (in line with condition 1(a) in Section 3.2.1.)*(*) Note:

The emissions intensity thresholds over time describe a linear line over time. In reality,
decarbonisation may likely result in step changes in emissions levels. To reflect this, thePerformance targets should align with the emission intensity threshold every three years as
a minimum, but annual alignment is not required.

Accounting and reporting on GHG Protocol Scope 3 emissions
Companies are required to report on Scope 3 emissions. These combined emissions intensities must meet the sector-specificguidance requirements, as set out in the GHG Protocol Corporate Value Chain (Scope 3) accounting and Reporting Standard.
The above is to be used in conjunction with the building’s specific Technical Guidance for Calculating Scope 3 Emissions document
while undertaking the calculations in-line with the GHG protocol methodology. Data Quality report underpinning the assessment ismade mandatory, this is made to ensure over time, companies should seek to improve the data quality of the inventory by replacing
lower quality data with higher quality data as it becomes available.

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Published for IssuanceAppendix A: Whole life cycle assessment scope in Buildings
Table 1: Life cycle assessment for commercial and residential assets
Building element
groups**System boundary(Figure 1)

Requirement for Commercial
Buildings:

Required building
elements:

It constitutes the building life cycle
stages, which includes:

1.

Facilitating
works - Including
demolition

2.

Substructure

1.

Product stage(A1- A3)

2.

Construction stage(A4 - A5)

3.

Super structure(frame)3.

End of life
(C1 - C4)

4.

Super structure(envelope)4.

Beyond system boundary:Reuse, Recycle, Recovery
(D)5

5.

Super structure(Internal
elements)

Requirement for Residential
Buildings:

Internal finishes wall, floor and ceiling

Same as commercial buildings,
additionally it requires reportingon operational carbon where
necessary
Note:

*
**

***

Floor area
Gross floor area
(GFA) - this GFA
definition are
country/region
specific.

(This is commonlyused for calculating
operational energy(B6) where it is
known asconditioned areathat refers to theareas heated)

Reference study
period50 - 60 years.

Impactcategories***Global warming
potential (GWP)(But local regulations
can vary in whichcase that can be
adopted)Following the relevant EN 15978 standard or international equivalence.
Building services/MEP, fittings, furnishings and equipment are not defined as it varies widely globally, if
required by local/national legislation then they can be included in the building element group.
Note: The structure is often associated with upfront embodied carbon. However, when a whole life
carbon assessment is undertaken, frequently replaced items such as mechanical, electrical, and plumbing(MEP) systems, play a significant role.
Only Global warming potential will ve required but if a local/national law requires other impact categories(as listed below) then that will be adopted.

Other impact categories include:
•
•
•
•
•
•
•
•
•

Ozone depletion
Photochemical ozone creation
Acidification
Eutrophication
Abiotic depletion, minerals and metals
Abiotic depletion, fossil fuels
Total use of energy
Use of fresh water
Waste processing

5 This requirement is only for EU Countries according to the EU Taxonomy

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Figure 1: Building Life cycle stages for defining system boundary

Table 2: Scope of WLCA under Climate Bonds Initiative low-carbon Buildings criteria
Scope for
Whole Life Carbon
Assessment (WLCA)

Appendix

Reporting on
Mandatory reporting of WLCA for:••

New Buildings built on or after 2025(?) - For new build assets, buildings, or infrastructure civil
works all life cycle stages must be assessed, including module D, and all building elements or
infrastructure elements within the project site boundary must be included in WLCA. This includes
any facilitating works and site preparation inside and outside of the asset footprint within the siteboundary.
Demolition/deconstruction of existing asset for the purpose of New Buildings - When any
full/part demolition or deconstruction of an existing structure is required to facilitate theconstruction of a new asset within the designated boundary, the emissions associated with that
demolition or deconstruction should be included in the WLCA in sub module of module A5 which
are classified into 4 parts (A5- (1-4)).

Scope of Modules•••

Module A: A0 - A5
Module C: C1 - C4 (where applicable)
Module B: B6 - B8 (where applicable)

Key project stages toundertake WLCA•

Adopt as written in EN 15978 or RICS Guidance/international equivalence

Recommend steps to carryout WLCA•

Adopt as written in EN 15978 or RICS Guidance/international equivalence

Spatial Boundary•

A WLCA should consider all construction works relating to the project, including any demolition
or deconstruction, facilitating works and site preparation required for building the asset, andexternal works within the site boundary. The site boundary should be in line with the intended

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Scope for

Reporting on
use of the built asset, including all areas associated with the project that are integral to its
operations. A town planning red line can serve as the site boundary where appropriate.

Element category for building
assessments•

All buildings are made up of building elements, that are grouped into categories such as
foundations, superstructure, envelope, and services. Please refer to Table 1.

Material impacts•

Choosing Low-carbon Environmental product declaration (EPD) - this provides detailed
information about specific products that improve the accuracy of buildings LCA, and comparative
analysis can be carried out to be better informed.

Area measurement

Floor areas from the following sources must be used and clearly stated in the WLCA, in the following
order and/or subject to availability at different project phases:•••

Material quantity

BIM Model
Bill of Quantities (BoQ) or cost plan
Consultants drawing

A WLCA must cover all the items listed in a projects BoQ, cost plan, or as identified in other records(3D models, drawings or specifications, etc) (Refer to Table 2).
Material quantities from the following sources must be used for each phase, and their source clearlystated.

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Published for IssuanceAppendix B: TWG and IWG members
Technical Lead Advisor:
Ché Wall

Director, Flux Consultants

TWG Members
Alan Yates

Technical Director - Sustainability,
BRE Group

Panama Bartholomy

Director, Investor Confidence Project(Environmental Defence Fund)Alex Rathmell

Director, EEVS Insight

Paolo Zancanella

Officer, European Commission (Joint
Research Centre)

Annie Degen

Special Adviser Long Term Finance,
UNEP Finance Initiative

Peter Sweatman

Chief Executive, Climate Strategy &Partners

Ché Wall

Director, Flux Consultants

Prashant Kapoor

Principal Industry Specialist,
International Finance Corporation

Chris Botten

Programme Manager, Better
Buildings Partnership

Robert Cohen

Technical Director, VercoJohannes Kreissig

Vice President Building &Construction, thinkstep

Simon Brooker

Executive Director, Clean Energy
Finance Corporation (CEFC)John Dulac

Buildings Sector Lead - Energy
Technology and Policy, International
Energy Agency (IEA)

Tatiana Bosteels

Head of Responsible Property
Investment, Hermes Real Estate

Jorge Chapa

Head of Market Transformation,
Green Building Council of Australia(GBCA)

Teun van den Dries

Founder & CEO, GeoPhyLoÏs Moulas

CEO, Observatoire de l'Immobilier
DurableVictor Rojas

Project Lead, Investor Confidence
Project (Environmental Defense Fund)

Oliver Rapf

Executive Director, Buildings
Performance Institute Europe

IWG Members
Grace Tam

Director - Debt markets
Clean Energy Finance Corporation(CEFC)

Hugh Garnett

IIGCC, United Kingdom

Isabelle Schatz

Blkb Switzerland

Szymon Smolarek

ING Hipotec, Poland

David Sellars

First Mac, Australia

Alison Chan

Metrics

Laura Conigliaro

Jupiter AM, United Kingdom

Begum Gursoy

Sustainalytics, European Union

Pip Best

EY, New Zealand

Karl Downey

SBTi, United Kingdom

Frans Baas

Vestada, The Netherlands

Jennifer Cooper

Brookfield, Australia

Appendix

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