Low Carbon Building Criteria
Frequently Asked Questions
Published for issuance (Dec 2023)

NOTE:

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

Revision

Date

Summary of Changes

Rev. 2.0

07 December 2023

Issued 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 Climate Bonds Initiative Standard v4.0

Rev. 1.0

July 2022

Final for IssuanceClimate Bonds Initiative - Low Carbon Building Criteria Document
Published for issuance (Dec 2023)

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 CO 2e per square meter determined from total emissions divided by net lettable floor area.

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Emissions Intensity: A quantitative figure expressed as kgCOe/m2, or kgCO2e/sq2.
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.
Net-zero: Net zero-carbon buildings are understood as highly energy-efficient buildings, in which CO2 emissions from all operationalenergy consumed over the course of a year are balanced out to reach zero through renewable and/or other zero-emission
energy supply.
Net-zero ready: Net zero ready buildings meet the definition of (fully) a net zero building (e.g. efficiency, electrification andembodied carbon targets) but are waiting on the decarbonisation of the electrical grid supply (scope 2).
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

2

1

Introduction

6

2

Questions on Market and Finance

6

3

4

What is a bond?

6

What is a Green Bond?

6

What is a Climate Bond?

6

What is the Climate Bonds Initiative?

6

What is a Low Carbon Buildings Bond?

6

What sort of organisations can issue these bonds?

6

Why does decarbonising buildings matter?

7

Why are Low Carbon Buildings important for green bonds?

7

Why does adopting the CBS provide access in funding and achieving decarbonisation goals?

7

How do financing buildings improve operating performance?

8

Questions on Scope

9

What types of assets and projects are within scope?

9

What is the Process for Issuing a Low Carbon Buildings Bond?

10

How many buildings can I include in my bond? Is there maximum or minimum on the total size?

10

What type of projects/assets portfolios can be Certified?

11

What should be the performance target for a mixed portfolio of projects/assets?

11

What if I add or sell the buildings before the bond matures?

11

Questions on Pathways

11

What are the available Pathways for criteria compliance?

11

What is a trajectory?

11

What is a proxy?

12

How were trajectories and proxies established?

12

What process needs to be followed for assets located in not listed in areas under the Commercial/Residential Location Specific
Criteria?
125

How quickly can Climate Bonds Standard develop a new trajectory or examine a proxy to see whether it’s eligible?

12

What is recommended and preferred to be used if both a proxy and a trajectory are available for a specific location?

12

Questions on Criteria

12What are the Low Carbon Buildings Criteria?

12What if an asset/ building under certification is not listed on the Location Specific Commercial/ Residential Criteria

13

If asset’s/building’s location is not listed, what data are needed to gather for the asset/building to be eligible for Certification?
13
What is required in case of a portfolio of buildings in different cities/ countries/ jurisdictions?

13

What if assets under certification are near a city, but not entirely within the city limits?

14

What if building’s carbon emissions data are missing but instead building’s energy consumption data are available?

14

What is the correct or good-quality data?

14

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Does a BREEAM Outstanding (or some other rating) certified building be eligible for Climate Bonds Certification?

14

Do LEED Gold (or some other rating) certified building be eligible for Climate Bonds Certification?

14

Does a third party building certified building be eligible for Climate Bonds Certification?

14

How updated are the Climate Bonds low carbon buildings criteria?

14

What are the new requirements for New Building according to the updated Low Carbon Buildings Criteria (Dec 2023)?

14

Do emerging countries, small-medium sized enterprise and residential properties/assets have a transitional period for phasingout fossil fuels in New Buildings?
15
What are the new requirements for Whole life Carbon Assessment?

15

What is in the scope of WLCA?

15

How do the Low Carbon Building Criteria correspond to the EU Taxonomy on Sustainable Finance?

15

Can Sustainability Linked Bonds (SLBs) and entities be certified under the new standards?

15

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1 Introduction
The purpose of this document is to provide answers to a series of questions that are commonly asked by our clients and clarity on
topics that are relevant to the Building Standards and Criteria. The topics covered in this document are:•••Questions on Market and Finance
Questions on Pathways
Questions on Criteria Requirements

2 Questions on Market and Finance
What is a bond?
A bond is a debt instrument or type of loan or IOU that governments, companies, and other entities issue to finance or refinanceprojects. The issuing entity guarantees to repay the bond over a certain time, plus either a fixed or variable rate of return to thebond buyer. A bond is a financial instrument that allows the issuer to borrow funds with the promise to pay them back with interestby a certain date.

What is a Green Bond?
Green Bonds are a fast-growing type of debt instrument similar in financial structure to a ‘vanilla’ bond outlined above. They are an
instrument for earmarking financing to fund projects that deliver environmental benefits. Most Green Bonds are use of proceeds
bonds, with the issuer committing to investors that all funds raised will go only to specified projects with positive environmental
outcomes.

What is a Climate Bond?
Climate Bonds are a subset of Green Bonds. Proceeds must be invested in assets compatible with a low carbon future in which
infrastructure or management projects are adaptable and resilient to current and future climate change. A Climate Bond is used bygovernments, companies, municipalities, and commercial and development banks to finance (or refinance) projects that address
climate change, such as wind farms, solar and hydropower plants, and rail transport and sea walls in cities threatened by rising sea
levels.

What is the Climate Bonds Initiative?
Climate Bonds Initiative is an international investor-focused and not-for-profit organisation working solely to mobilize the $100
trillion bond market for climate change solutions. We promote investment in projects and assets necessary for a rapid transition toa low carbon and climate resilient economy. The strategy is to develop a large and liquid Green and Climate Bonds market that will
help drive down the cost of capital for climate projects in developed and emerging markets; to grow aggregation mechanisms forfragmented sectors; and to support governments seeking to tap debt capital markets. Our work falls into three workstreams: market
intelligence, developing a trusted standard and providing policy models and advice.

What is a Low Carbon Buildings Bond?
It is a green bond that is used to finance or refinance buildings which are more energy efficient than most buildings in their local
market. This can include all types of buildings which are not deemed “infrastructure”.

What sort of organisations can issue these bonds?
Any type of organisation that own property can issue these bonds. So far, the issuers have included banks, universities, property
developers, local government, public housing agencies and others.
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Why does decarbonising buildings matter?
According to a recent study on Carbon Emissions by sector (Ritchie et al., 2020) Buildings accounts for more than 17.5% in energy
use with the following detailed breakdown:•

Residential buildings (10.9% of global emissions): energy-related emissions from the generation of electricity for lighting,appliances, cooking etc. and heating at home.

•

Commercial buildings (6.6% of global emissions): energy-related emissions from the generation of electricity for lighting,appliances, etc. and heating in commercial buildings such as offices, restaurants, and shops.

Further to that the International Energy Agency (IEA) highlights that the building sector is not on track in meeting the perf ormancetargets required in keeping global temperature rise to no more than 1.5 degree above pre-industrial levels.
Therefore, an early and rapid investment in the sector is critical to meet this performance target.

Why are Low Carbon Buildings important for green bonds?
The GHG emissions of cities are very significant and up to 70% of a large city’s emissions are related to its buildings. Buildings arealso a very widely understood sector in the debt capital markets. Therefore, entities with significant holdings in property are a ripearea for green bond issuance. You can find more information in the Climate Bonds Sector Criteria – Building Background Paper.

Why does adopting the CBS provide access in funding and achieving decarbonisation goals?
The Climate Bonds Standard (CBS) is the authoritative climate change standard that eases decision-making and focuses attention
on credible climate change solutions. The scheme of the current version (V4.0) has been based on the eligibility criteria for Assets
and Use of Proceeds (UoP) across the green sectors such as buildings, transport, water infrastructure, waste management,
agriculture, and renewable energy and several high-emitting sectors such as hydrogen, cement, chemicals and steel as well as for
Entities (Entity’s Building Portfolio).
The graph below highlights the total Use of proceeds (UoP) bonds issued against low carbon buildings over the course of the last
five years. The Buildings sector remains one of the three largest UoP categories, collectively contributing 77% to the total volumeof issuance relative to the energy and transport sectors.1

Green Building Bond Issued(in Bn $ USD)

UoP Low Carbon Buildings
250
200
150

100
50
0
2018

2019

2020

2021

2022

Year
Source:Market Data | Climate Bonds Initiative

Figure 1: UoP issuance against buildings
As the demand of Green Buildings Bonds is growing one of the main benefits for the issuer is a greater and more diversify inv estor
base. Therefore, by adopting the Climate Bonds Standard, the issuer would be able to have access to additional and more secure
funding sources.

1 www.climatebonds.net/market/data/

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How do financing buildings improve operating performance?
The Climate Bonds Buildings Criteria were first developed in 2012 and were aiming to reduce the operating emissions from newand existing buildings. It is well-known that buildings sector represents one of the largest contributors to climate change, both on a
global and local level. However, there is a vast potential for cost-effective mitigation through science based proven demand
reduction and energy efficiency technologies.
Therefore, the foundational requirements considered when developing these criteria was to ensure low transaction costs formeeting the criteria. As a result, the criteria were focused to tackle the major operational emissions sources by using the energy
efficiency indicator. This approach provides the required information that an asset is aligned with the Paris Agreement and the 1.5degree aspirations and ensures that the global building stock remains on track, as a sector and as regulators, owners, or por tfolio
managers.
The Buildings Criteria ensures to offer a robust and transparent method for investors and other key market players to access
whether bonds issued to fund commercial, residential buildings, public spaces and building components deliver outcomescompatible with the global targets.

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3 Questions on Scope
What types of assets and projects are within scope?
The table below presents indicative building assets and associated use of proceeds that might be included in a Certified Climate
Bond, which is subjected to meeting the specific criteria described.
The signposts provided in the table as follows:
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.
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
Residential Buildings
A building or portfolio of buildings where more thanhalf of the floor area is used or suitable for use fordwelling purposes, including but not limited to thefollow sub-categories of residential buildings:•••

Mitigation Criteria

Mitigation Criteria(UoP and Asset
Certification)(Entity and SLD
Certification)

Adaptation& Resilience

n/a

n/a

Single family
Multi-family
Rentals

Commercial Buildings
A building or portfolio of buildings where more thanhalf of the floor area is used for commercial purposes
and are intended to generate a profit, either from
capital gain or rental income. There are subcategories of Commercial Buildings, including but notlimited to:••••

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

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Buildings sub-sector

Mitigation Criteria

Mitigation Criteria(UoP and Asset
Certification)(Entity and SLD
Certification)

Adaptation& Resilience

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 toprojects that achieve energy performance
improvements through the application of energy
efficiency measures and components that relate to thebuilt environmentn/a

The red-light items are excluded either because they are incompatible with a low carbon climate-resilient economy or because
determining their eligibility is outside the mandate of the Building Criteria.

What is the Process for Issuing a Low Carbon Buildings Bond?
The flow chart below indicates the basic steps that needs to be followed for issuing a Low Carbon Building Bond

Step 1: What is the building type?

RESIDENTIALCOMMERCIAL

Step 2: Which city/country are thebuildings assets in?

Step 2: Which city/country are thebuildings assets in?

Step 3: Check if Climate Bonds has
a trajectory/ proxy for the thatlocation (website)

Step 3: Check if Climate Bonds has
a trajectory/ proxy for the thatlocation (website)

Step 4: Comply with Residential
Building Criteria (website)

Step 4: Comply with Commercial
Building Criteria (website)

Currently special use buildings such as, Labs, Data Centres etc as well as Industrial Buildings are excluded and cannot be ce rtified.
For further information please refer to the main Buildings Criteria Document.

How many buildings can I include in my bond? Is there maximum or minimum on the total size?
We do not have a limit on the size, in terms of the Criteria. This would be a commercial decision on the part of the Issuer.

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What type of projects/assets portfolios can be Certified?
Most likely issuers are seeking certification of their portfolios with different asset types in different cities/locations. These mixed
portfolios can be certified under the Low-Carbon Building Standards. If a mixed portfolio includes different types of buildings, thenthe use of the specific criteria for each type of building assets is necessary.

What should be the performance target for a mixed portfolio of projects/assets?
The performance target for a mixed portfolio including different type of buildings needs to satisfy the weighted average of thedifferent targets of building types and cities in the pool. It is also required to ensure that the buildings included in the portfolio tobe covered by existing criteria.
Generally, bond issuances are not restricted from addressing multiple food, fibre and fuel commodities and mixed systems. Bonds
financing multiple projects may also have to prove compliance with other Sectors to be eligible for a Climate Bond Certification. For
example, if a bond includes both buildings and solar projects it would be mandatory for the issuer to prove compliance with boththe Building Criteria and Solar Criteria.

What if I add or sell the buildings before the bond matures?
As with any of our Certified Climate Bonds, if the assets within the bond linked asset pool are changed, Climate Bonds and theinvestors would expect that the assets are replaced by something else with similar features, which also meet the relevant criteria
requirements. These changes will then be recorded in the Issuer’s Annual Report and communicated to the bondholders.

4 Questions on Pathways
What are the available Pathways for criteria compliance?
The Low-Carbon Buildings Criteria provide two different pathways to achieve Net-zero by 2050.
1.

Absolute Performance Improvement Pathway

2.

Relative Performance Improvement Pathway

These two different methods establish the threshold for whether a building is eligible for Certification. Both methods represent a
rapid emissions reduction which is aligned with the 1.5°C degree scenario and the Paris Agreement. Under each pathway there are
specific conditions that need to be satisfied.
Pathway 1: Bond issuers 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.

Pathway 2: to establish compliance with the relative performance improvement bond issuers need to fulfil the following:•

Condition 3 – Quantitative Improvement: Achieves a retrofit improvement in emissions intensity against pre-retrofit
baseline.

What is a trajectory?
Trajectories are expressed as an emission intensity metric [kg CO 2e/m2]. This is the ultimate measure that is most aligned with theParis Agreement goals and buildings are required to meet the Trajectory, for cities that have Trajectories available.

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What is a proxy?
Proxies are expressed using a variety of building codes and rating scheme, such as year of construction or performance rating andstandards. Proxies are used for cities where the Trajectory has not been developed by Climate Bonds Standard yet. Typically, Proxies
would be used for the first Certified Bond to be issued for a particular city.

How were trajectories and proxies established?
Trajectories were established by taking the emissions intensity of the top performers in a given city and drawing a linear pathway
down to zero carbon in 2050. They are location specific to reflect the conditions of different locations. For more details see
Trajectory Methodology.
Proxies use different techniques to measure the correlation between a building code or rating scheme and its ability to produ ceemissions reductions in-line with Low Carbon Buildings criteria demand for rapid decarbonisation. For more details see Proxy
Methodology.

What process needs to be followed for assets located in not listed in areas under theCommercial/Residential Location Specific Criteria?
Climate Bonds currently in the process of developing the requirements for more locations. However, if interested assets are notlisted, please do get in touch with our Standards Team (standards@climatebonds.net) to develop the necessary requirement.

How quickly can Climate Bonds Standard develop a new trajectory or examine a proxy to see whether it’seligible?
This depends on the city and the quality of data. Normally it would take from a few days to 4 weeks.

What is recommended and preferred to be used if both a proxy and a trajectory are available for a specificlocation?
Proxies are used only when a trajectory for a city has not yet been developed. If a trajectory is available, it replaces the proxy andnew bonds may only use this trajectory, because it is in full alignment with the Paris Agreement goals.
Note:when a trajectory is developed, it will NOT be retroactively applied to a building that waspreviously Certified under a proxy.

5 Questions on Criteria
What are the Low Carbon Buildings Criteria?
The Low Carbon Buildings Criteria sets out what property assets are eligible for certification under the Climate Bonds Standard. It
covers three different types of property assets: residential, commercial, and urban open spaces assets such as parks and the
supporting infrastructure such as street lighting, etc. The criteria developed under the Climate Bonds Standard address to ensure a
1.5-degree, science-based decarbonisation pathway to net zero by 2050.
It is a product of extensive consultation, using Technical Working Groups (TWGs), Industry Working Groups (IWGs) and public andstakeholder consultation. The TWGs comprise scientific, academic and research partners, civil society organizations and specialist
consultancies. The IWGs are represented by a broad, global range of industry experts, partners and operators including potential
bond issuers and investors.

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The Criteria are providing different decarbonization pathways to achieve Net-zero by 2050 based on the available data for thatspecific location. The following flow chart clarify the available options and required conditions:

The Criteria Document provides all the requirements that must be complied with for building related assets and projects to beawarded Climate Bonds Certification.

What if an asset/ building under certification is not listed on the Location Specific Commercial/ Residential
Criteria
Climate Bonds is currently in the process of developing new trajectories and constantly updating the Location specific requirements
for more locations. If asset in interest is not listed on locations specific criteria, please do get in touch with our Standards/Criteria
Team to develop the necessary requirement.

If asset’s/building’s location is not listed, what data are needed to gather for the asset/building to be eligible
for Certification?
Depending on the type of asset (commercial or residential) will determine the type of data required. The most useful data that we
can receive is carbon emissions data on buildings in the specific location. When this is not available, Climate Bonds leverage regional
codes, rating schemes and certification standards to establish best available market proxies. Asset level databases are required inboth cases.

What is required in case of a portfolio of buildings in different cities/ countries/ jurisdictions?
Use the relevant specific requirement for each location. They can all be combined into the same bond, there is no restriction on thenumber of different locations.

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What if assets under certification are near a city, but not entirely within the city limits?
If an asset is near, but not within the coverage zone of a city named on the Location Specific Criteria (Commercial Buildings,
Residential Buildings), use the nearest location that is available on those pages.

What if building’s carbon emissions data are missing but instead building’s energy consumption data are
available?
It is important to be aware that the energy consumption and resulting GHG emissions are two different metrics. Energy is measured
in kWh while emissions are measured in kgCO 2e. In order to generate an emissions figure from an energy figure, one must know
how the energy is being generated. A building’s GHG emissions are equal to its energy consumption multiplied by the local electricity
grid’s emissions factor. For example, 100 units of energy from a zero-carbon grid is equal to zero units of emissions, while that same
100 units of energy produced from a carbon intensity grid can be a much higher 50 or 100 units of emissions. Fuel factors and gridemission factors are widely available for most regions and countries.

What is the correct or good-quality data?
Data quality remains a reporting issue in the building sector. Climate Bonds will work with issuers on a case-by-case basis todetermine what data is available and what is possible for the specific location of the Issuer’s building assets.

Does a BREEAM Outstanding (or some other rating) certified building be eligible for Climate Bonds
Certification?
Climate Bonds have assessed the BREEAM rating scheme, and it is not well correlated with carbon emissions. However, the Issuer
is welcome to show that their building meets any relevant proxy or trajectory.

Do LEED Gold (or some other rating) certified building be eligible for Climate Bonds Certification?
Climate Bonds have assessed the LEED rating scheme and the rating that is most relevant to the Criteria thresholds is LEED Goldcombined with 30% improvement on ASHRAE 90.1. If building meets this threshold, then it is eligible under the Criteria.

Does a third party building certified building be eligible for Climate Bonds Certification?
In all cases, Climate Bonds applies the relevant Climate Bonds Standard proxy or trajectory, which has been developed to be fullyaligned with the Paris Agreement goals. Issuer is welcome to show that their building meets the relevant proxy or trajectory.

How updated are the Climate Bonds low carbon buildings criteria?
The Low Carbon Building Criteria were developed by the Low Carbon Buildings Technical Working Group and initially launched in2012. Since then, Climate Bonds has regularly meetings with the TWG with the latest in March 2023 in order to make sure thatcurrent criteria are always up to date with the most updated science, any relevant industry standards and regulations which arealigned with the Paris Agreement and 1.5°C scenario. The most recent criteria refreshment was in June 2022 leading to the latest
public consultation for the criteria in Sep 2023.

What are the new requirements for New Building according to the updated Low Carbon Buildings Criteria(Dec 2023)?
The updated Low-Carbon criteria set a clear distinction between the new and existing buildings and set up some new requirements
for new buildings. There has been updates on additional requirements for New Buildings and the requirement can be split into threepractical parts:
1.

No fossil fuels are used for heating, hot water, cooking, or on-site electricity generation.

2.

The building provides the necessary infrastructure to support electric mobility where on-site car parking is provided.

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3.

Shift to all electric buildings (electrification)

Additionally, the New Buildings are also required to report on the following:
1.

Reporting on Whole Life Carbon Assessment.

2.

Accounting and reporting on GHG Protocol Scope 3 emissions.

The last part is only relevant for Entities Certification. For more information, please refer to the updated Low-Carbon Building
Criteria document.

Do emerging countries, small-medium sized enterprise and residential properties/assets have a transitional
period for phasing out fossil fuels in New Buildings?
No, since it is for new builds, the planning and designing stage will allow for certain transition period until the project/assets
sanctioned and that should be enough transition period for SME’s and residential buildings as well as emerging markets to become
fully electric.

What are the new requirements for Whole life Carbon Assessment?
New Buildings will be subject to a mandatory reporting of Whole Life Carbon Analysis (WLC) according to the RICS Guidance. The
assessment needs to be in line with the Greenhouse Gas (GHG) accounting recommendations (Scope 3) relating to carbon
accounting and should include a data quality statement underpinning the assessment.

What is in the scope of WLCA?
The following modules are included in the scope:▪
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Module A (A0-A5)
Module B (B6-B8 where applicable)
Module C (where the property/asset is demolished for a New Building) (C1-C4)
Module D (New Buildings built after 2025)

How do the Low Carbon Building Criteria correspond to the EU Taxonomy on Sustainable Finance?
The updated Low-Carbon Building criteria is in-line with the EU taxonomy Annex 1 Mitigation requirements for substantial
contribution. In addition, a supporting guide for the Do No Significant Harm (DNSH) criteria has been developed to inform investorsof the relevant documentation needed for compliance.

Can Sustainability Linked Bonds (SLBs) and entities be certified under the new standards?
Entities and SLBs can be certified under the Climate Bonds Standards V4.0 however this is applicable to commercial properties only.
This means that if an entity (in this instance a commercial property company) meets the entity-level sector criteria as outlined in
section 6 of the Low-Carbon Buildings Criteria document, all debt issued by that company will, by extension, be certified by Climate
Bonds. Currently, the only entities that will be able to get certified (following update to the overarching Standard) will be nonfinancial corporate entities.

Low Carbon Building Criteria – Frequently Asked Questions

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