Action to make UK homes warm and energy efficient will cut emissions, fight fuel poverty and create green jobs. But with 21 million properties in need of an energy efficiency upgrade, more funding is urgently needed.
A new type of carbon credit from the Housing Associations’ Charitable Trust (HACT) and its partner PNZ (previously Arctica Partners) is tackling this challenge, financing work where it’s needed most. Businesses and other organisations that want to meet their own climate commitments can buy credits equivalent to their emissions, and those credits fund energy efficiency upgrades to social housing. This means people can benefit from extra insulation, replacements for draughty doors and windows, or modern heating technology.
This unique carbon credit scheme means HACT have found a way to bring new money into the system for improving social housing. More social housing tenants will be warmer and homes will be cheaper to heat because companies can choose to fund emission reductions where they will have the most social and environmental impact.
The system is closely monitored to check it’s lowering emissions, but also delivering other benefits – like boosting people’s health, and creating skills and jobs in marginalised communities. These high-quality, verified credits bring new finance into the retrofit sector, and set a standard for other credit schemes to follow.
The initiative’s pilot phase, completed in 2022, created annual emissions savings of 5,000 tonnes and supported improvements in 6,700 homes. There are more than 1,500 social housing providers in the UK, and a growing number are signing up to the scheme.
To benefit from the credits, providers share details of their planned home upgrade projects with HACT and its partner PNZ, co-creators of the scheme. These projects might include installing heat pumps, improving loft insulation, or other measures.
HACT verifies the carbon savings that will be created, and uses this information to price credits for that specific project. These credits are then bought by organisations who can confidently say that their own emissions are being offset by work they are funding elsewhere.
To ease the burden on providers, HACT’s assessment draws heavily on plans and data that will need to be generated anyway to meet building and environmental regulations. The credits are audited by Verra, global experts in climate and sustainability standards. The development of high-value, traceable credits will help to build confidence in the wider carbon credit system – vital for unlocking funding and investment globally.
In 2021, 90% of the carbon credits bought by UK organisations funded projects outside the country, such as rainforest restoration. The development of credits supporting UK work may also help businesses look closer at their own sectors and supply chains. PNZ are also developing plans for the credits to fund upgrades carried out by private homeowners. Millions of private properties in the UK are in need of improvement, with high up-front costs a major barrier to action.
Tracking the scheme’s social impact – from green jobs to better health
HACT has long been a pioneer in the world of social value having developed its own social value bank methodology and tools, to measure the wide-ranging benefits of work done by the organisation and its partners. They have now also applied this methodology to the carbon credit scheme, looking at the improvements to an individual’s wellbeing as a result of the retrofitting activities
These measurements look at topics from boosting health and job creation to enhancing the environment and engaging young people.
In Dorset, HACT is piloting an approach where housing association residents themselves are trained to take part in the work as installers, administrators, and verifiers. This will introduce new possibilities for social impact, and meet the rising demand created by the availability of the credits.
The UK faces a huge challenge to make millions of homes low carbon, and businesses face greater pressure to offset their emissions. HACT’s scheme will bring new money into the retrofit sector, creating benefits for tenants and the planet.
1 November 2023
Ashden Award for Integrated Energy Africa
25 October 2023
Ashden Award for Natural Climate Solutions
Ashden Award for Outstanding Achievement
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