Whilst politicians may argue, the need for decarbonisation of the housing sector is not going away. As we get nearer to 2030, the social housing sector is getting on with meeting the interim target of EPC “C” but needs to also keep an eye on longer-term net zero ambitions.

Whilst most social housing Chief Executives or Finance Directors would acknowledge the importance of retrofitting their housing stock, you would get different answers as to how high it sits on their bulging in-tray! Regardless, the sector is keen to get on with this work but needs to figure out how to fund it. The Social Housing Decarbonisation Fund (SHDF) is providing valuable grant funding to complete retrofit works, but the £3.8bn allocated only covers a small proportion of the total cost.

Debt from the capital markets to cover these costs is available. Despite recent political uncertainty regarding climate initiatives from both sides of Government, institutional investors are more focused on ESG than ever, with demand for sustainable investing still high. Whether it be labelled as green bonds, social bonds, or sustainability-linked loans, investors like the sector’s work and are keen to encourage positive climate progress.

However, more debt will not solve the problem, and using tighter available surpluses on work that will not produce a financial return will be hard to justify. A level of innovation will be required. Fortunately, the social housing sector is now considered a mature and very investable funding proposition. This means it can potentially mobilise various sources of capital to power its decarbonisation journey.

Other solutions include taking advantage of strategic partnership work. There are loads of brilliant people and organisations doing fantastic work on retrofit and energy efficiency up and down the country. Due to the siloed ways of working our sector often gets trapped in, however, too many of these potential opportunities end up unexplored, to the detriment of both housing associations and tenants alike.

There can be real value in reaching out to people and organisations slightly outside the periphery of our everyday jobs. Often, sometimes surprisingly so, you will find a shared sense of purpose and goals, and opportunities to work together can emerge in places you might least expect. A few of us at The Housing Finance Corporation (THFC), for example, recently met up with the innovative team at Sero and learned about the work they are doing with Pobl and other housing providers to make homes more energy efficient for residents and less impactful on the environment.

The voluntary carbon markets could also provide a unique opportunity to access funding for important retrofit works, with HACT leading the way in the social housing sector with its cutting edge Retrofit Credits programme.

With so much impactful work happening inside and outside of the social housing sector in regard to EPC “C” and net zero, there is much to be excited about. The decarbonisation challenge remains a difficult one, but we at THFC are greatly encouraged by the innovative solutions we are coming across every day, and we remain committed to helping unlock the finance solutions needed to fuel the sector’s journey to a greener future.