Triodos Bank is set to link mortgage interest rates to the total CO₂ emissions generated over the entire lifecycle of a new home. Horizons Amsterdam, a residential development by Ballast Nedam Development, will serve as the pilot project for this new form of housing finance. Both companies announced the initiative today in Utrecht during the Built Environment Climate Summit. With this initiative, Triodos Bank and Ballast Nedam Development are taking steps ahead of the Dutch implementation of the European directive aimed at reducing emissions and energy consumption in buildings.

A key element of the implementation of this European directive will be the mandatory Whole Life Carbon (WLC) assessment for new buildings. This calculation method measures the amount of CO₂ a building emits over its entire lifespan. It includes embodied emissions associated with raw material extraction, production, transport and demolition, as well as operational emissions resulting from energy consumption during the building’s use. From 2028 onwards, this methodology will gradually become mandatory under Dutch building regulations. The exact calculation methodology and threshold values have yet to be determined.

Not waiting for regulations

Triodos Bank and Ballast Nedam Development do not want to wait until these thresholds have been fully established in legislation and regulations. Today in Utrecht, they announced their joint commitment to establishing a new standard for valuing and financing sustainable homes.

Horizons Amsterdam is particularly well suited to this new form of housing finance. Located in Amsterdam’s Sluisbuurt district, the residential development generates more energy than it consumes. It combines this high level of energy performance with extensive use of circular and biobased materials.

Part of the building is constructed using biobased and reused materials. At the end of the building’s lifespan, 91% of the materials used can be reused. Furthermore, these materials store nearly 480 tonnes of CO₂ (net) over the long term. Customers taking out a mortgage with Triodos Bank benefit from an especially low interest rate.

Dorine van Basten, Head of Mortgages at Triodos Bank, comments:

“Whole Life Carbon brings together the various aspects of a building’s climate performance over several decades. This creates the foundation for a new generation of financing products in which the actual climate performance of real estate carries greater weight.

“Triodos Bank and Ballast Nedam Development are not waiting for tomorrow’s standards. Instead, we are working together to help shape them today. In doing so, we are setting a movement in motion that can inspire the entire sector to make climate performance both measurable and financially viable.”

Bridging two worlds

In recent years, efforts to make homes more sustainable have focused primarily on energy consumption. As buildings become increasingly energy-efficient, a growing share of their climate impact is associated with other stages of their lifecycle.

This begins with the extraction and production of raw materials used in construction products. Transport, construction, maintenance, replacement and energy consumption must also be taken into account. At the end of a building’s lifespan, demolition, processing, reuse and recycling are equally relevant.

The long-term storage of carbon in biobased materials also forms part of a building’s broader climate impact. Together, these factors provide a much more comprehensive picture of a home’s actual climate performance.

Onno Dwars, CEO of Ballast Nedam Development, comments:

“It is a positive development that attention is shifting from energy performance alone towards the overall CO₂ impact of buildings. Together with Triodos Bank, we want to explore how demonstrably better climate performance can already be translated into financial value.

“Our joint initiative connects two worlds that have often operated separately until now: real estate development and mortgage financing.

“Our ambition is for homes with a lower climate impact to ultimately benefit from more attractive financing conditions. This would create an incentive for developers, builders and homebuyers alike to look beyond minimum legal requirements.

“In this way, Whole Life Carbon can evolve from a technical measurement methodology into a financial decision-making tool.”

Innovation in mortgage financing

For Triodos Bank, this initiative is a natural continuation of its longstanding commitment to innovation in sustainable mortgage financing.

The bank was the first mortgage lender in the Netherlands to link mortgage interest rates to a home’s energy performance. In 2022, Triodos Bank also became the first Dutch mortgage lender to introduce a mortgage product in which the choice of biobased construction materials influences the interest rate.

This marked the first time that material use was directly incorporated into private residential mortgage financing.

The move towards Whole Life Carbon extends this approach to encompass a building’s overall climate performance.

Dorine van Basten explains:

“With this collaboration, Triodos Bank is taking an initial step towards further developing its biobased mortgage into a Whole Life Carbon-based mortgage. Our existing biobased mortgage will serve as the starting point for driving this transition.”

Ballast Nedam Development has been at the forefront of promoting new standards in the real estate market.

Since 2017, the company has developed gas-free homes as standard. From 2019 onwards, it has exclusively sold homes that are energy-neutral or achieve even higher levels of energy performance.

Through its Ballast Nedam Development Decree, the company has also introduced stricter requirements relating to energy, health, circularity, nature-inclusive development and climate adaptation.

With projects such as Natuurhuis and the introduction of CO₂ trading linked to climate-positive homes, including Horizons, the developer is also creating economic value from the storage of CO₂ in biobased materials.

The collaboration with Triodos Bank now brings this innovative approach closer to homebuyers, based on the principle that climate performance should be both measurable and financially rewarded.