Embracing loan finance has been a slow burn revolution for the UK voluntary sector. Loans require discipline and professionalism - they need to be repaid on time and in full. As I know from my own work running the UK’s leading property advice charity, this has proved quite a journey for many charities, not least those grant-minded trustees, for whom loans seem, well, not very charitable. News that CAFBank has just extended its loans offer to green loans is welcome, because achieving long term sustainability can be costly – not least because so many organisations occupy older, less energy efficient buildings. 

Of course, most will only be able to afford to show willing by changing the light bulbs. After that, we are talking insulation, your ‘Fabric First ‘insulation retrofits, swiftly followed by air source heat pumps (payback time in terms of cost benefits 9 years); solar water heating (20 years), and solar photovoltaic panels and double glazing which on commercial buildings can be 40 years. 

Perhaps the biggest shift over the last 5 years, that we have seen at the Ethical Property Foundation (EPF), is that for medium and large charities and social enterprises, sustainability has become critical, not just to basic property management, but for whole business planning, with investment in upgrades implemented in line with key strategic milestones. 

When my colleagues deliver property strategies and building surveys for charities seeking to move, buy or improve their building, it is the range and capacity for improvements which is as important as the current condition. Achieving sustainability can be a slow process, and for our complex and diverse voluntary sector, as this means taking money away from serving frontline need, it requires  building a convincing case for achieving Net Zero which involves everyone in a charity community – staff, volunteers, trustees, funders, suppliers, clients, service users, tenants. 

One of the most inspiring green buildings I have visited recently, is the CAFOD (Catholic Agency for Overseas Development) headquarters in south London – a carbon neutral well-planned heaven, which over a number of years has thoughtfully transformed an unremarkable old concrete building into the future. What an amazing place, living the charity’s core values and now full of paying tenants and young enthusiastic staff members keen to come into work. 

Obviously green comes in various shades and hard-pressed finance directors may see sustainability purely in terms of cost savings: hybrid working and rising energy bills having concentrated financial minds wonderfully since the pandemic. However other key factors are now at play: funders and corporate partners now seek reassurance that charities are working the talk, because of their own ESG credentials. If you are going to pitch for commercial or council contracts, then you will need to demonstrate solid benchmarking. And if your charity is keen to sell and achieve a decent price in a period of sluggish commercial property prices, then the higher the building’s energy performance the better.  

And long gone are the days when people would happily work in rubbish buildings to do good in the world. To attract staff, not-for-profits must now offer attractive workplaces. Younger staff are especially wised up and invested in a sustainable future and can spot a greenwash a mile off. Sustainability therefore must be embedded into everything your charity does. Many charities have also become accidental landlords since the pandemic and need to parcel out their spare space into lettable, income generating opportunities. There’s a lot to space to choose from and so tenants are becoming pickier and are far more are aware of what landlords need to provide. 

Greening your building, as I saw in practice during my CAFOD visit, is about good planning, expert facilities management and critically, accurate robust reporting and benchmarking. We need to attract good people into our sector to build our collective knowledge and best practice. Here at EPF, we have just brought in an expert facilities manager to support us in our own journey, as well as all our property education. 

Changing the world may be cheerful but making it sustainable for the long term is rarely cheap, hence why green loan finance must be part of the solution.