Sustainable Finance

Banking on Buildings: Financing Solutions to Accelerate Low Carbon, Resilient Real Estate

Building the business case and financial tools to align real estate investment with low-carbon, climate-resilient outcomes.

Project Background

Research from the past twenty years shows that climate-aligned buildings offer clear benefits to lenders, owners, tenants, and fund managers, including stronger financial performance and reduced risk. However, higher upfront costs and weak short-term incentives discourage many developers from pursuing climate-aligned projects. At the same time, rising demand for these buildings is not yet reflected in standard valuation practices. Targeted financing solutions, such as preferential loans and mortgages, can bridge this gap and drive faster market uptake.

The Banking on Buildings Program is a national collaboration launched in 2025 to accelerate low carbon, climate resilient real estate through the financial sector. It examines both the drivers and mechanisms linking real estate performance to loan performance and credit risk, building the business case and institutional capacity for scalable, market-based financing solutions.

Research Report: Financing the Future →

Affine's Expertise

Affine Climate Solutions is spearheading the Banking on Buildings Program: a collaboration with leading Canadian financial institutions to develop practical tools, metrics, and engagement that advance low carbon, climate resilient real estate.

Through research, stakeholder engagement, and financing pilots, the program aims to align building performance with valuation, underwriting, and preferential financing

Objectives include:

  1. Strengthen risk assessment and pricing: Mitigate physical and transition risks for FIs by increasing the number of low-risk, climate-resilient assets in lending and loan portfolios, improving annual returns for these properties over time, and safeguarding against default risk. Help financial institutions support real estate clients in developing climate-aligned buildings.

  2. Create scalable, market-based incentives: Equip financial institutions with the data, tools, and frameworks to reward climate performance through improved loan and mortgage terms.

  3. Accelerate climate-aligned real estate: Align financing tools with long-term asset value and performance to drive adoption of low carbon, climate resilient buildings. This supports GHG reductions, high-quality local jobs, and resilience to extreme weather.

Founding Financial Institutions

Key Takeaways

  • Green Buildings Outperform by Avoiding Value Erosion

    Two decades of global evidence show green buildings better maintain net operating income and asset value, reducing default risk and strengthening portfolio stability while non-green buildings increasingly fall behind financially.

  • The Next Market Disruption Favours Net-Zero–Aligned Buildings

    Market differentiation is moving beyond efficiency and certifications toward buildings aligned with net-zero pathways, creating opportunities for financial institutions to improve risk models, enhance loan performance, and build more resilient, lower-risk portfolios.

  • Climate Risks are Redefining Real Estate Value

    Real estate valuation must reflect what drives today’s market. Traditionally, this was location, building quality, and tenant creditworthiness. Now, value is increasingly shaped by two forces: the global shift of capital, tenant demand, and regulation toward low-carbon assets (transition risk); and the growing impacts of climate change (physical risk).

“Affine delivers more than advice – they drive measurable change. Their outcome-driven approach turns research into practical strategies that align financing with long-term value. What sets Affine apart is their agility and expertise. This small but mighty team brings diverse voices together and accelerates climate-aligned solutions through evidence-based collaboration.”

Carla Heim
Director - Sustainability
BDC