ESG

As a lender we believe our biggest impact will be through encouraging environmental and social responsibility through the projects we finance, as well as committing to prudent lending, and excellence in our underwriting and loan management standards.

environment

Our core products are all about positive change for everyone that our projects touch.
As a lender, prudence, diligence and excellent underwriting are the starting point for all our projects. But we don’t stop there. We want to measure and improve the environmental and social impacts of the projects we finance.

Supporting the journey to sustainability in construction
We offer Green Loans for residential development under the terms of the Loan Market Association’s Green Loan Principles. These loans are linked to agreed environmental targets, based on our proprietary Green Criteria Framework. Designed specifically for residential housing development we use 5 environmental categories, that cover the full project lifecycle from design stage to end of life.

An industry that needs to change
The built environment accounts for nearly 40% of the UK’s carbon emissions, and 35% of London’s. Homes – both new and existing – account for 20% of emissions. In addition, construction in the UK produces 59% of the country’s waste and consumes 40% of its raw materials. The UK has set in law a target to bring all of its greenhouse gas emissions to Net-zero by 2050 – one of the most ambitious targets in the world. New homes being built now and in the next 5-10 years will still exist in 2050. It’s crucial that the industry makes sure that the energy efficiency standards set for them are on track to meet the 2050 target. As part of the journey to 2050 the government has committed to introducing the Future Homes Standard in 2025.

Measurement & reporting
In line with the LMA Green Loan Principles, our project monitors report against the environmental targets within their monthly lender reports.

SOCIAL

Creating social value through the projects we finance
Precis Capital will take account of the wider economic, social and environmental effects of the developments we finance. Social Value serves as an umbrella term for these broader effects, and we make a conscious effort to ensure that these effects are positive and contribute to the long-term wellbeing and resilience of individuals, communities and society in general. The United Nations Sustainable Development Goals are, in effect, a social value charter for the planet. We commit to making decisions both about what we do and how we do it in ways that add Social Value.

Helping underserved demographics and communities
Our loans predominantly help to finance first-time homebuyers and lower income rental units, owner-occupier starter homes rather than investor homes. We also assist those in later life to continue to lead fulfilling and independent lives in purpose built retirement communities with appropriate medical amenities. In addition, Section 106 agreements (an agreement between a developer and the local planning authority) are used to mitigate the impact of development projects on the local community and infrastructure. The financial contribution made by borrowers are typically funded through our facilities, and we assess whether these are based on fair requirements for Affordable Housing (between 35 per cent and 50 percent in the UK), or provide for other significant contributions to the community agreed with the local council. Delivery of Affordable Homes funded through Section 106 nil grant agreements accounted for 52 per cent of all Affordable Homes delivered in 2019-20.

Measurement & reporting
We commit to Social Value reporting and disclosure, allowing us to take action and report in a way that our clients and other stakeholders can relate to.

Read more on how we measure Social Value

GOVERNANCE

  • We manage commercial risk through our Credit Risk Management Framework
  • We adopt the highest underwriting standards and integrity, using prudent loan-to-value ratios, LMA standard loan documentation types, and other prudent lending practices
  • We conduct assessments against environmental, social and governance (ESG) criteria, helping our borrowers to future proof their assets against climate risk and pending regulation on energy and carbon. We work with our borrowers to fully understand and support their ESG aspirations with access to a network of professionals in a variety of disciplines.
  • Our Credit Committee is made up of a diverse range of executive and non-executives Directors
  • Read more about our Board members

    THE MOMENTUM BEHIND SUSTAINABLE INVESTING

    The sustainability revolution in investment management reflects the wider societal shift that has embedded ESG factors at the heart of business strategy. Business models are evolving to take account of the wide array of factors, from climate change to public health.

    Read our Insight article

    GREEN FINANCE FOR RESIDENTIAL DEVELOPMENT

    The UK has set in law a target to bring all its greenhouse gas emissions to Net-Zero by 2050 – one of the most ambitious targets in the world. As part of the journey to 2050 the government has committed to introducing the Future Homes Standard in 2025.

    Read our Insight article

    Measuring Social Value

    We know our clients make huge contributions towards society through their projects. But this is more than just a hunch. We proactively quantify this data.

    Read about our methodology