More than third of Bank of Ireland mortgages in 2021 were green

AIB raised €750m in green bonds to finance projects with climate change and environmental benefit

More than one-third of all mortgages provided by Bank of Ireland last year were green, increasing to 45 per cent during the last quarter of the year, according to a new report.

Bank of Ireland published its Responsible and Sustainable Business Report 2021 on Monday. It stated more than €1.8 billion was drawn down from its sustainable finance fund by the end of 2021 across mortgages, home improvement loans and business loans.

It said it was taking “significant actions” to ensure the mortgages it offers were sustainable, including the integration of screen-based transactions (SBTs) to “reduce the carbon intensity” of the overall mortgage book.

It said these actions would help bring it in line with the decarbonisation trajectory of both national climate plans and the Paris Agreement, while “continuing to meet the demand for green mortgage financing from our customers”.

Bank of Ireland launched its green mortgage in 2019 in response to customer demand and to support the national climate plan. It said green mortgages and sustainable transport finance enabled its customers to “create sustainable, low-pollution, built environments”.

The group last year extended the availability of its green mortgage to include customers switching from another lender and to include building energy rating (BER) B-rated properties.

At the end of last year, €1.8 billion had been provided to customers in the form of green mortgages, where eligibility depends on buying, building or upgrading properties with a BER of B3 or better.

The bank also increased its green mortgage discount from 0.2 per cent to 0.3 per cent last year.

Estimated avoided emissions attributed to the group’s exposure to green mortgages for operational properties last year was approximately 30,000 tonnes of carbon dioxide equivalent per annum.

The report also said the bank has increased the value of its sustainable finance fund to €5 billion by 2024.

Bank of Ireland said it would align its lending practice with the low-carbon ambitions of the Paris Agreement by the end of 2022 by setting science-based targets across portfolios and operations.

Eamonn Hughes, chief sustainability and investor relations officer at Bank of Ireland Group, said: “The climate crisis is a critical threat. For our planet there’s no Plan B.

“We recognise the major role we can play in Ireland’s response and, through products like our green mortgage, we are putting environmental concerns – and practical responses to those concerns – into the heart of our business.”

Separately, AIB raised €750 million in green bonds as it completed its third green bond issuance, and fourth ESG issuance to date. The proceeds will go towards the financing of projects with climate change and environmental benefit as well as further strengthening AIB’s capital position, the bank said.

Investor interest peaked at €1.25 billion, with significant participation by “socially responsible” investors.

In 2020, AIB issued the first green bond from an Irish bank, for €1 billion, and last year it completed a €750 million green bond issuance. In May of this year AIB raised the first social bond issuance by an Irish lender for €1 billion, with proceeds supporting projects with clear social benefits across Ireland.

Colin Gleeson

Colin Gleeson

Colin Gleeson is an Irish Times reporter