Climate Change Data

Environmental Metrics

ESG Focus Areas

• Energy Efficiency
• Climate Change

Environmental Achievements

• Launched a green finance initiative in March 2020 to incentivize property investors to improve energy efficiency.
• Expanded product range to 'EPiC' range, rewarding landlords with energy-efficient properties.
• Supports regeneration of old housing stock, improving energy efficiency and avoiding demolition.

Social Achievements

• Not disclosed

Governance Achievements

• Established a Green Bond team with members from Credit, Product, Assets & Liabilities, and Risk Committees.
• Engaged S&P Global Ratings for an External Review of the Green Bond Framework.

Climate Goals & Targets

Environmental Challenges

• Risk that expected energy efficiency outcomes may not be achieved due to delays or cost increases.
• Risk that mitigation steps for negative environmental impact may not be effective.
• Risk of negative social impact if borrowers face financial difficulties.

Mitigation Strategies

• Lending only to sophisticated borrowers with relevant experience.
• Monitoring Green Loans throughout their term and replacing ineligible loans.
• Regular review of environmental and social risks and updating procedures.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: ICMA’s Green Bond Principles

Certifications: Null

Third-party Assurance: S&P Global Ratings

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Green mortgages
• EPiC range of property finance products

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Governance

Environmental Achievements

• Carbon neutral
• Launched Green Bond Framework aligned with ICMA green bond principles

Social Achievements

• Opened second UK office in Glasgow
• Gender pay gap: better than peer group on most metrics
• Board diversity: better than most of peer group
• BAME: more than 20% of employees
• Female: 40% of management
• Apprenticeship Scheme

Governance Achievements

• Transition of Executive Chair to Non-Executive Chair
• Undertook first Board effectiveness review
• Held first Strategy Day for the Board
• Accredited for Cyber Essentials and Cyber Essentials Plus
• Executive level ESG committee
• Servicer Quality (SQ) SQ1 ARC rating (maintained since 2015)
• Board independence ratio – 50%

Climate Goals & Targets

Environmental Challenges

• Challenging market backdrop including rapidly accelerating inflation and eight increases in the Bank Rate
• Dysfunctional economic environment resulting in a gap in the mortgage market
• Higher interest rate swap rates due to worse-than-expected inflation data and lack of market confidence

Mitigation Strategies

• Remained operational and swiftly launched products better suited for the new environment
• Continued to grow capital base and diversify FuM
• Secured new core funding partnerships (Lloyds Bank, BNP Paribas, Chetwood, Wells Fargo)
• Expanded relationship with J.P. Morgan
• Completed fourth securitisation
• Issued third listed bond
• Migrated Real Estate Opportunity Fund to new structure
• Raised £100 million from HSBC and approximately £125 million from Lloyds

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: UN's Sustainable Development Goals, QCA Code

Certifications: CarbonNeutral®

Third-party Assurance: Climate Impact Partners

UN Sustainable Development Goals

• Not disclosed

Our ESG Strategy is guided by the UN’s Sustainable Development Goals

Sustainable Products & Innovation

• Green mortgage range

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Social Impact
• Governance

Environmental Achievements

• Achieved carbon neutrality and a 61% reduction in operating emissions
• Maintained a focus on sustainable projects, including support for retrofit and energy-efficient property financing

Social Achievements

• Launched a new Early Careers Programme in Scotland
• Hosted various office events, such as Black History Month talks and International Women’s Day panels
• Raised £20k for Red Balloon Learning Centres

Governance Achievements

• Streamlined governance processes with divisional committees
• Updated cybersecurity measures in line with AWS best practice
• Maintained SQ1 ARC rating (since 2015)

Climate Goals & Targets

Environmental Challenges

• High interest rates, banking crises, and geopolitical conflicts impacted growth and profitability.
• Stringent affordability conditions, a weaker housing market outlook, and a reduction in investment confidence fuelled by political and economic uncertainty affected mortgage market activity.

Mitigation Strategies

• Internal restructuring, prioritising liquidity, enhancing the balance sheet by reducing and extending debt, and strategically reducing the cost base.
• Deployment of proprietary technology for mortgage origination and case management, enhancing efficiency and customer experience.
• Successful completion of multiple capital markets projects, optimising the balance sheet and demonstrating the strength of investor relationships.

Supply Chain Management

Climate-Related Risks & Opportunities

Awards & Recognition

• BCO Refurbished and Recycled Workplace award for Scotland (Glasgow office)