How money can build a greener future
As Europe accelerates its push toward climate neutrality, the real estate sector finds itself under increasing pressure to decarbonize. Accounting for more than a third of the continent’s total greenhouse gas emissions, buildings (both residential and commercial) represent one of the greatest challenges and opportunities in the climate transition.
But turning this challenge into action requires more than energy-efficient windows and rooftop solar panels. It demands capital. Smart capital. And that’s where sustainable finance is beginning to change the game.
A new toolkit for an old sector
For years, the financial industry has been seen as a passive observer of the built environment. That’s rapidly shifting. Today, banks, insurers, and asset managers are creating new products that directly influence how buildings are constructed, renovated, and managed. These tools are not just about compliance; they’re about creating value by aligning financial returns with climate performance.
Some of the most promising instruments include:
- Green mortgages, which offer preferential rates to buyers of energy-efficient homes or those investing in renovations;
- Sustainability-linked loans and bonds, where the cost of capital is tied to the achievement of climate-related targets, such as reducing building emissions;
- Property-linked finance, which stays with the building rather than the owner, making it easier to invest in long-term efficiency upgrades without worrying about ownership turnover.
These financial tools are increasingly being embedded into a broader ecosystem of digital platforms and analytics. Real-time energy monitoring software, digital twins of buildings, and AI-powered valuation models now help both lenders and borrowers track performance, identify inefficiencies, and measure the impact of improvements. The combination of finance and technology is enabling a new level of precision and accountability in climate action.
Overcoming the complexity gap
Still, the integration of sustainable finance into real estate is far from seamless. Many of the digital tools depend on national data systems like Energy Performance Certificates (EPCs), which are not always accurate or consistently available. Privacy concerns also make it difficult to gather energy usage data from tenants, and the involvement of intermediaries (such as brokers or third-party assessors) can further complicate the process.
Moreover, the Return On Investment (ROI) for energy retrofits isn’t always clear-cut, especially in older buildings or regions with limited access to public subsidies. This calls for not just better products, but better storytelling: financial institutions must help clients understand the long-term value of decarbonization, not just in terms of climate impact but also asset resilience, marketability, and future regulation readiness.
A blueprint in action: BBVA and the power of green bonds
One of the clearest examples of how financial institutions can drive real estate decarbonization at scale is BBVA’s green bond strategy. Since launching its Sustainable Bond Framework in 2018, BBVA has become one of Europe’s most active banks in green and social financing. The bank’s green bonds are designed to support projects that contribute directly to environmental objectives, including climate change mitigation, sustainable resource use, and pollution prevention.
Green buildings are a core focus area within BBVA’s eligible categories, making up a significant share of its green bond allocations. According to its 2023 Green and Social Bond Report, BBVA has allocated more than €3.4 billion to green building initiatives (primarily in Spain) since the inception of its program.
Eligibility criteria
BBVA applies stringent criteria to determine which buildings and loans are eligible for financing through its green bonds. These include:
- For residential mortgages:
- New buildings with an Energy Performance Certificate (EPC) rating of A or B, placing them among the top 15% most energy-efficient properties in the national market.
- Renovated homes that achieve at least 30% energy consumption reduction as a result of the upgrade.
- For commercial buildings and real estate developments:
- Certification under credible green building standards such as LEED Gold or above, BREEAM Excellent or higher, or HQE Very Good or above.
- Alternatively, buildings must meet local top 15% energy efficiency benchmarks or achieve measurable improvements post-renovation.
This ensures that the financed assets align with robust environmental thresholds and contribute meaningfully to the decarbonization of the building stock.
Measuring impact
The bank publishes detailed reporting on both allocation and impact. As of the end of 2023, green building projects financed through its green bonds have contributed to avoiding more than 300,000 tons of CO₂ equivalent emissions. This figure is calculated using internationally recognized methodologies that consider the building type, use, energy performance, and geography.
In addition to climate benefits, these investments also support broader social outcomes, by reducing household energy bills, improving comfort and health for residents, and stimulating job creation in renovation and construction sectors.
Accessibility and scale
BBVA’s green financing is not reserved for elite developments. The bank has structured its green mortgage offerings to make them accessible to individual homeowners, including first-time buyers. These products often come with preferential terms, such as lower interest rates, larger borrowing capacity, and added services like free EPC assessments or renovation advice. In some cases, the financing can cover up to 100% of the investment cost for eligible energy efficiency improvements.
Where we go from here
Sustainable finance is no longer a niche. It’s becoming the foundation of how we build and live in the future. But to scale its impact, financial institutions need to move from experimentation to integration. That means:
- Embedding climate-related criteria into all real estate lending and investment decisions;
- Partnering with energy service companies, tech platforms, and local governments to simplify the customer journey;
- Prioritizing data transparency and interoperability, while safeguarding privacy and user control.
Ultimately, decarbonizing the built environment isn’t just about swapping gas boilers for heat pumps. It’s about redesigning the financial flows that shape our cities and our homes. At EkoElevate, we believe this shift is not only possible – it’s already underway. The next step is scaling it with speed, equity, and purpose.
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