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Clarion development site in Colchester

Sustainable Housing Finance Framework

Sustainable investing

Sustainability is at the heart of Clarion Housing Group, the UK’s largest housing association. Our development arm, Latimer, builds thousands of energy-efficient, affordable homes each year, and our charitable foundation, Clarion Futures, runs one of the UK’s biggest social investment programmes.

We exist to provide homes for those who need them most.

  • Subsidised rents bring more than £500m of benefits to residents and the benefits system every year
  • Thousands of energy-efficient homes built each year by the most sustainable not-for-profit builder in the UK (according to NextGeneration)
  • Clarion Futures generates over £100m in social value each year
  • Strong balance sheet with £2.5bn in net assets

Our investors benefit from safe and secure investments, backed by bricks and mortar, while knowing that their monies will be used to deliver on clear sustainable ambitions and generate a significant social return.

Framework for investors

Our new Sustainable Housing Finance Framework, launched in 2024, provides a structure within which our investors can make sustainable investments. It is aligned with the International Capital Market Association’s (ICMA) Social Bond Principles, Green Bond Principles, and the Loan Markets Association’s Green Loan Principles, Social Loan Principles, and the ICMA Sustainability Bond Guidelines.

Sustainable Housing Finance Framework

Under our framework, Clarion will use the proceeds raised from financing to invest in environmentally and/or socially impactful project categories, all of which are clearly defined and aligned with both our Sustainability Strategy and the UN sustainable development goals.

Our Sustainable Finance Group is responsible for monitoring compliance with the framework, approving new eligible projects and planning the financial delivery of our Sustainability Strategy.

DNV have provided a second party opinion on the 2024 framework, confirming it complies with international standards on sustainable finance. You can read it here.

Sustainability bonds

We have issued £950m of sustainability bonds in the debt capital markets under our first sustainable housing finance framework, published in 2019:

  • In January 2020 we raised £350m with a 15-year bond priced at a coupon of 1.875 per cent. It was 3.7x oversubscribed.
  • In November 2020 we raised £300m with a 12-year bond priced at a coupon of 1.25 per cent. It was 2.3x oversubscribed.
  • In September 2021 we raised £300m with a 30-year bond priced at a coupon of 1.875 per cent. It was 3.6x oversubscribed.

The proceeds of these bonds are used exclusively for the development of new energy efficient affordable homes in line with the 2019 Sustainable Housing Finance Framework.

The table below details the expenditure on all affordable assets (“Total capital expenditure on new affordable homes”) and show the amount validated as relating to homes completed with a minimum EPC B rating (“Qualifying amount (gross)”). The table also includes a deduction for capital grant and forecast first tranche sales to give our net expenditure on energy efficient homes over the past four financial years.

Impact reporting under the 2019 Framework was completed through our Making a Difference ESG report and its predecessors. You can read our historic reports below.

Net expenditure on energy efficient homes

  • £327m

    in 2021-22

  • £163m

    in 2022-23

Andrew Hill, Director of Treasury and Corporate Finance

“Clarion appeals to investors seeking a business built for social purpose, with a commitment to ESG principles, robust financial performance and an ambitious plan for the future.”

Andrew Hill, Director of Treasury and Corporate Finance
Our social purpose

"Clarion Housing has committed to working towards its own ESG strategy alongside the United Nations (UN) Sustainable Development Goals (SDGs), and has outlined what SDGs its proposed Eligible Green and Social Projects will contribute towards."

DNV Business Assurance Services UK Limited

Read the review

The road to becoming net zero

Clarion will publish our comprehensive Climate Transition Plan for the first time in 2024, which will detail the scale of challenge ahead in meeting net zero, and our detailed plan to achieve it.

Latimer, our development arm, is already the most sustainable not-for-profit housebuilder in the country, according to the NextGeneration Benchmark. We achieved a Gold Award in 2023 through the initiative, which assesses the social, economic and environmental performance of the top 25 developers of new homes.

Read Latimer's sustainability report

We’re embedding sustainability across our operations, and our Sustainable Development Roadmap charts our route to having all our new homes zero carbon compatible by 2025. This is a key milestone in us reaching net zero by 2050.