Financing Solutions to Accelerate Low Carbon, Resilient Real Estate
Workshop by Affine Climate Solutions and Banking on Building Program (2025) | Industry Insights
Montréal, Canada
At the end of October, I participated in a workshop hosted by Affine Climate Solutions, focused on accelerating the net-zero transition in Canada through innovative financing strategies. The event brought together a range of market participants to share progress and to engage wider support from the industry.
Research over the last twenty years shows that climate-aligned buildings deliver strong financial returns and lower risks for lenders, owners, tenants and fund managers. These buildings consistently outperform conventional assets by maintaining income and asset values, resulting in a lower risk of default. However, sector-wide adoption continues to be limited by high upfront costs, short-term incentives, and valuation practices that do not reflect the demand for green buildings. The need for targeted financing solutions, like preferential loans and mortgages, is clear, as these tools help bridge the gap and support broader market uptake.
The Banking on Buildings Program, launched in 2025, embodies a national effort to embed climate resilience and low-carbon performance into real estate financing. Backed by leading financial institutions including Bank of Montreal, BDC, Coast Capital Savings Federal Credit Union, and Vancity Credit Union, this program is designed to align lending practices with long-term asset value and climate objectives. Its aims include:
Accelerating the transition to climate-aligned real estate by linking financing tools to long-term building performance, supporting both emission reductions and resilience to extreme weather.
Equipping financial institutions with consistent frameworks and data to reward leadership on climate performance, with better financing terms.
Improving risk assessment and pricing to favour climate-resilient, low-risk assets in lending portfolios, boosting portfolio returns and managing downside risk more effectively.
The program is helping to build institutional capacity for integrating sustainability into risk assessments and lending decisions, positioning financial institutions as leaders in Canada’s net-zero transition.
Advancing Tools Through Industry Engagement
The event in October provided a forum for sharing and validating three core tools developed under the program:
Business Case Report: Analysis of market evidence since 2002 shows that green buildings maintain financial performance where conventional assets lose value. The next frontier is aligning assets and valuations with net-zero targets for a strategic, competitive advantage.
Low Carbon Financing Framework: This framework standardizes metrics for assessing low-carbon and resilient buildings, with compliance options through robust performance criteria or selected third-party certifications. It aims to simplify the process and encourage consistent adoption across institutions.
Financing Pilots: Pilot projects across asset classes and regions will test the framework and incentive models, offering preferential financing terms to buildings that meet the criteria and inviting wider industry participation for validation and scaling.
Through this initiative, the industry is building the tools and collaboration required to accelerate investment in climate-resilient and low-carbon real estate. It is encouraging to note that the recently approved Federal Budget 2025, which outlines Canada’s strategic priorities for the coming years, should pave the way for this and related programs to accelerate the net-zero transition across the built environment.
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