Mortgages have ‘big part’ to play in tackling climate change

Mortgages have ‘big part’ to play in tackling climate change
Richard Merrett, co-founder of Mortgage Climate Action Group and head of strategic development for SimplyBiz Mortgages

The Mortgage Climate Action Group, set up by SimplyBiz, Sesame Bankhall and Legal & General, aims to open up conversations about climate change and the role the mortgage market can play to meet the UK’s climate targets.

The residential sector accounts for nearly 21 per cent of carbon dioxide emissions in the UK according to the Department for Business, Energy and Industrial Strategy.

While fewer than half of the homes in England and Wales have rated energy performance certificates of a C or above.

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Set up in April 2022, MCAG aims to help mortgage advisers better support their clients in efforts to make their property purchases more sustainable and bring emissions in the housing sector down.

The group’s co-founder and SimplyBiz mortgages head of strategic development, Richard Merrett believes advisers cannot properly support their clients to take action unless they are provided with the tools to do so. 

Merrett takes a 'honey over vinegar approach' when it comes to building engagement on climate change and believes that small, positive steps can play a big part in changing the landscape. 

“As an industry, there’s a lot going on but we felt something needed to be done to pull it all together and distil it to the consumer facing arm of what we do, which is broadly those in intermediary firms,” Merret told FTAdviser.

Merrett highlighted the action taken by the mortgage industry during the pandemic as an example of what is achievable in an emergency.

“It was at the government's behest to offer payment holidays, but the mortgage industry - lenders, distributors, advisers - moved really, really quickly to collate an extremely fast moving amount of information and changes,” Merrett said.

The Mortgage Climate Action Group wanted to tap into the same energy when it came to doing something on climate change.

Merrett said doing something felt “not only right” but was a sensible use of the industry’s resources.

“The mortgage industry has an extremely collaborative culture but I don't think we always make the most of it in terms of everybody across the chain working together. This felt like the right sort of topic to do so and channel that energy into,” Merrett explained.

Since its inception, HL Partnership, Mortgage Intelligence, Primis, Openwork and Paradigm Mortgage Services have also joined the organisation. 

Call for action

The group’s first action was to host an in person meeting with 16 of the UK’s largest mortgage lenders, and ask for support. 

Merrett described the response as “fantastic” and wants to continue to build on the momentum the group has attracted so far.

Awareness is the number one aim of the group, which wants to drive long term action in the sector through offering training and support to advisers.

The group eventually hopes to use its resources to lobby the government for further action as well.