Link finance and insurance to carbon and sustainability performance
To get the most from the Implementation Framework explore strategies and actions across each project phase to see how the Principles for Responsible Timber Construction can be applied.
Strategies
Strategy 3.2 Link finance and insurance to carbon and sustainability performance
Integrating carbon and sustainability performance into financial and insurance criteria is a powerful way to accelerate the uptake of responsible timber construction. By linking access to capital and coverage terms to measurable sustainability outcomes – such as whole life cycle performance, responsible sourcing, and ESG compliance – investors and insurers will drive meaningful market transformation. This approach reduces exposure to climate and regulatory risk while rewarding projects that deliver verified environmental and social benefits. Financial institutions can use sustainability-linked loans, performance-based premiums, or green bonds to encourage responsible timber development, aligning returns with long-term net-zero and biodiversity goals. Clear carbon and resilience metrics give both lenders and insurers greater confidence in timber’s performance, unlocking capital for sustainable construction and embedding accountability across the built environment financial ecosystem.
Principles for Responsible Timber Construction included in this strategy
Stakeholders
Actions
Integrate embodied carbon metrics into ESG reporting and portfolio-level performance indicators
Link funding terms directly to carbon and biodiversity metrics. Use third-party LCA and ESG data to verify performance and align returns with sustainability goals.
Tools and Guidance
Principles included in this strategy
- Accounting for Whole Life Cycle
Develop risk models that recognise resilience benefits from prefabricated and responsibly sourced timber
Tools and Guidance
Principles included in this strategy
- Accounting for Whole Life Cycle
Disclose embodied carbon results and demonstrate compliance with whole-life performance benchmarks to secure lower financing costs
Tools and Guidance
Principles included in this strategy
- Accounting for Whole Life Cycle
Include ESG-linked loan or bond covenants tied to Whole Life Cyclearbon performance
Disclose embodied carbon results and demonstrate compliance with whole-life performance benchmarks to secure lower financing costs.
Tools and Guidance
Principles included in this strategy
- Accounting for Whole Life Cycle
Informing the future. Monitor timber safety, durability performance, on-site practices and material handling to improve future risk modelling for timber projects
Tools and Guidance
Principles included in this strategy
- Accounting for Whole Life Cycle
Link funding terms directly to carbon and biodiversity metrics. Use third-party LCA and ESG data to verify performance and align returns with sustainability goals
Tools and Guidance
Principles included in this strategy
- Accounting for Whole Life Cycle
