Impactful offsetting: Using carbon credits to fund social housing retrofit

Written by Gemma Drake, UKGBC:
As discussed in our previous blog, ‘Impactful offsetting: using regenerative farming to generate carbon credits’, offsetting residual emissions is the final step for a building to achieve net zero emissions.
The IPCC states that, “Achieving global net zero GHG emissions requires all remaining CO2 and metric-weighted non-CO2 GHG emissions to be counterbalanced by durably stored CO2 removals”.
Whilst social housing retrofit is not a form of removal, retrofit avoidance/reduction schemes support social value and a just transition. Homes become more energy efficient and comfortable, reducing their operational carbon and household bills while also tackling health issues and inequality. As such, social housing retrofit schemes are popular within the built environment sector due to the credits having a positive environmental and social impact directly within the built environment. In fact, retrofitting schemes are suggested by Arup and BusinessLDN as one of three portfolios that make up their proposed UK Collective Offsetting Fund.
UKGBC visit a social housing retrofit project
In July, HACT arranged for UKGBC members to visit Saffron Housing Trust in Long Stratton, Norfolk. The visit enabled UKGBC members to tangibly see the benefits of a UK-based offsetting scheme, ask questions, and learn about the challenges of home retrofit.
When we arrived at Saffron Housing Trust, we were greeted by members of the HACT and Saffron Housing Trust teams. They gave us a briefing on Retrofit Credits before taking us on a tour of Saffron’s homes that have been retrofitted with the help of carbon credits.
The first property we visited had completed retrofit works including solar panels, improved insulation, and a heat pump. The second house was in the process of having a heat pump installed when we arrived, giving us the opportunity to speak to Rob from Dodd Group who was installing the heat pump.

What did UKGBC members learn during the visit?
A key takeaway from the visit was how instrumental social housing retrofit credits are in filling the financing gap. The Social Housing Decarbonisation Fund (SHDF) provides funding to upgrade social housing stock that is below EPC band C. Around 800 properties at Saffron Housing Trust already had solar panels installed which meant that their EPC rating was C or above, making them ineligible for the funding. We know that an EPC rating is not an accurate reflection of the amount of energy that a building consumes, meaning that it is also not an accurate reflection on a household’s energy bills or the most effective way of tackling fuel poverty. Social housing retrofit credits provide Saffron Housing Trust with funding to further retrofit homes that are already at EPC band C.
Part of Saffron’s work is supporting the education of tenants on retrofit topics. Tenants are often aware of the benefits of improved doors and windows, but less so on other retrofit measures, which may involve a more extensive construction process (e.g. improved insulation or changing pipework if needed for a heat pump). Being able to experience retrofitted properties and see their benefits is a key part of this process.
More on Retrofit Credits
Written by Anotine Pellet, Head of Retrofit Credits, HACT
Retrofit Credits, developed by HACT in partnership with PNZ Carbon, is an innovative carbon credits scheme designed to finance and accelerate the decarbonisation of social housing in the UK. This initiative is unique because it not only focuses on reducing carbon emissions but also integrates social value into its framework, ensuring that the benefits of retrofitting homes extend beyond environmental impact to improve residents’ lives.
The scheme works by verifying the emission reductions achieved through retrofitting projects in social housing and translating these reductions into carbon credits. These credits are then sold to investors and organisations aiming to offset their carbon footprints, with the revenue reinvested into further retrofit projects. This creates a cycle of continuous improvement, where social housing providers can access new funding streams to enhance the energy efficiency of their properties.
One of the standout features of Retrofit Credits is its commitment to social value. Unlike traditional carbon credits, which focus solely on emission reductions, Retrofit Credits also measure the positive impact on residents, such as improved health, comfort, and reduced fuel poverty. This dual focus makes it a pioneering approach, combining environmental and social outcomes in a way that is not seen in other carbon credit schemes.
The visit to Saffron Housing gave members of UKGBC the opportunity to see the social impact of the scheme in action. The tangible benefits for local communities in the UK is what makes Retrofit Credits so unique, so being able to share these real-life examples of the retrofit work happening as part of the scheme is really important. We were delighted to have the opportunity to share the social benefits of decarbonisation and getting together in person with the UKGBC members was the perfect way to do this.
The initiative has garnered interest from a variety of buyers, including major organisations like The Economist Group and Unity Trust Bank. The scheme remains in a growth phase, looking to deliver more impact by partnering with more social landlords and the private sector.

If you would like to learn more about carbon offsetting and pricing in the built environment, you can read UKGBC’s Carbon Offsetting and Pricing Guidance and attend our Carbon Offsetting and Pricing Masterclass on the 8th of October.
For other UKGBC project visits, please see our events page.
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