Climate Equity
Investing in an equitable green economy.
In New York, as in the rest of the nation, frontline and low-income communities bear the largest burden of climate change and associated pollution.
Additionally, these groups have historically been excluded from planning and other government processes that affect their communities and have had limited opportunities for participation in public decision making.
New York State’s approach to climate change, as codified in the 2019 Climate Act, therefore prioritizes the reduction of greenhouse gas emissions and co-pollutants in such communities and mandates that the transition to a low-carbon economy result in beneficial outcomes for historically underserved communities.
In alignment with the Climate Act, we will ensure that between January 1, 2020 and December 31, 2025, at least 35% of NY Green Bank’s capital is committed to projects that benefit disadvantaged communities as defined by the Climate Justice Working Group.
Over the past several years, we have proactively and steadily grown the proportion of our investments that benefit frontline communities. We are doing this through:
- Internal Enhancements and External Engagement
NY Green Bank has invested time and added staff and resources to building a lending practice focused on delivering benefits to front line communities through the closing of sizable bilateral transactions at market rates, including building electrification projects in affordable housing. Additionally, we have engaged with a wide range of environmental justice advocates, community-based organizations, and leading disadvantaged community financiers and project developers across New York to understand how NY Green Bank can better invest its capital to support frontline communities and to gather continuous feedback on our financing offerings. - Loan Products to Decarbonize Buildings in DACs
We offer creative financing solutions, including through RFP 18: Financing Arrangements for High-Performance Affordable Housing, to accelerate the decarbonization of multifamily affordable housing and other buildings that serve historically disadvantaged communities. Products include:- Predevelopment Loans to Support Building Decarbonization
Various early-stage activities must be funded before a developer closes on construction financing to build or renovate a multifamily building. To address this financing gap, NY Green Bank offers flexible loans to support predevelopment costs for projects that are committed to achieving deep energy efficiency, including for NYCHA PACT rehabilitation projects. - Incentive Bridge Loans and Facilities
NYSERDA and New York’s investor-owned utilities offer rebates and incentives for projects that install energy efficient products and systems. However, because such incentives are typically reimbursed after installation or over time, property owners and developers must pay for them up front. NY Green Bank offers incentive bridge loans to finance a project’s expected incentive payments.
- Predevelopment Loans to Support Building Decarbonization
- Building the Capacity of CDFIs and Other Local Equity-Focused Lenders
We offer financing, including through the Community Decarbonization Fund to capital providers, including community development financial institutions (CDFIs), non-profit lenders, and specialty finance companies working in New York’s disadvantaged communities. NY Green Bank’s capital enables such entities to overcome liquidity constraints and expand their sustainable lending offerings to the communities they serve. - Driving Community Solar Bill Savings to More Low- and Moderate-Income New Yorkers
Utility bill savings provided by community solar can be especially beneficial for low- and moderate-income New Yorkers, who tend to spend a disproportionately large percentage of their income on electricity. To incentivize developers to build strategies around intentionally increasing low- and moderate-income subscriptions to their projects, NY Green Bank now offers borrowers tiered interest rates for our community solar project loans based on the amount of low- and moderate-income households subscribed to a project. Through this pricing mechanism, developers can receive a discounted cost of capital — which boosts their project economics and creates what is already proving to be a meaningful motivation to deliver the benefits of community solar to more low- and moderate-income New Yorkers.
A Holistic Approach to Green Banking
While we are proud of our impact to date, we also understand that disadvantaged communities have historically been excluded from planning and other government processes that affect their communities and have had limited opportunities for participation in public decision making. We welcome the opportunity to continue to discuss financing solutions that will deliver benefits to historically underserved communities. You can contact us at [email protected].
Together, we can reduce greenhouse gas emissions while delivering cost, health, and quality of life benefits to historically underprivileged and disadvantaged New Yorkers.