Financing Building Renovation: Financial Technology as an Alternative Channel to Mobilise Private Financing
Mark Cummins, Theo Lynn & Pierangelo Rosati
Disrupting Buildings
Business School

Moves towards a long-term net zero emissions objective are complex and multifaceted. One part of this global picture that needs to be addressed effectively is the high level of energy inefficiency amongst a high proportion of buildings globally. For the EU, it was estimated, for instance, that (as of 2011) approximately 75% of the building stock in the EU required some form of energy efficiency upgrade in the form of retrofitting and renovation. As well as reducing emissions, these renovations would enhance quality of life for people living in and using the buildings, and should create many additional green jobs in the construction sector.

Feedback in an EU consultation suggested that lack of or limited resources to finance building renovation is one of the biggest barriers to building renovations. Other issues include a lack of financial incentives, access to mainstream financing products, and funding for publicly owned buildings. In response, ensuring adequate and well-targeted funding is central to the EU Renovation Wave strategy. Despite this, while the European Commission highlights the need for greater adoption of digital and innovative technologies in the construction sector and identifies specific digital tools and technologies, it is silent on financial technologies and how they might reduce barriers to building and renovation finance.

Against this backdrop, this DCU research collaboration will explore the financing of building renovation and how innovations in the financial technology (FinTech) space may serve to mobilise more private financing. Having reviewed recent research on financing building renovation, the team defined and outlined key FinTech concepts and technologies. They then explore two of the most prominent FinTech solutions—crowdfunding and blockchain-based solutions.