Green Financing for Contractors: What Qualifies as a “Green” Build?

As both local and national climate targets tighten, what qualifies as a “green” build has become more clearly defined and more consequential. For contractors and developers, meaningful implementations of green building features can now influence access to financing and directly shape project feasibility, both of which are increasingly determining competitiveness in tenders and partnerships.

Broader policy goals, such as the Singapore Green Plan 2030 and the Indonesia Green Taxonomy directive, are the impetus for this shift, particularly in areas related to decarbonisation. With buildings accounting for a significant share of emissions, financiers and regulators alike are paying closer attention to how projects are constructed and operated over their full life cycle, not just in the initial promises of the pitched designs.

For contractors exploring green or sustainability-linked financing, understanding what lenders typically look for is essential. While specific requirements vary by financing programme, the qualifications below reflect the common benchmarks used in regional programmes in Southeast Asia to assess whether a project technically qualifies as a “green” build.

1) Use of Low-Carbon and Sustainable Materials

The use of low-carbon concrete, recycled steel, sustainably sourced timber, and other verified sustainable building materials can materially improve a project’s environmental profile, and in many cases, its real-world performance. This is an especially critical point for businesses based in Singapore, where most construction materials are imported. Financiers are increasingly looking beyond just embodied carbon and including operational and logistics-related emissions for materials used in projects.

2) Demonstrable Energy Efficiency ImprovementsProjects that incorporate sustainable building materials, improved insulation, optimised window glazing, and other passive energy-saving design strategies are in a better position to qualify for available green loans. However, simply implementing or promising these additions is not enough.  In many cases, lenders also expect measurable reductions in energy intensity compared to baseline building readings, as well as regular reporting as a financing condition.

3) Recognised Green Building CertificationTo illustrate further in the case of Singapore, formal certification from the Building and Construction Authority, specifically, its Green Mark framework, is generally viewed as meeting baseline environmental performance standards. Simply having a Green Mark by itself is not necessarily going to help qualify for green loans, but it does provide financiers with third-party validation, reducing uncertainty around environmental claims. Higher Green Mark ratings, particularly those that emphasise energy efficiency and whole-life carbon reduction, tend to carry greater weight in current financing assessments.

4) Whole-Life Carbon Accounting

In contrast to typical practice elsewhere, green builds are no longer assessed solely on construction-stage emissions. Increasingly, lenders expect a whole-life view of emissions that considers embodied carbon, operational energy use, maintenance, and eventual end-of-life impacts.

For that reason, new builds are no longer necessarily the first option. Retrofitting and repurposing existing structures can be especially attractive because they avoid the significant embodied carbon associated with demolition and new construction, while still allowing for meaningful improvements in energy performance, building efficiency, and long-term environmental outcomes. However, new builds that incorporate durability, adaptability, and long-term performance into their design can also signal a robust approach to sustainability.

5) Design for Future Adaptability

To continue off the last point, whether they are new builds or retrofits, green projects are increasingly expected to remain relevant over decades. This means that they must be designed to accommodate future upgrades, retrofits, or changes in use that reduce the likelihood of premature demolition or major refurbishment. From a financing perspective, adaptability lowers long-term environmental risk and supports the case for green funding.

6) Integration of Renewable or Clean Energy Solutions

On-site renewable energy generation, most likely through the use of rooftop solar panels, is a strong but not necessarily mandatory indicator of a green build. What matters more to financial institutions is that the project meaningfully reduces reliance on fossil fuels compared to current baselines.

Given that green energy is still continuing to evolve, some lenders may not be too specific about the adoption of certain technologies, but they may include provisions for future renewable integration, energy storage readiness, or participation in district-level clean energy systems. Financiers may also assess whether proposed energy strategies are realistic within urban constraints, and not just purely aspirational.

7) Efficient Water and Resource Management

At a minimum, green builds are expected to incorporate water-efficient fixtures and recycling systems, if not full-blown smart monitoring technologies. Given Singapore’s ongoing efforts to reduce reliance on foreign water sources, these initiatives are also likely to align with broader, state-sponsored water management goals.

As far as wider resource efficiency is concerned, financiers may now include waste reduction during construction and operations into their assessments. Projects that can demonstrate reduced waste generation or improved recycling outcomes may be seen as better choices for a variety of green funding initiatives.

8) Strong Governance and ESG ReadinessFinally, a green building is rarely assessed in isolation from the organisation delivering it. Lenders often evaluate whether contractors have the reporting capabilities and internal accountability needed to deliver and maintain their promised environmental outcomes. Generally speaking, businesses must now present clear ESG policies as well as demonstrate transparent data and credible reporting processes to strengthen their project’s financing case.

Build Your Green Credibility for the Long HaulWe’ve seen that what qualifies as a “green” build today may not necessarily cut it in the next generation. Sustainable projects demand a coordinated, future-forward approach that spans design, materials, operations, and even corporate governance.

This shift presents both a challenge and an opportunity: projects that meet these criteria not only contribute to national sustainability goals but also gain access to a growing pool of green financing options. As early as now, contractors and other organisations that make an effort to meet green financing requirements will be better prepared for what lies ahead.