Legal & General and Hodge announce multimillion investment into net zero enabler Sero Technologies to reduce emissions within the residential housing sector

Sero has developed industry leading digital tools and expertise to design and deliver cost effective low carbon solutions for both new build and existing homes. Sero works with landlords, mortgage lenders, housebuilders and more, to plot a pathway to net zero for their homes, providing the option of ongoing optimisation to ensure a good outcome for customers.

Heating and hot water for UK homes make up 25% of total energy use and 15% of our greenhouse gas emissions[1]. To achieve the UK’s legally mandated target of net zero by 2050, almost every home in the country will need to be improved or retrofitted with some combination of enhanced energy efficiency and low carbon heating. Retrofit represents a significant market opportunity in the UK alone, with the average home emitting nearly 6 tonnes of carbon per year,23 million homes using mains gas (carbon intensive) for heating, 2 million homes electrically heated (high running costs) and the remaining 2 million using heating oil or other fossil fuel systems (carbon intensive and high running costs). Net-zero planning also needs to be considered at building design stage, with early planning having a major impact on long term emissions.

With over 10,000 new build and existing homes within its identified pipeline, Sero has forged strong relationships within the housing sector, creating tailored net-zero energy retrofit plans for homes, assuring them using building passports and managing them using its smart home energy management system, ‘The BEE’ (Building Energy Engine) and comfort based service model. Sero has initially focused on working with social housing providers facing major challenges around regulation and funding, as they look to meet net-zero targets. Legal & General and Hodge’s investment will support Sero in its next stage of growth, as well as its aims to support the delivery net zero financial products with institutional partners.

Legal & General invests its capital in clean energy infrastructure, businesses and technologies to help accelerate progress towards a low-cost, low-carbon economy - working with local authorities, government and key industry players to create scaled solutions. Sero forms the latest part of its growing portfolio, which includes offshore wind, onshore wind, solar PV, EV-charging and ground-source heat pumps, amongst others. As one of the UK’s largest housebuilders by volume, with a commitment to deliver net-zero [operational] emissions from 2030 across its residential portfolio, there are significant opportunities for Sero to work with Legal & General’s existing housing assets and businesses.

Hodge, which is 79% owned by the Hodge Foundation, is a specialist in mortgages, commercial finance and savings. Since its inception more than 50 years ago, Hodge has sought new ways to help customers get the most from their money. It also ensures success for the business equals a positive impact on society. This is the second major investment in less than a year for Cardiff-based Hodge as the bank looks to grow its investment portfolio in line with its ethos of using banking for good.

Sero is a natural fit for Hodge as it looks to not only ensure that it continues to play its role in making society better but supports and invests in businesses which are closely aligned to this goal. Hodge already specialises in providing finance to homeowners and businesses and there are significant opportunities for Sero and Hodge to work together to provide solutions that support its customers. 

Later this spring Sero will be launching its industry leading Building Passport, a digital app that allows homeowners to gain a greater understanding of the carbon footprint of their home, how they can make it more energy efficient, and track the progress of the home on its pathway to net zero. This follows recommendations last year from the Coalition for the Energy Efficiency of Buildings (CEEB) for developing a standardised framework for Building Renovation Plans in the UK, to enable property owners to access digital information to help inform how they retrofit their home. 

This also aligns with the UK Government’s anticipated move towards improving home energy performance through lenders, with building societies and banks able to use the Building Passport to inform the use of green finance products.  Sero’s Capture app will be used to log data to understand more about each individual home. This data will then be used to create the digital Building Passport, which will set out the current building status alongside a clear and attainable route to net zero for each home.

[1] 2019 UK Greenhouse Gas Emissions statistics summary, see https://www.gov.uk/government/statistics/final-uk-greenhouse-gas-emissions-national-statistics-1990-to-2019