Accelerating the transition to sustainable buildings: UBS and NORM

Earlier this year, UBS and NORM announced a strategic partnership aimed at significantly reducing CO₂ emissions in the real estate sector, bringing Switzerland closer to achieving its net-zero target. To learn more about this impactful collaboration, we spoke with Ladina Mitropoulos, UBS and Gian Reto à Porta, NORM. They shared insights on how their joint efforts are driving sustainable transformation in the industry.

‍What does NORM do?

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Gian: We want to motivate and help homeowners to retrofit their buildings. When we analyzed the space, we found that many homeowners are aware that they should take action. However, the next step, which involves going into details and understanding what specific measures to take, is the challenging part. Each decision impacts other aspects of the building. What measures do I need to take together? How much will it cost, and how can I finance the entire package? Our analysis shows that this complexity is where many homeowners decide it’s too difficult to proceed.

We want to motivate and help homeowners to retrofit their buildings.

How do UBS and NORM work together?

Ladina: We share a common goal, which Gian has already highlighted. We want to support the transition to green buildings and motivate homeowners to renovate their properties. UBS is committed to advancing sustainability, and that includes the lending area. We want to make our mortgage portfolio greener and contribute to our sustainability goals. This principle should be firmly anchored in our advisory process, not just when a client buys a new house. For most clients, their property or house is the most significant investment they've ever made. A complementary solution is essential when clients decide to start their renovation projects, as Gian has mentioned. Clients often don't know whom to approach or where to get an assessment of their property.

We want to demonstrate how sustainable renovation can help them preserve and even enhance the value of their property.

‍NORM was founded only 1.5 years ago. How did the collaboration between UBS and NORM come about?

Ladina: We met NORM at a Fintech fair with a UBS representative. At first, it was more about identifying the needs of UBS and its clients. NORM then proposed a solution that fit our needs and addressed the challenges we discussed. We know that working with a large corporate like UBS is challenging, especially navigating the onboarding process and technical integration.

It requires a lot of effort from both sides. We adopted a lean approach to test the partnership by starting with a pilot. We gathered valuable user feedback and discussed it with NORM. They were flexible and adapted their solution through an iterative process.

We focused on what's necessary for our clients to connect them with NORM's solution. You don't always need to start with a fully-fledged technical integration. This approach helped us bring the solution to market relatively quickly.

Gian: This approach worked really well, and in addition, we collaborated closely to shape the solution. Ladina and her team provided their requirements, and we worked together to figure out what the minimal integration could look like. It was crucial to have a close collaboration, rather than just presenting a solution for them to buy and install.

Ladina: It's a true partnership with clearly defined roles. UBS talks to the client about the need for renovation, the impact on the property, and financing. On the other hand, we have NORM as energy experts. The clients are fully aware that they are dealing with NORM directly, establishing a clear and contractual relationship. This arrangement simplifies and smooths out the process significantly.

Why not build internally?

Ladina: The market is incredibly dynamic and requires specialized knowledge that goes beyond our core business. Clients do not expect a bank to advise them on technical details, like replacing oil heating with a heat pump. We need to ensure we provide the right advice. While we excel in financing and related advice, for other areas, we need a partner with the credibility and expertise to assist our clients effectively. So, we considered it, but ultimately, partnership is the better approach here.

What learnings or advice can you share?

Ladina: I would say having an open exchange and establishing a common understanding of the target solution helps define the common goals. Clearly stating how each party can contribute to solving parts of the problem or the solution is crucial. Start small; it doesn't have to be a fully integrated solution at the beginning. Define what is really required initially and identify what can be added at a later stage.

Gian: My main advice would be to find an internal champion. The highest risk of a startup working with a corporate is having a counterparty that doesn’t understand the iterative way of working. They might not grasp what it’s like to be a startup, including how much time and effort it can take from the startup's side. For us, having UBS as one of our first clients is amazing. It’s incredibly valuable due to the reputation UBS has as a bank in Switzerland and its standing on sustainability topics.

As the partnership between UBS and NORM demonstrates, collaboration is key to accelerating the transition to sustainable buildings. By combining UBS’s financial expertise and NORM’s energy knowledge, homeowners can more easily navigate the complexities of retrofitting their properties, ultimately contributing to a greener future for Switzerland. This innovative approach shows how partnerships between startups and large corporates can yield impactful solutions that address critical environmental challenges.

With their joint efforts, UBS and NORM are not only driving change in the real estate sector but also setting an inspiring example of how collaboration can lead to more sustainable communities.

Together, we can achieve our vision of accelerating the transition to sustainable buildings faster.

This interview first appeared in the Tenity Climate Fintech Report 2024.