InDome Capital: ESG ‘serious risk management’ tool in property credit
ESG should be used as a serious risk management framework in property credit, according to Herman Abel, founder and managing partner at private equity fund InDome Capital.
Historically viewed as a ‘soft signal’ in finance, ESG has been dismissed in some quarters as a marketing tool rather than a strategic lever. While Europe forges ahead with ESG investing rules, recently the U.S. is more often rolling them back.
But Abel, whose PE fund provides credit to property development and real estate projects across the UK, said ESG considerations are increasingly fundamental in property credit.
“In property credit, ESG has now matured into a serious risk management framework,” he said.
“At InDome Capital, we treat it as a lens through which project viability is scrutinised, not because it’s fashionable, but because it’s financially prudent.”
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Investments focused on environmental, social and governance (ESG) factors tend to favour companies or projects that score highly on certain criteria, such as climate change or corporate transparency.
Abel gave the example of energy efficiency in property, which he argued has a direct impact on asset value.
“High EPC ratings, solar integration, and sustainable heating systems like air-source heat pumps aren’t just green extras – they future-proof developments against regulatory tightening and shifting buyer preferences.
“Projects that fail to address these standards risk becoming obsolete or unfinanceable within a few years,” he said.
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InDome applies ESG filters to every credit structure: ESG-linked reporting, cost monitoring, and developer accountability through personal guarantees.
“These aren’t burdens; they’re risk control tools,” said Abel. “Ultimately, ESG today is less about ideology and more about intelligent underwriting.”
Projects that incorporate ESG from day one tend to outperform, he added.
“They exit faster, sell better, and deliver fewer nasty surprises. In 2025, any lender that fails to account for ESG isn’t just missing a trend, they’re missing red flags.”
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