Asset manager Aviva Investors will hand out £1bn of climate transition loans into real estate over the next four years – with incentives attached to encourage borrowers to reduce carbon emissions from buildings.

The 8 December move comes as investor’s interest in environmental, social and corporate governance – or ESG – investing has soared. As calls intensify for the post-Covid-19 pandemic recovery to be “green”, the financial sector is facing increased scrutiny from regulators on their ESG credentials.