First in market
ANZ set market precedent when it arranged and funded the first labelled Green Loan in Australia for Investa Commercial Property Fund (ICPF) in January, as well as the first ever Sustainability Performance Linked (SPL) loan in Australia for Adelaide Airport last December 2018.
The $A170 million Green Loan for ICPF is linked to the fund’s property portfolio of low-carbon-emitting buildings. The company developed a green debt framework and measured its portfolio of 15 buildings against the CBI’s Low Carbon Building Criteria carbon emission thresholds which require the portfolio to perform in the top 15 per cent in their relative city in terms of carbon intensity.
The Green Loan allows Investa to meet demands from investors concerned about climate change and show its leadership position in corporate sustainability by linking its debt funding with an emissions intensity standard.
The $A50 million seven-year SPL loan with Adelaide Airport incentivises the borrower to improve its performance against a set of environmental, social and governance targets set by third party sustainability consultant, Sustainalytics. The company gets a pricing benefit if it meets these agreed targets over time.
Adelaide Airport already has strong sustainability credentials - it was recently the top ranked airport in the world for the second year running in the 2018 Global Real Estate Sustainability Benchmark.
The loan further demonstrates its commitment to improving its sustainability performance.
The key difference between a Green and SPL Loan is how proceeds are used. Green Loans – like Green Bonds – suit borrowers who have a definitive asset base that qualifies as ‘green’, such as renewable energy, low carbon transport projects or energy efficiency expenditures.