These loans are differentiated by how the proceeds are used. Green loans require borrowers to invest in ‘green’ assets such as green buildings, renewable energy or low carbon transport projects. Sustainability-linked loans can be used for general corporate purposes with pricing designed to incentivise improved sustainability performance – for example, reducing emissions and improving employee wellbeing.

In the past year, ANZ has arranged and funded the first ever sustainability linked loan in Australia for Adelaide Airport, and the first Climate Bonds Initiative certified green loan in Australia for Investa Commercial Property Fund.

We also acted as joint sustainability co-ordinator and bookrunner on a $1.4 billion sustainability-linked loan for Sydney Airport – the first syndicated facility of its kind in Australia as well as the largest in Asia Pacific and the airport sector to date. Pricing of the loan is attached to Sydney Airport’s ESG performance, as measured by an independent third party. Sustainability initiatives include investment in electric vehicles, an ambition to achieve carbon neutrality by 2025 and cutting carbon emissions per passenger by 50 percent from 2010 levels by 2025.

In a first for the New Zealand market, we also led the successful completion of a NZ$50 million sustainability-linked loan for dairy company Synlait Milk Ltd.

“Linking our financial arrangements to our ESG performance made perfect sense”, said Nigel Greenwood, Synlait Chief Financial Officer. “It reinforces to our shareholders and stakeholders that we are committed to continuously improving our performance and disclosure, and aligns with our company purpose.”

ANZ expects companies will become more receptive to these types of sustainable finance products as climate change and sustainable development move into the fore of their corporate strategies and risk assessment.

Images supplied by Synlait Milk Ltd