As part of our commitment to fund and facilitate at least $10b in sustainable finance, we are working with businesses to finance their sustainability ambitions.1
Through these structures, we are supporting our customers to address and improve key sustainability considerations including greenhouse gas emissions, renewable energy generation, supply chain traceability, education, construction waste, dementia care, health and safety, mental wellbeing, on-farm sustainability, employment opportunities for youth, the gender pay gap and women in leadership.
In order to direct more lending to sustainable assets and activities, we provide Green and Social Loans to businesses. This includes loans to a range of businesses to enable them to progress their climate change strategies such as the landmark certified $350m Green Loan for KiwiRail to finance its purchase of two new Interislander ferries, which has become the first shipping loan in the world to be certified by the Climate Bond Initiative. We also focus on accelerating social outcomes, and recently signed Australasia’s first Social Loan for Te Pūkenga to offer better learning and employment opportunities to thousands of New Zealanders.
Another kind of sustainable finance is Sustainability-Linked Loans which incentivise businesses to improve their sustainability performance against material environmental or social targets. In 2021, we were the Sole Sustainable Finance Coordinator for a range of market-leading and innovative Sustainability-Linked Loans, including:
Genesis Energy’s Sustainability-Linked Loan: the largest emission reduction target in any Sustainability-Linked Loan in New Zealand and the first with targets relating to renewable energy generation and preparing young people for the future of work. Genesis Energy was the first company in Aotearoa and only the fifth in the world to have their sustainable finance structure verified as aligning to new global climate transition finance guidance.
The Warehouse Group’s Sustainability-Linked Loan: the first such loan in New Zealand to address sustainable packaging and gender targets.
We also participated in Summerset’s Sustainability-Linked Loan that addresses the quality of aged care, reduction in greenhouse gas emissions and construction waste.
1This target comprises (a) $5b for lending to climate change solutions, $700m lending for healthy, affordable and social housing, as well as other environmental, social, and sustainability-linked lending (building on FY20 exposure), and (b) facilitation of sustainable bonds from 1 Oct 2021 to 30 Sept 2025. All lending will meet the eligibility criteria set out in international sustainable finance principles. Our targets are a total commitment, measuring the cumulative flow of capital to support New Zealand becoming a net-zero emissions economy.