Westpac partners with LGS on first green loan in superannuation

Westpac Institutional Bank is today proud to announce Australia’s first green loan developed for the superannuation sector, specifically for Local Government Property Fund (LGPF), managed by Local Government Super (LGS).

Westpac worked closely with LGS to structure the $65 million green loan by determining which of the buildings in the LGPF meet international standards for green buildings set by the Climate Bond Institute (CBI).

LGPF is one of the most sustainable property portfolios in Australia, and LGS is committed to responsible management practices that minimise the environmental impact of the properties in their portfolio.

“In 2017, our property portfolio was the first in Australia to receive a 5-Star Green Star Performance rating from the Green Building Council of Australia, and last year we were the first property portfolio to achieve carbon neutral certification under the Australian government’s Climate Active program for all of our NABERS rated buildings”, said Scott Armstrong, Head of Property at LGS.

LGS prepared a Green Financing Framework aligning to the Green Bond Principles and Climate Bonds Standard, with Westpac assisting as the Green Structuring Advisor.

LGS also sought verification from DNV, with the CBI providing certification that this loan meets the Climate Bonds Standard.

“We’re proud to partner with our long-standing customer, LGS to help them extend their sustainability leadership into the area of responsible finance”, said Chris Cahill, Head of Real Estate NSW and ACT at Westpac.

“We are seeing the wider market becoming increasingly focussed on ‘green’ targets and ESG generally, and it is great to be able to offer a product that assists our customers with that objective.”

The recent report ‘Financing sustainability: Asia Pacific embraces the ESG challenge’ by The Economist Intelligence Unit, sponsored by Westpac, shows the drivers and constraints to sustainable finance growth.

“In the report it’s clear that investors have considerable interest in sustainable finance instruments. Green loans make up 27% of sustainable products invested in with that set to grow to 35% within three years”, said Eliza Mathews, Director, Sustainable Finance at Westpac.

“Green loans are still relatively new to Australia with LGS’s Local Government Property Fund being just the fifth Australian entity to borrow under a green loan.”

LGS is committed to ethical and sustainable investment and is one of the very few to be certified as a ‘whole of fund’ responsible super fund by the Responsible Investment Association of Australasia.

“The aim of our responsible investment strategy is to provide our members with long-term sustainable returns on their super while minimising the impact on our community and our environment”, said Moya Yip, Head of Responsible Investment at LGS.

Westpac is the largest lender of greenfield renewable energy in Australia, supporting corporate and institutional customers to achieve their pathway towards a net-zero emissions economy.

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