Green Loans Australia & New Zealand

This report covers the labelled green corporate loan market in Australia and New Zealand. It explores what has happened so far, best practice in labelling a green loan, and what should be done to channel loan markets for climate change investment.

To date there have been fourteen (14) labelled green corporate loans in Australia, from nine borrowers, and two green loans from borrowers in New Zealand. Of the combined total ten are Certified under the Climate Bonds Standard indicating a high level of commitment to international best practice.

Additionally, Climate Bonds Initiative provides commentary on sustainability-linked loans and green consumer loans. Australia and New Zealand require significant investments in green infrastructure and assets to transition to a low carbon economy in line with their international commitments. 

The report finds that both nations countries are endowed with favourable factors to significantly grow a climate/green labelled loan market:

• Corporate loan and residential mortgage markets are dominant forms of funding, much larger than corporate bond markets;
• Financial markets are highly sophisticated;
• The corporate sector is actively engaged in climate change and transitioning to a net zero emissions economy;
• Developed and diversified green and sustainable finance sectors; and
• Strongly growing ESG agenda among local asset owners, asset managers, and banks.

Additionally, New Zealand’s central government is pushing forward aggressively on decarbonising its economy.