- CMW will transition the $130M loan on the Cromwell Riverpark Trust to a green loan certified by the Climate Bonds Initiative.
- Young said the move requires transformative steps, not incremental improvements.
- Only the top 15% most emissions efficient buildings in a city can qualify for certified green loans.
Cromwell Property Group (ASX: CMW) has announced it will transition to its first ever green loan this month, as part of Cromwell’s new Sustainable Finance Framework.
The framework was developed in consultation with the Commonwealth Bank of Australia (CBA) and French-based multinational financial services company, Societe Generale.
The first move CMW will make is to transition the existing $130 million bilateral loan with CBA on the Cromwell Riverpark Trust to a green loan certified by the Climate Bonds Initiative.
The debt facility for the Cromwell Riverpark Trust has been extended for a further two years, with all other terms remaining the same.
Cromwell’s Head of ESG Lara Young said a huge team effort had been put into establishing the framework and securing this type of loan for the Cromwell Riverpark Trust, which is underpinned by Brisbane’s Energex House.
“The Climate Bonds Low Carbon Buildings Criteria was designed with an ambition of a zero-carbon future in 2050,” said Young.
“Obtaining this type of loan requires issuers, like Cromwell, to embed transformative steps, not incremental improvements, for rapid decarbonisation.”
Lara Young, Cromwell head of ESG
“Only the top 15% most emissions efficient buildings in a city can qualify for green loans certified by the Climate Bonds Initiative.
“Energex House is an industry leading Green Star 6 star, and 6-star NABERS Energy rated, building. By extending the term of the facility for a further two years under a green loan, we will continue to improve its sustainability performance.”
Young added the framework sets up Cromwell’s borrowing practices for success through the use of sustainable debt instruments, including green bonds and loans – as well as sustainability linked bonds and loans.
“Cromwell’s Sustainable Finance Framework will support the Group’s commitment to fund low-carbon, efficient and resilient buildings that meet our ESG ambitions,” said Young.
“By leveraging green or sustainability linked debt, Cromwell Property Group can move significantly closer to meeting our current and future ESG responsibilities, including a Cromwell portfolio Net Zero Scope 1 and 2 target for 2035.”
Sustainable finance is a rapidly growing market, according to CBA general manager corporate finance and ESG, Jane Thomson, who noted that the bank has partnered with many high-profile clients through their first sustainable finance transactions.
“One of our priorities is to play a leading role in supporting Australia’s transition to a modern, resilient, and sustainable economy, and key to that is supporting high quality green buildings in the commercial property sector,” said Thomson.
“There are enormous benefits for an organisation in accessing the vibrant sustainable finance markets and we are pleased to have supported Cromwell’s inaugural green loan under the new framework for the Energex House asset.”
Tessa Dann, Head of Sustainable Finance for Australia & New Zealand at Societe Generale, said, “As a global bank with a strong focus on supporting the transition to a more sustainable economy, we are pleased to have worked as a sustainability coordinator for Cromwell Property Group to develop a Sustainable Finance Framework with a global perspective that reflects Cromwell’s presence across 14 countries.”
“During the development phase, the sustainability coordinators undertook a review of market practices across jurisdictions. The process also required collaboration between offshore and domestic stakeholders within Cromwell.
“The Sustainable Finance Framework adds another dimension to Cromwell’s sustainability strategy by enabling all Cromwell funds and related entities to utilise the Framework by aligning debt funding needs with sustainability outcomes.”
