Westpac prices Euro Climate Bond
26 November, 2017
Westpac Group has settled a EUR 500 million, 7 year climate bond to support the bank’s funding for climate change solutions.
This deal is the third climate bond issued by Westpac and contributes to the bank’s target to facilitate up to AUD3 billion of green bond issuance and arrangement by 20201. The bank’s first climate bond was issued in May 2016 into the Australian domestic market2.
The World Bank issued the first kangaroo green bond in the Australian market in April 2014, a $300 million five-year deal managed by Westpac3.
According to Richard Salmon, Westpac’s Director of Balance Sheet Funding, Treasury, this deal reflects Westpac’s commitment to support the climate bond market both here in Australia and offshore.
“We issued our first climate bond in 2016 into our domestic market, which is relatively small, although developing quickly,” Mr Salmon said.
“This time we focused on Europe’s more mature Socially Responsible Investment market where there is a larger pool of investors. We found these investors were very active and receptive to Westpac’s excellent sustainability credentials.”
“Access to this market is a great opportunity for the Bank. It offers relative value against other currencies and tenors and adds diversity for our current funding requirements,” he said.
Like most green or climate bonds issued to date, Westpac’s climate bond is a ‘use-of-proceeds’ bond. This means Westpac commits to use the proceeds to finance or re-finance sustainable projects. For this bond, proceeds will be used to fund renewable energy projects, low carbon commercial property and rail transport.
“As a bank, our role is to act as an intermediary and help fund these projects through balance sheet lending and by issuing bond instruments to investors in the growing Socially Responsible Investment (SRI) market as part of our regular funding requirements,” Mr Salmon said.
External auditors provided an Independent Reasonable Assurance Report certifying the Westpac Climate Bond as meeting the criteria of the Climate Bonds Standards (v2.1) of the Climate Bonds Initiative (CBI). In addition, Westpac will ensure compliance with the Climate Bonds Standards until the bond's maturity.
About Westpac’s sustainability leadership:
Westpac has had a long running commitment to support climate-conscious customers to help Australia transition to a net zero carbon emissions economy, with a strong track record of lending to renewable energy and energy efficiency projects.
The bank’s leading sustainability performance, including climate change strategy, was internationally recognised in September 2017 with Westpac being named as the world’s most sustainable bank for the tenth time in the last 16 years by the Dow Jones Sustainability Index.
The world’s first Climate Awareness Bond was issued by the European Investment Bank (EIB) in 20074. The first in the Australian market was a $300 million five-year issue from the World Bank in April 2014, managed by Westpac5. The exponential growth of the Green Bond market has continued with over USD 103bn issued so far in 20176.
1.Climate Change Position Statement and 2020 Action Plan - Westpac
2.Westpac Prices its first Climate Bond
3.World Bank Launches First Kangaroo Green Bond - World Bank Group
5.World Bank Launches First Kangaroo Green Bond - World Bank Group