Adelaide Airport’s new loan from ANZ is linked to its sustainability performance

Adelaide Airport has secured a $50 million loan from ANZ, linked directly with the organisation’s environmental, social and governance performance.

• Adelaide Airport to undergo $165 million expansion

Adelaide Airport has secured a $50 million loan from ANZ, linked directly with the organisation’s environmental, social and governance performance.

The seven-year “Sustainability Performance Linked Loan” is structured as a revolving credit facility, with the interest rate determined in part by Adelaide Airport’s sustainability performance.

Adelaide Airport managing director Mark Young said the loan was the first of its kind to be issued in Australia, reflecting the company’s commitment to improving its sustainability practices.

“Creating an explicit link between our financing and long term sustainability credentials – including risk management, governance, our culture, the value we place upon our people and our relationships with our customers and stakeholders – is a key milestone for our business as we seek to further integrate sustainability within our day-to-day operations,” he said.

“The loan is structured as a revolving credit facility, with the sustainability performance component based on Sustainalytics’ ESG (Environmental, Social and Governance) Risk Ratings - an assessment of a company’s exposure to financially material ESG risks.

“The loan will help AAL continue to transition to a lower carbon and more sustainable economy by linking its borrowing rate to its sustainability performance.”

US research group Sustainalytics launched its ESG Risk Ratings tool in September, used to track how companies manage their ESG risks and the associated financial risks.

The Global Real Estate Sustainability Benchmark recently ranked Adelaide Airport as the world’s top performing airport in terms of ESG performance.

ANZ’s head of sustainable finance Katharine Tapley said the structure of the loan incentivised Adelaide Airport to further improve its sustainability performance against a set of ESG criteria.

“AAL’s strong commitment to continuously improving its sustainability performance makes it an ideal candidate for incentivised financing,” she said.

“We are pleased to have partnered with the AAL team, bringing to life this landmark transaction which supports the transition to a more sustainable economy.”

ANZ has a target to fund and facilitate at least $15 billion in low carbon and sustainable initiatives by 2020, including renewable energy generation, green buildings and less emissions intensive manufacturing and transport.