Australian Stockyard Obtains First Agricultural Sustainability-Linked Loan

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  • Australian Stockyard Obtains First Agricultural Sustainability-Linked Loan

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    Australian beef producer Stockyard Group secured a three-year sustainability-linked loan (SLL) from Commonwealth Bank, according to the bank’s press release on July 22. This is the first SLL issued in the Australian agriculture industry, while the two parties did not disclose the lending amount. As a part of the SLL, Commonwealth Bank set targets for Stockyard, requiring the beef producer to outperform its existing baselines for ESG related outcomes. The targets include cutting both direct and indirect greenhouse gas (GHG) emissions, improving the health and safety of the working environment, and contributing to animal welfare. Once Stockyard Group achieves the three performance targets, it will get a discount on the loan interest rate, otherwise a higher interest rate.

    This move is in line with the Australian Beef Sustainability Framework and the Carbon Neutral 2030 strategy of Australia’s beef industry. Prior to this, many banks in the country started their green loan projects in recent years and have released a lot of loans in the past few months. National Australia Bank (NAB) lent Port of Newcastle, the largest east coast seaport in Australia, a green loan of USD399m with five sustainability linked requirements as a return for a low interest rate in May 2021. The requirements include reducing annual emissions to below the 2°C temperature scenario before 2025, checking the slavery risks of suppliers, providing new intern projects, offering mental health aids in departments, and showing sustainability outcomes. Another recent case is that on July 15, over 18 banks together offered Royal Adelaide Hospital a sustainability loan, amounting to USD1.62bn, as the biggest green loan in the health industry globally.

    Sources:

    https://www.commbank.com.au/articles/newsroom/2021/07/sustainability-linked-loan-for-agriculture.html

    https://www.fssustainability.com.au/agriculture-business-signs-first-sustainability-linked-loan

    https://www.offshore-energy.biz/port-of-newcastle-becomes-1st-australian-port-to-obtain-sustainability-linked-financing/

    https://www.hospitalmanagement.net/news/royal-adelaide-hospital/

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