ISPT becomes Australia’s largest sustainability-linked loan issuer with CBA support

Commonwealth Bank recently served as lender and joint sustainability coordinator on a $495 million sustainability-linked loan (SLL) facility for the ISPT Retail Australia Property Trust (IRAPT), helping the fund progress towards overlaying sustainable finance across its financing requirements.

Sustainability-linked loans tie the cost of funding to achieving certain operational sustainability performance targets. IRAPT’s loan sets targets for improving the sustainability performance of the fund’s retail properties across four performance areas: greenhouse gas emissions intensity, water consumption, waste reduction and labour certification. The ISPT Retail Australia Property Trust manages a portfolio of 33 properties focused on neighbourhood and town centres, including Kellyville Village in Western Sydney and Camberwell Place, Victoria.

“We’re delighted to once again partner with ISPT as they transition to a more sustainable future,” said Andrew Hinchliff, Group Executive of Institutional Banking and Markets at Commonwealth Bank.

“Their dedication to continue aligning their portfolio with their sustainability strategy sets ISPT as a leader in their field and can serve as a roadmap for other organisations looking to progress their own transition journeys,” Mr Hinchliff said.

This is the second SLL for ISPT, and follows the ISPT Core Fund’s decision to roll all of its funding needs into a $2.8 billion SLL in May – the largest sustainability-linked loan issued in Australia to date. The combined issuance makes ISPT the largest sustainability-linked loan issuer in Australia.

 “Sustainability-linked loans connect operational targets and financial incentives, galvanising people right across the business around achieving a shared goal. This makes them such an important tool for supporting Australia’s transition efforts,” said Charles Davis, Managing Director, Sustainable Finance and ESG, at Commonwealth Bank.

“ISPT’s return to the sustainable finance market so soon after signing their inaugural sustainability-linked loan speaks to their commitment in advancing their sustainability strategy,” Mr Davis said.

Image: IRAPT-owned Lakelands is a sub-regional shopping centre 65 km south of Perth. The retail-focused fund signed a sustainability-linked loan with CBA.