Green finance, green bonds, sustainable finance, sustainability-linked loans – it's a hot area of financial lending! And it's one with the potential for positive impacts around the world. ‘Sustainable finance’ refers to things like loans that encourage organisations to adopt sustainable practices, both environmental and social. Find out how green and sustainable finance can help your business work towards its sustainability goals.
This webinar discussed our work with Sudima Hotels (Hind Management). We provided a second-party opinion for Sudima Hotel's sustainability-linked loan which includes ambitious targets for social, cultural and environmental performance.
Kanika Jhunjhnuwala, the Executive Director, Sustainability and Environment at Hind Management joined Martin Fryer, thinkstep-anz’s Head of Strategy & Impact New Zealand.
Here's a preview of the webinar
Main webinar takeaways
Sudima received a sustainability-linked loan (SLL) from the Bank of New Zealand.
You need to be ambitious and already making progress
The borrower and lender together decide which areas of the borrower’s sustainability performance the finance will focus on. The borrower and lender then set baselines and Sustainability Performance Targets (SPTs) to track performance over the course of the finance. These targets need to be ambitious and comparable to international, national or industry best practice. Borrowers also need to be performing well sustainably to apply for finance.
Green finance can support improvements in many areas
For Sudima, the SPTs of their loan relate to:
- reducing carbon emissions in their portfolio
- improving the refrigerants used in their hotels
- improvements in accessibility to be best in market
- increasing cultural competency, and
- improvements in responsible procurement.
You’ll need a second opinion
As part of the finance, borrowers need a Second Party Opinion (SPO) report. thinkstep-anz can provide this, or an institution with ESG expertise that is independent from the borrower. The opinion
- confirms that the business strategy and governance support management to meet the intended outcomes of the finance
- checks that targets are appropriate and ambitious, and
- checks that measurement will support the transparent review and reporting of performance.
Sudima would do this again
Kanika confirmed that yes, Sudima would be open to future SLLs. They found the process helpful and that it showed them sustainability’s ‘big picture’. It also helped them develop and reframe their thinking, especially around what is measurable and how to best compile data.
We supported Sudima’s intentions
Martin worked on the SPO and particularly liked that the SLL:
- was clearly connected to the overall sustainability strategy of Sudima Hotels
- had ambitious targets and timeframes, both for carbon emissions plus social and cultural performance
- Included third-party verification, such as Toitū carbon certification and Accessibility Tick compliance.