Walker Corp, Pembroke and Charter Hall part of Westpac’s new $500 million climate bond

Three of Australia’s leading property owners now have buildings in the climate bond family thanks to Westpac’s first directly issued climate bond for A$500 million.

In late breaking news on Wednesday last week, Westpac Group said it had priced its first Climate Bond, raising A$500 million to fund renewable energy and low carbon commercial property in Australia.

There are five buildings involved in the deal. Two are under wraps but it’s known that the three are: the ATO building in Adelaide, owned by Charter Hall; 70 Eagle Street Brisbane (Central Plaza Three) owned by Pembroke Real Estate, which bought the property in 2013 and also owns 20 Martin Place in Sydney; and Walker Corporation’s 4B Trust building in Collins Street (part of the Collins Place project).

The Walker Corporation angle is interesting; it’s the second green/climate bond for the group.

In early 2015 the company’s Tower 4D in Collins Square was part of ANZ’s $600 million green bond issuance.

A statement received late on Wednesday last week said the funds would be used for seven wind energy facilities and five low carbon commercial properties, all certified under the Climate Bonds Standard (v1) with the buildings rated five stars or higher under the NABERS system.

The strong response to the Westpac Climate Bond today reflects the continuing growth we’re seeing in investors’ and customers’ appetite for products that have a positive impact on the economy and the environment.

Siobhan Toohill, head of sustainability, Westpac Group

Westpac Group head of sustainability Siobhan Toohill said growth in demand for climate bonds was strong globally.

“The strong response to the Westpac Climate Bond today reflects the continuing growth we’re seeing in investors’ and customers’ appetite for products that have a positive impact on the economy and the environment,” she said.

The Clean Energy Finance Corporation said it was a cornerstone investor, committing $90 million.

“The Australian market for certified climate bonds which include energy efficient buildings is in its infancy,” CEFC chief executive Oliver Yates said. “Our commitment to the Westpac Climate Bond reflects our strong focus on supporting investments which improve our cities and the built environment.”

Assurance for the bond is provided by EY through an “Independent Reasonable Assurance Report” that certifies the bond meets Climate Bonds Standards criteria developed by the Climate Bonds Initiative.

EY will also review compliance on a semi-annual basis.

A Westpac statement said total global climate bond issuance rose from about U$11 billion in 2013 to US$41 billion in 2015.

Last year Westpac Institutional Bank partnered with the World Bank for the first green bonds to be introduced to the Australian domestic market.

This story was published with permission from The Fifth Estate.

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