Sustainable finance framework

19 October 2022

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Frasers Property Australia takes a holistic view of sustainability, from the built environments we create, the communities we foster, and in the way we finance our activities, including the loans we secure.

As at May 2022, Frasers Property in Australia has 86% of its corporate funding secured in the form of sustainability linked sources.

Our Sustainable Finance Framework defines the criteria for how we utilise the green funds we raise. It reinforces how important our sustainable approach is to us as a business, it drives our strategy, and it serves as a key metric in how we evaluate our performance.

The Framework was the first to define an entire portfolio as sustainable assets using the GRESB ratings and the first of its kind for sustainable bonds and loans in Asia Pacific from a real estate company.

The Framework has four core elements:

  1. Use of Proceeds;
  2. Process for Project Evaluation and Selection;
  3. Management of Proceeds; and
  4. Reporting.

In addition to the reporting as stipulated in the Framework, Frasers Property is committed to continuing its disclosure on sustainability targets and providing regular updates.

Frasers Property Australia aims to achieve a 5-Star rating for its new developments and at least a 4-Star rating for its existing portfolio based on GRESB. Maintaining these Green Star targets contributes to Frasers Property Australia’s GRESB score, and a strong, independent GRESB rating has been our commitment as a part of this Framework, ultimately helping us to secure green finance.

Sustainability-linked loans typically have a more competitive interest rate attached which is subject to achieving stated sustainability standards. This ensures that the finance provided is being used for projects and business models which deliver better sustainability outcomes.

This can help to reduce costs associated with our development activities, which in turn benefits our customers, and it also ensures we remain accountable to deliver the sustainability outcomes we promise our customers.

There is no single initiative or solution to reducing our carbon footprint. At Frasers Property reducing our carbon footprint is a philosophy/goal integrated in our culture. It is at the core of how we operate and finance our business to how we plan and deliver our projects.

Lessons learnt

Green finance galvanises development teams around sustainability goals and makes them understand the value that sustainability is starting to unlock.

The appetite for green loans is growing as more lenders align themselves with companies focused on sustainable business models, practices, projects and outcomes.

Whereas previously, sustainability was ‘the right thing to do’, now there are commercial benefits to complement the environmental ones. As a business approach, sustainability is unlocking additional value because it’s providing cheaper capital.

Green finance focuses a team on achieving sustainability outcomes. It keeps people engaged on a project because it provides an incentive to maintain Green Star targets, GRESB scores and other sustainability targets.

The Sustainable Finance Framework is a key strategy to help future-proof the business and means it is well placed to navigate and continue to prosper in a more sustainability-aware future operating environment.

Project partners

The Sustainable Finance Framework provides the platform for Frasers Property to attract and work with other like-minded organisations wanting to be involved in projects and practices that will generate better, more sustainable outcomes for the long term.

It covers both Frasers Property Australia and Frasers Property Industrial Australia.

To date we have joined with a number of key project partners in pursuing our green and sustainable financing objectives. These institutions have served as Mandated Lead Arrangers, Underwriters and Bookrunners and/or Sustainability Coordinators and have included Barclays Bank PLC (and Barclays Capital Asia Limited); Mizuho Bank Ltd; United Overseas Bank Limited; Australia and New Zealand Banking Group Limited; and Oversea-Chinese Banking Corporation Limited.