Banking Group Helps Wellington Airport Achieve SLLs
Wellington Airport has transformed $100 million of existing bank credit lines into sustainability-linked loans (SLLs), offering direct monetary rewards by linking reduced interest rates with the achievement of agreed-upon sustainability objectives.
Wellington Airport Chief Financial Officer Martin Harrington said, "This initiative reinforces our sustainability pledge." Harrington added that Wellington Airport had already established Kaitiakitanga sustainability objectives, and this programme strengthened their commitment to achieving them. Meeting these ambitious objectives, he claims, would benefit both the planet and the company's bottom line.
By transitioning to sustainability-linked lending, Wellington Airport will incur lower interest and line fees for meeting its sustainability targets but face higher rates if it fails to achieve them.
Wellington Airport's complete banking consortium, including ANZ, BNZ, MUFG, and China Construction Bank, executed the SLLs, with ANZ as the Sustainability Coordinator.
Kate Gunthorp, Director in ANZ's Sustainable Finance team, stated, "We are thrilled to have served as the Sustainability Coordinator for Wellington Airport's market-leading initiative." Gunthorp added, "Over the next several years, decarbonising the aviation industry will pose a significant challenge, and these SLLs have objectives that are directly connected to supporting and facilitating low-emission aircraft in Aotearoa."
Martin Harrington added, "With the assistance of our banking group, Wellington Airport has established sustainability-linked lending programmes that are tailored to our industry's sustainability challenges and possibilities and consistent with global best practices."
Wellington Airport has identified four primary sustainability areas it aims to target, including:
Tackling the airport's greenhouse gas emissions resulting from its direct operations (scope 1 and 2). To achieve this, the airport plans to validate its reduction targets through the Science Based Target Initiative (SBTi) and publicly report its scope 3 emissions.
Supporting and promoting the use of low-emission commercial flights at Wellington Airport, including electric, hybrid, and/or sustainable aviation-fueled aircraft.
Advancing through the Airport Carbon Accreditation programme, which conducts independent assessments of airports worldwide.
Reducing the amount of waste generated by Wellington Airport that ends up in landfills.
Ernst & Young has externally reviewed Wellington Airport's sustainability targets, which align with the Sustainability-Linked Loan Principles of the Asia Pacific Loan Market Association (updated as of February 2023). Additionally, an independent verification process will be conducted to assess Wellington Airport's progress in meeting its sustainability targets.
In addition to the sustainability targets, Wellington Airport has made significant progress towards achieving its sustainability goals. These include:
Obtaining Level 2 (Reduction) Certification from the Airport Carbon Accreditation programme in December 2022.
Improving the energy efficiency of its buildings and infrastructure.
Replacing one-third of its vehicle fleet with electric vehicles.
Collaborating with electric aircraft manufacturer Heart Aerospace, alongside other New Zealand airports and airlines, to accelerate the decarbonisation of aviation.
Furthermore, in October 2022, Wellington Airport received a high score from GRESB and was rated as the third-best participating airport in the world for its environmental, social, and governance (ESG) efforts and management.
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Source: Wellington Airport