Commonwealth Bank of Australia is launching a new discounted loan for businesses to finance initiatives which can reduce greenhouse gas emissions and bolster their climate change resilience.
The new greenhouse-friendly finance product complements a similar Agri Green Loan released 18 months ago offering discount finance to farmers implementing sustainability initiatives on their land.
CBA's Business Green Loan - at a variable rate below the bank's mainstream business lending interest cost - was developed for commercial businesses seeking competitive funding for sustainability initiatives such as renewable energy projects, energy efficient building upgrades, and pollution reduction initiatives.
Some of the investment categories qualifying for the new loan deal may overlap with agricultural land use initiatives.
Eligible assets and projects which could potentially be covered by the green loan could include:
- renewable energy investments such as solar, wind, hydropower and batteries;
- energy efficient assets such as efficient motors, lighting, heating and cooling;
- energy efficient building upgrades;
- recycling, refurbishment, composting projects, and
- water efficiency and pollution prevention initiatives
Like the Agri Green Loan, the new business product is currently priced at a variable rate of 6.49 per cent, but only available to mid- and large-sized corporate business customers working with a relationship manager.
Speaking at the bank's 'Momentum' sustainability conference this week former agribusiness boss, now business lending executive general manager, Grant Cairns, said there had been a big shift in the types of conversations CBA was having with its business customers, from small businesses to its largest corporate clients.
"Customers recognise the opportunity to implement sustainable practices that not only advance their environmental goals, but also lower operating costs," Mr Cairns said.
"We have a track record of delivering market-first sustainable finance solutions and tools to support our customers to implement sustainability initiatives.
"CBA was the first Australian bank to offer an Agri Green Loan, and more recently, we launched our Green Buildings Tool to help commercial property owners identify and implement investments that uplift the sustainability of their building operations.
"We have an important role to play in financing the nation's transition - we're committed to supporting initiatives and assets that help drive a more sustainable future."
The bank wanted to provide an end-to-end offering to help customers progress their net zero transition.
As an example, commercial property borrowers could identify energy efficiency upgrades through the bank's Green Buildings Tool, and then finance these upgrades through the new green loan.
The business loan complemented existing solutions to help businesses to achieve their sustainability goals, including green vehicle and equipment finance offerings, sustainable finance solutions and the Agri Green Loan.
Mr Cairns said CBA's commitment to customers with sustainability transition agendas was reflected in the bank's 2030 Sustainability Funding Target which aimed to deliver $70 billion in cumulative funding across a range of sustainable industries and assets.
Renewable energy and energy efficiency projects, low carbon transport, commercial property, land and agriculture, waste management and sustainability-linked lending packages were among the bank's target lending project goals.
Andrew Marshall
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
Andrew Marshall is the group agribusiness writer for ACM's state agricultural weeklies and websites. He is a former editor at The Land and has worked in various Rural Press group roles in Canberra, North Richmond (NSW) and Toowoomba (Qld).
