Bayside Mayor Dr Christina Curry used a Mayoral Minute to report that Bayside Council has placed $9.65m in a 12-month Commonwealth Bank Australia (CBA) – Green Term Deposit.
“I’m pleased to announce that Council has invested in its first Green Term Deposit,” Mayor Dr Christina Curry said.
“Environmental, Social and Governance Term Deposits are a new product offered by CBA to help businesses transition to a low carbon future.”
Bayside Council invested the Barton Park TCorp loan proceeds of $9.65M in an Environmental, Social and Governance Term (Green) Deposit (ESGTD) at the rate of 4.06% for 12 months on Thursday 14 July 2022.
ESGTDs are certified by the Responsible Investment Association Australasia (RIAA) to have met the Australian and New Zealand Standards for responsible investing.
Proceeds from ESGTDs are allocated towards Sustainability-Linked Loans, where the borrowers are incentivised to achieve against pre-determined sustainability performance objectives i.e. the interest rates may be reduced where the borrower satisfies performance objectives or increased where the borrower fails to meet these objectives.
Sustainability performance targets are measurable improvements in KPI’s which can fall into the following categories:
- Environmental (Energy efficiency, greenhouse gasses, waste disposal)
- Social (Affordable housing, Employee health and safety)
- Governance (Business ethics and conduct)
Borrowers are required to provide CBA at least annually with up-to-date information sufficient to allow them to monitor the performance against the KPI.
The information provided needs to be verified independently and externally through the use of auditors, environmental consultants and relevant experts.