Cromwell links new loan facility to emissions reduction, gender pay gap targets - Cromwell Property Group
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Cromwell links new loan facility to emissions reduction, gender pay gap targets

Home Cromwell links new loan facility to emissions reduction, gender pay gap targets


Real estate investor and fund manager Cromwell Property Group (ASX:CMW) (Cromwell) has completed the conversion of a multi-bank, $1.2 billion lending facility to a sustainability linked loan that includes ambitious targets in reducing emissions and its gender pay gap.

Central to the new loan structure is:

  • Greenhouse gas reductions, in line with Cromwell’s target for net zero scope 3 emissions by 2045, to reinforce Cromwell’s position as an industry leader in reducing scope 3 emissions.
  • Additional targets linked to Cromwell’s target of net zero scope 1 and 2 emissions by 2035.
  • To reduce Cromwell’s gender pay gap to a maximum of 12% by 2028.

Cromwell’s Group Head of ESG, Lara Young, confirmed the new loan was developed with the Commonwealth Bank of Australia (CBA) and multinational financial services company Societe Generale acting as sustainability coordinators.

Ms. Young said that the new sustainability linked loan has created an opportunity to highlight the business’s focus on several critical topics, as part of its broader environmental, sustainability, and governance policy.

“As part of our ESG report release in January, Cromwell announced our full scope 3 emissions inventory for the first time, becoming one of the few Australian commercial property organisations to publish an emissions footprint across 100% of our global network and supply chain,” said Ms. Young.

“Building on that announcement, we have been working with tenants and suppliers across all our upstream and downstream business activities – covering our entire supply chain of tenant activities; funds under management; joint ventures; and embodied carbon sources –  to stretch our net zero approach beyond our operational control.

“The progression we have made in this space has allowed us to set our most ambitious target to date, as part of this new sustainability linked loan – to reduce scope 3 greenhouse gas emissions intensity to equal, or less than, 30.16 (kgCO2e/m2) by 2028.

“This is equal to eliminating more than 4.4 million kilograms of carbon dioxide equivalent (KgCO2e) – or emissions from 784 households – by 2028, against the 2023 baseline.”

Cromwell aims to achieve this goal through a multi-purpose approach, including encouraging tenants to switch to renewable electricity, and providing tenant support through waste stream signage and education – in order to reduce their landfill waste and contamination.

“Importantly, by leveraging sustainability linked debt at the same time as meeting important social milestones, Cromwell Property Group can move significantly closer to meeting our current and future ESG responsibilities, including a Cromwell portfolio Net Zero Scope 1 and 2 target by 2035,” said Ms. Young.

In addition to emissions reductions targets, Cromwell seeks to reduce its gender pay gap to a maximum of 12% by 2028. This target forms part of Cromwell’s broader diversity commitments, which include maintaining pay parity across all roles, and maintaining 40:40:20 gender targets across all leadership levels within the organisation.

The loan is aligned with both the Asia Pacific Loan Market Association (APLMA) Green Loan Principles, as well as the APLMA Sustainability Linked Loan Principles.

CBA General Manager Major Client Group, Jon Coombes, said: “we’re really proud to support Cromwell Property Group on its sustainability journey and commitment to high-quality, energy efficient buildings that will continue to benefit Australians for years to come.”

“The portfolio of assets already met the high standards for a green loan, yet Cromwell’s desire to set even more ambitious environmental targets within the loan structure demonstrates their leadership, and recognises that the journey to net-zero is a continuous one.

“This innovative green sustainability linked loan is a great example of making ambitious commitments towards to a more sustainable future and an example of how sustainable finance products can be used to not only support, but drive sustainable outcomes.”

Tessa Dann, Head of Sustainable Finance for Australia and New Zealand at Societe Generale commented that: “Societe Generale is proud to have supported Cromwell in this innovative transaction, combining green loan and sustainability linked loan requirements. Such transactions are rare in the sustainable finance market, but a natural fit for Cromwell to showcase their ESG ambitions”

“Acting as sustainability coordinator demonstrates Societe Generale’s longstanding commitment to supporting the green transition, in this instance in the commercial real estate sector. We believe this serves as an excellent example to encourage more action on the reduction of scope 3 emissions in particular.”