ABC launches ESG term deposits in international currencies as inflows top A$1.5tn

Andrew Hinchliff, the ABC’s group director, Institutional Banking and Markets, said TD ESG was another source of funding for Australia’s transition to a more sustainable economy.

“Access to institutional capital is essential for Australia’s transition to a more sustainable future and we are proud that our innovative sustainable finance products are helping to connect pools of capital to support the work of organizations transforming their operations to be more sustainable,” Hinchliff said. .

“Outstanding entries for our TD ESG product in just six months demonstrate the strong appetite of our customers to support Australia’s sustainability journey. This has created a significant new source of funding for our SLL portfolio, expanding our ability to fund new opportunities for our clients. »

Like a traditional term deposit, TD ESGs offer depositors a fixed rate of return but with a commitment from the CBA to exclusively allocate the proceeds of these deposits to the bank’s growing portfolio of SLLs. SLLs set sustainability performance targets – such as reducing greenhouse gas emissions or increasing indigenous employment – ​​and incentivize borrowers to meet these targets throughout the life of the loan through financial incentives and/or penalties.

CBA’s ESG TDs are certified by the Responsible Investment Association Australasia. Since launch, CBA has transacted with a wide range of wholesale clients including local councils, super funds, investment managers and corporates.

Chris McLachlan, CBA’s Executive Managing Director, Global Markets, said: “This new FX capability broadens the appeal of our TD ESGs to international clients managing multi-currency portfolios. We are committed to continuing to innovate in sustainable finance and to play a leading role in financing Australia’s transition to a low-carbon economy.

Anthony Kritikides, managing director of institutional sales at CBA, said the success of the ESG term deposit was due to organic growth. “We have had strong client engagement on this product across a wide range of market players, from super funds, asset managers and local councils to, more recently, corporate clients looking for meaningful ESG cash management,” Mr. Kritikdes said. “We are proud to offer another avenue for customers to support Australia’s transition.”

CBA also recently backed Treasury Wine Estates (TWE) with the bank’s first sustainability-linked derivative, an AUD/USD currency swap. The derivative hedges balance sheet exposures while further incentivizing TWE to achieve its ambitious sustainability goals by linking the coupon rate to their achievement. The SLD’s goals cover areas important to TWE, including water management, use of renewable electricity, representation of women in leadership positions and across the business, and carbon emissions. greenhouse gas.

The transaction is the latest example of CBA’s support for our clients in their transition efforts, as well as our commitment to leadership and innovation in the field of sustainable finance, said Hope Gatis, Managing Director of CBA , Client Risk Solutions. with their ambitions for sustainable development. This extends what we do in the area of ​​sustainable finance to include risk management, in addition to financing,” she said.


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