Oceania Innovates With The Implementation Of A $500m Sustainability-Linked Loan

Oceania has implemented a $500 million five-year debt-facility, its first sustainability-linked loan. This means that over two thirds of Oceania’s debt-funding is now tied to ambitious environmental and social sustainability goals.

The funding will go towards delivering Oceania’s business growth strategy, enabling Oceania to accelerate its development pipeline and grow the business through organic and inorganic opportunities, at the same time as enhancing the resident experience and building its people capability.

Oceania’s business strategy is underpinned by a commitment to sustainability, using measures and goals to benchmark environmental, social and governance (ESG) aspects. The five-year loan will commit Oceania to certain year-on-year targets to qualify for the loan interest discount, and penalty interest can be incurred if targets are not met.

Key Performance Indicators (KPIs)

• Oceania will reduce its greenhouse gas emissions in line with targets approved by the international Science Based Targets initiative.
• Oceania will increase its diversion rate of construction waste from landfill. This will become increasingly important as the country’s retirement age population grows and Oceania’s build pipeline expands to meet retirement living industry demand.
• Oceania will also work to improve the experience and wellbeing of residents through excellent quality of care, including people-centred care and resident engagement, which will be measured in part by residents’ own expression of their health and wellbeing.

A sustainability-linked loan is an important step in Oceania’s sustainability journey and it is encouraging to have wellbeing and resident experience as the hallmark of our social metric, said CEO Brent Pattison.

“Oceania is striving for excellence in both clinical best practice and resident wellbeing. This loan encourages us to go even further with our model of care excellence and help us to achieve our ambition of being the leader in the delivery of resident-centred retirement and aged care living in New Zealand”.

“As evidence of climate change becomes more apparent, we must take responsibility and implement initiatives to reduce greenhouse gas emissions. We are committed to reducing our controllable emissions through ongoing measurement, an emissions reduction plan and working towards becoming science-based target verified,” he added.

Oceania’s CFO Kathryn Waugh said linking the loan to sustainability goals and measures is testament to Oceania’s commitment to sustainable growth.

“We know that ESG is important to our people, our residents and our stakeholders. We wanted to link our borrowings to our sustainability vision and commitments so we can drive our performance even further and with greater ambition.”

ANZ is the sole mandated lead arranger and sustainability coordinator for Oceania’s loan.

ANZ Head of Sustainable Finance Dean Spicer, congratulated Oceania on linking its borrowings to environmental and social goals.

“The KPIs will provide a roadmap for sustainable investment, while also providing a financial incentive to hit targets. We’re delighted to be on this journey with Oceania as they strive for even greater sustainability in their operations,” he said.

“The establishment of a meaningful measurement of care residents’ wellbeing is an important development for the sector. Social impact is challenging to quantify, and by including this holistic assessment of social, physical and psychological wellbeing, Oceania is further encouraged to support improvements in resident experience,” he added.

Accountancy firm Ernst & Young provided limited assurance over the KPIs and loan sustainability performance targets against internationally recognised Sustainability-Linked Loan Principles.

The Lenders to the syndicated facility included ANZ, ASB and ICBC.

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