Green Loans Australia and New Zealand

The labelled green loan market in Australia and New Zealand is in its early stages, with 14 labelled green corporate loans recorded since 2018. While the loan market is significantly larger than the bond market, labelled bonds have historically led in sustainable finance. Growth is being driven by bank green lending targets, increasing ESG awareness among corporates, and institutional investor demand. The report highlights the potential for green loans to fund early-stage projects and the rise of sustainability-linked loans (SLLs), which incentivise overall corporate ESG performance rather than specific assets. It also notes the expansion of green consumer loans, particularly for energy-efficient homes and electric vehicles, and suggests regulatory incentives and improved corporate ESG frameworks to accelerate market development.

• The labelled corporate loan market in Australia and New Zealand is nascent but growing, with 14 labelled green loans recorded since 2018, ten of which are certified under the Climate Bonds Standard.
• Despite the loan market being substantially larger than the bond market—with Australia's loan market exceeding AUD 3 trillion compared to a domestic bond market of AUD 1.8 trillion—labelled bonds have historically seen more issuance due to earlier global precedents and infrastructure.
• Green loans offer distinct advantages over bonds by providing direct financing for the developmental stages of new projects, offering greater flexibility for cash drawdowns and a higher capacity to absorb project development risk.
• Sustainability-linked loans (SLLs) are emerging as a flexible tool for companies in high-emission or 'hard-to-abate' sectors to demonstrate strategic shifts toward low carbon operations, as they are based on performance targets rather than specific green assets.
• Green consumer loans are expanding in Australia and New Zealand, primarily for electric vehicles, rooftop solar, and batteries, though a significant need remains to develop a green home loan market to address the fact that Australian homes contribute 13% of the nation's total carbon emissions.
• Growth in the green loan market is supported by the four major banks in Australia and New Zealand declaring green lending portfolio targets and the increasing integration of ESG factors into credit assessments.

APA

Siva, H. (2020). Green Loans Australia and New Zealand. Climate Bonds Initiative. https://www.climatebonds.net/files/documents/publications/Green-Loans-Australia-New-Zealand.pdf

Chicago

Siva, Haran. Green Loans Australia and New Zealand. Climate Bonds Initiative, 2020. https://www.climatebonds.net/files/documents/publications/Green-Loans-Australia-New-Zealand.pdf.

Wikipedia

{{cite report |last1=Siva |first1=Haran |title=Green Loans Australia and New Zealand |publisher=Climate Bonds Initiative |date=October 2020 |url=https://www.climatebonds.net/files/documents/publications/Green-Loans-Australia-New-Zealand.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{siva2020green, author = {Siva, Haran}, title = {{Green Loans Australia and New Zealand}}, institution = {Climate Bonds Initiative}, year = {2020}, month = oct, url = {https://www.climatebonds.net/files/documents/publications/Green-Loans-Australia-New-Zealand.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }