Spark New Zealand: Finance sets up sustainability loans linked to its environmental and diversity performance
Spark Finance Limited, the wholly-owned subsidiary of Spark New Zealand Limited which carries out the borrowing business for the Spark Group (“Spark”), today announced that by refinancing three existing loans, it has set up three sustainability-related loans totaling NZ $ 425 million.
Stefan Knight, CFO of Spark, says: “When we launched our three-year strategy in 2020, sustainability was identified as one of the four strategic pillars. We focus on supporting Aotearoa’s transition to a high productivity, low carbon economy; improving our own sustainable development practices – in particular our environmental performance; defend digital equity; and continue to build a diverse and inclusive culture.
“We have made progress over the past year in all of these areas. Spark was the first digital services company in New Zealand to set a science-based emissions reduction target (SBTi), verified by the Science-Based Targets (SBTi) initiative, to ensure that we are supporting global efforts to keep warming below 1.5 degrees.
“Through our SBTi, we are committed to reducing our absolute Scope 1 and 2 greenhouse gas (GHG) emissions by 56% by fiscal year 30, and we will focus on our supply chain. to ensure that at least 70% of our suppliers, in terms of spending, also have science targets in place by FY 26. We have also assessed and reported the risks and opportunities associated with climate change in the across our operations, in accordance with the guidelines of the Climate-Related Financial Disclosures Working Group.
“Spark is committed to developing a culture that is deeply rooted in diversity and inclusion. Our board of directors and leadership team met our goal of 40:40:20, and across the company , we are moving towards that goal – with women now making up 35% of our workforce.
“By tying our funding to further advancements in these areas, we hope to demonstrate our conviction and hold ourselves more broadly accountable to our investors and stakeholders. ”
The sustainability related revolving loan facilities are with three lenders – Westpac NZ (Westpac) who acted as the sole sustainability structuring coordinator and sustainability finance lenders, Commonwealth Bank of Australia and MUFG Bank. The facilities will be used for general corporate purposes, with Spark receiving a lower interest rate if it meets its sustainability goals and a higher interest rate on the loan if it does not.
Joanna Silver, Head of Sustainable Finance at Westpac NZ, said: “We congratulate Spark for affirming its commitment to its science-based 1.5 degree emission reduction target and also for engaging its suppliers in this adventure. Spark is a strong voice on the need for gender equality in business. Westpac NZ is excited to be able to work with the Spark team to set annual goals to support Spark on its sustainability journey. ”
Spark Sustainability Loan Details:
Target 1: Reduce absolute GHG emissions from Scopes 1 and 2
Spark is committed to reducing absolute greenhouse gas emissions from Scopes 1 and 2 by 56% by FY30, compared to a benchmark FY20. Target 1 is informed by this commitment for FY30 and Spark is taking steps to move forward in this direction.
Target 2: Suppliers setting science-based emission reduction targets (Scope 3)
Spark commits that 70% of its suppliers, in terms of expenditure covering purchased goods and services and capital goods, have scientific objectives by FY 26. Target 2 is informed by this commitment FY26 and Spark is making progress on this one.
Objective 3: Defend diversity and inclusion
Spark continues to promote equality in gender representation as it strives to achieve its 40:40:20 gender representation goal. Target 3 is informed by this commitment and Spark is making progress in this direction.
Westpac NZ has been appointed by Spark as the Sole Sustainability Structuring Coordinator and is providing a $ 200 million sustainability loan, with a maturity date of November 30, 2023.
Commonwealth Bank of Australia is a sustainable finance lender and provides a sustainability linked loan of $ 100 million, with a maturity of November 30, 2024.
MUFG Bank is a sustainable finance lender and provides a sustainability linked loan of $ 125 million, with a maturity date of November 30, 2025.
Deloitte provided assurance on Spark’s greenhouse gas inventory and DNV provided a second opinion for loan targets to ensure they meet international principles and standards.
The Science Based Targets initiative is a global partnership that offers a clearly defined path to reduce emissions in line with the goals of the Paris Agreement. SBTi independently assesses and approves companies’ emission reduction targets according to strict criteria.