Making the grade in New Zealand
Alternative asset manager Morrison & Co has mobilised sustainable finance to create long-term value for the environment, community and investors as it invests in environmental and social improvements at two of the schools in New Zealand.
Morrison & Co incorporates environmental, social and governance (ESG) practices across its investment portfolio, with social infrastructure as one of its key areas of focus alongside renewable energy and energy networks1. With support from Societe Generale, the firm arranged a NZ$60 million (EUR36.2 million) Sustainability Loan facility to refinance the public education facilities and provide funding for energy efficiency and water conservation, as well as upgrades that will enhance and broaden access to the schools.
Both schools at Hobsonville Point in Auckland are managed through a public-private partnership (PPP) led by Morrison & Co. This was established in 2012 with the New Zealand Ministry of Education, and covers the design, financing, construction and maintenance of the schools on a 25-year concession.
The New Zealand Ministry of Education has given the loan financing its official approval and the framework is endorsed by DNV, an independent international Second Party Opinion provider, as aligned with the stated definitions of green and social loans within the Green Loan Principles 2021 and Social Loan Principles 2021 published by the Asia Pacific Loan Market Association / Loan Market Association/ Loan Syndicate and Trading Association.
“We are committed to responsible investment,” said Steven Proctor, Executive Director at Morrison & Co, which administers a portfolio of 11 schools in New Zealand. “Developing these schools’ sustainability resources provides better environmental and societal benefits for students, community groups and enhances value for investors over time.”
Best in class
The sustainable financing binds the schools to initiatives that are designed to make a positive contribution to society and the environment.
The primary and secondary schools have committed to provide a special unit that offers children with disabilities access to individualised learning programmes, therapy and staff support. School facilities must also be available for community groups to hire, opening them up to a wider range of stakeholders.
In addition to these social benefits, the funds are earmarked for a comprehensive range of environmentally friendly features. Energy-efficient features include a solar panel array on the roof and a building management system that minimises heating and cooling requirements.
The management system will track solar power generation on a monthly basis and monitor the schools’ overall energy efficiency. Other features include rain gardens that assist with stormwater collection, and rainwater harvesting tanks to provide water for toilet flushing. The schools also offer pedestrian- and cycle-friendly links to surrounding streets, as well as bicycle and scooter parking to encourage sustainable transport.
Both schools have five-star ratings under the Global Real Estate Sustainability Benchmark (GRESB) Infrastructure Asset Assessment framework, ranking the schools amongst the top ESG performers within their respective categories. The assessment framework enables participants to report their ESG performance data within a standardised system, while this process yields high-quality data for investors and participants to use in investment and decision-making processes. 2
The schools’ design and construction also achieved five-star ratings under the New Zealand Green Building Council (NZGBC)’s Green Star classification system – an independent, holistic and transparent system to promote sustainability best practice in commercial buildings. 3
Societe Generale advised Morrison & Co in designing the Sustainable Financing Framework enabling the issuance of a Green and Social Loan for Hobsonville Schools, acted as financial advisor to the asset manager for its Hobsonville Point financing.
Yasmine Djeddai, Head of Sustainable Finance, Asia Pacific at Societe Generale, said, "We were delighted to advise Morrison & Co in designing a credible Sustainable Financing Framework, enabling the issuance of a Green and Social Loan for Hobsonville Schools. This achievement recognises Morrison & Co's efforts to embed sustainability across its schools portfolio. This is also aligned with our ambition to support our clients in structuring financing of essential infrastructure for sustainable development."
Private capital, public benefit
This financing brings together the bank’s expertise in sustainable finance and infrastructure projects, and adds to the bank’s track record in social infrastructure projects.
“Social infrastructure is vitally important to communities and Societe Generale is committed to helping Morrison & Co deliver more accessible and sustainable school facilities in New Zealand,” said Marie Vinnell, Head of Infrastructure Finance for Asia Pacific at Societe Generale. “We were proud to be involved with Morrison & Co’s first schools sustainability loan in February and to have supported its return to the market with this transaction. Societe Generale is one of the leading banks in financing social and digital infrastructure, with capabilities that match our traditional strength in traditional infrastructure.”