Aussie lender breaks new green ground

A green term deposit, which has passed the scrutiny of the Climate Bonds Initiative (CBI), will siphon funds to low-carbon buildings and transport, plus support renewable energy

Lee Hatton
Lee Hatton

Focusing on environmentally-aware millennial customers, Australian online lender UBank is set to launch what it dubs the world’s first consumer green term deposit. It remains to be seen if Asian banks will follow suit.

Established in 2008, UBank operates as a division of National Australia Bank and provides savings products and home loans via the internet and telephone.

The new offering from the Sydney-based institution is certified by the Climate Bonds Initiative (CBI). The CBI runs a strict regulation process, only permitting certification to assets and ventures which genuinely address climate change.

Green finance can be good for business

Created to grant depositors the chance to make a positive impact on the environment, UBank’s green term deposits are matched to a portfolio of renewable energy projects.

All green term deposits will support projects such as wind and solar power, and low-carbon transport and buildings,

“It’s the first CBI certified product of its kind in the retail space globally, and another example of how our innovative team is redefining banking for our customers,” says Lee Hatton, UBank CEO.

“We are hoping to dispel the myth that sustainable products provide a less than desirable financial outcome,” adds Hatton.

Across Asia there is increasing investor appetite for climate-aware investments and gradually more environmental, social and governance (ESG) or thematic funds are coming to the market.

In July last year, Singapore-based IIX listed a social sustainability bond, the Women's Livelihood Bond.

Engaging retail customers

The US$8 million bond offers loans to social enterprises and microfinance institutions that aim to support more than 385,000 women in Cambodia, the Philippines and Vietnam, helping them to grow their businesses and produce highly-desirable social impacts.

But so far, only institutional and high net worth customers are having their green investment needs satiated in Asia.

In order for green finance products to penetrate into mainstream consciousness, banks must work on delivering a message that is easy to understand and offer products available to all, thereby democratizing the process. 

More choices on mortgages and car loans could be one way to quickly ramp up the offering to the millions of retail customers in Asia.

Green car loans support the purchase of electric, hybrid or vehicles with high fuel efficiency, while green mortgages offer lower interest rates for those who buy energy efficient homes.


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15 Mar 2019


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