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5-Star Sustainable Programs

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Finance for the future

From zero-waste initiatives to ethical investing, AB’s 5-Star Sustainable Programs spotlights the outstanding organisations helping create a greener tomorrow.

“Australian mortgage products that are linked to key [sustainability] goals will be in high demand over the coming years,” says Lara Gaede, leader of climate change and sustainability practice for the financial services sector at EY Oceania. “To be a top-performing sustainability program, it is important that there is a clearly articulated and ambitious sustainability goal that the program is supporting.”

This year’s 5-Star winners have promoted sustainability wholeheartedly and undertaken green initiatives that not only make a difference but also boost revenue and attract clients.

Eco-friendly finance

One of Australia’s largest non-bank lenders, Firstmac, showcases that environmental products also drive business. As part of its Greenhouse Emissions Reduction Program, the company has signed deals worth almost $400 million via its Green Loan products:

Green Car: settled 1,454 loans with a value of $81 million since 2018
Green Home: written 43 loans totalling $21.4 million since 2021
Solar Home: written 499 loans worth $274.9 million since 2023

While Firstmac’s Green Car and Solar Home loans provide discounted interest rates to those purchasing qualifying low-emission vehicles and solar energy systems, the Green Home Loan offers low interest rates to borrowers whose homes achieve a Nationwide House Energy Ranking Scheme (NatHERS) rating of 7 stars or higher.

“Our program is likely to have prevented more tens of thousands of tons of CO2 emissions, and we expect this to grow rapidly,” says a Firstmac spokesperson. “The Firstmac Greenhouse Emissions Reduction Program will continue to improve in the coming years, making an ever-increasing contribution to reducing climate change for the benefit of future generations.”

Raising the sustainability bar

Beyond Bank was the first bank in Australia to achieve B Corp global certification in 2015, which recognises businesses that meet certain standards of social and environmental performance and accountability.

Beyond Bank is a part of a global network of leading organisations that have shown outstanding performance across key pillars:

1. Governance: evaluates the overall mission, engagement and ethics

2. Workers: tracks contributions to employee financial security, health and safety and career development

3. Community: assesses its impact on the communities in which it operates

4. Customers: measures value to customers through the quality of its products and services

5. Environment: analyses overall environmental management practices

“You have to go through a rigorous process; you can’t just pay a fee and become a certified B Corp,” says Beyond Bank head of corporate affairs, sustainability and community Shane Farley. “It took us nearly eight months the first time we were certified.”

As of 2023, Beyond Bank is the sixth-highest-scoring bank in the world, and its B Impact Score has improved by almost 50% since it was first certified:

2015: 105.4
2023: 146.7

“One of the great things about that B Corp certification is that those metrics aren’t stagnant. The bar keeps getting higher,” Farley says. “We certified the second time [2017] with a score just below 100. And the first reaction inside our business was, ‘What’s happened here?’ But it wasn’t that we hadn’t improved; it was that the bar had gotten higher, and I think that’s a good thing.”

Beyond Bank not only values B Corp’s ranking internally but is also actively involved in assisting other banks in Australia to achieve certification.

Farley says, “When we became certified, we absolutely didn’t want to be the only financial institution in the country that was on that path, because our view was that if more organisations went on this path, that’s only good for the communities that we operate within. And if you’ve got strong communities, then you’ve got strong business. And that’s good for us as well.

“Being good, doing good for the environment and being successful as a business – they’re not mutually exclusive. You can do both. Positive change in the environmental space isn’t just about risk mitigation; it’s also about opportunity creation.”

“A sustainability team can’t just be a small team in the corner on the 12th floor. We’ve set up a network of people across our business that help us implement initiatives that have an impact”
Shane FarleyBeyond Bank

Sustainable profits for the planet

Simon O’Kelly, director of Finance for Living, is so passionate about the environment that he sought out former American vice president Al Gore. After attending group training seminars in the early 2000s, O’Kelly delivered updated presentations on Gore’s documentary An Inconvenient Truth, which sought to spread awareness of climate change.

“I’m not a scientist. And that was one of the reasons [Al Gore] did this. He thought that the scientists weren’t necessarily getting the [information] out,” says O’Kelly. “Scientists, by nature, are very conservative with their language. So, he wanted the everyday person to get out there and deliver the message.”

When discussing a client’s mortgage options, O’Kelly makes a concerted effort to present environmentally conscious lenders, including Adelaide Bank, Bank First and MyState Bank. He has also committed his brokerage to causes such as One Percent for the Planet, whose members contribute at least 1% of their annual revenue to a vetted list of environmental nonprofits.

As a committed member, Finance for Living has gone through an annual recertification process since 2019. During this time, the business has donated over $24,000 to Environment Victoria, which runs campaigns around climate change and sustainable living.

For O’Kelly, balancing ethical considerations with profit has never been a dilemma.

He says, “I’ve just always been more of a future-looking person. I’m very aware that whether you have kids or not, there are still future generations, and so much damage is being done. There’s a limited period to try to make a difference, and we live in a country that’s been very slow for a long time.”

“I had someone say to me once, ‘I wouldn’t have thought there’d be a mortgage broker who cares about the environment’”
Simon O’KellyFinance for Living

Looking ahead

Following the example of other industry leaders like Firstmac, Beyond has been working to develop a green loan offering, which the company reveals is not far from launch.

“We’ve been working with our products team to develop a product that encourages and facilitates positive environmental upgrades to the home,” says Farley. “We’re also working on a loan facility for electric vehicles to encourage greater uptake in the electric vehicle market.”

Industry expert Gaede says, “[Environmental] issues will continue to evolve over time, so the mortgage sector will need to keep pace in order to keep meeting the needs of customers, regulators and society in an environment that is changing more quickly than at any other time in history.”