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Customer Story

How a Leading Infrastructure and Facilities Conglomerate Successfully Linked its Sustainability Ambitions to its Financing

In pursuing a sustainability-linked loan (SLL) and obtaining a second-party opinion on the KPIs tied to it, Downer secured credibility for its sustainability commitments, while also achieving its financing objectives.


Sustainalytics’ Solutions

Sustainability-Linked Loan Opinion


Industrial Conglomerates 


Asia Pacific

Ricky Bridge, Downer

“Of course we think our sustainability KPIs are ambitious, but it’s essential to have an independent party like Sustainalytics, that specializes in this area and has a global perspective to say ‘Yes, we believe these KPIs meet the Sustainability-Linked Loan Principles.'”

Ricky Bridge

Group General Manager for Environment, Sustainability and Reporting, Downer


The Challenge 

Demonstrate sustainability commitments and transparency to stakeholders by linking loan financing terms to corporate sustainability improvements.


The Solution 

Obtained a second-party opinion on the KPIs tied to Downer’s loan in order to meet its borrowing agreement with lenders and align with market best practice as outlined in the Sustainability-Linked Loan Principles.


The Results 

Sustainalytics’ second-party opinion letter enabled Downer to provide its lenders and other stakeholders with details on the materiality, relevance and ambitiousness of the targets and KPIs tied to its sustainability-linked loan.

About Downer

Downer designs, builds, and maintains assets, infrastructure and facilities and is the leading provider of integrated services in Australia and New Zealand. Downer’s primary focus is on urban services including transport, utilities, facilities and asset services. It works closely with customers through the full life of their assets – from feasibility and design, production and operations, and eventually decommissioning. Downer is also one of the largest private sector employers in the region with more than 45,000 employees across Australia and New Zealand.

The Challenge

Link Corporate Sustainability Ambitions to Financing 

Over the past 15 years, Downer’s focus on sustainability has evolved. Initially directed at the environmental and some social aspects of its operations, the company’s consideration of ESG issues has expanded to become fully integrated into its overall business strategy, including its approach to corporate finance.  

In late 2020, the company had a refinancing requirement following the completion of the acquisition of Spotless and took the opportunity to integrate its sustainability objectives by opting for a sustainability-linked loan (SLL). As a sustainable finance instrument designed to incentivize sustainability advancements at the borrowing company, an SLL fit perfectly with Downer’s broader sustainability strategy.

Benefits of SLLs for Companies

linked loans

Access to discounted loan rates


Improve overall sustainability performance


Demonstrate sustainability commitments to stakeholders


Flexibility to use the funds for general corporate purposes


Deepen relationships and interactions with banks


Drive internal alignment across the business


Leverage third-party ESG ratings as additional assessment of sustainability

Image Outlining Key Benefits of Sustainability-Linked Loans for Borrowing Companies

The Solution

Work with Trusted Partners to Structure a Credible SLL Agreement Aligned to Market Expectations

Once Downer and its coordinating banks discussed the feasibility of an SLL, they selected and agreed upon a set of key performance indicators (KPIs) they believed to be ambitious (going beyond “business as usual”) and relevant to the business and their sector. Greenhouse gas (GHG) emission reduction targets were a natural fit for Downer given its business model, but the emphasis on key social targets were also meaningful in the company’s view. 

Downer SLL KPIs 
GHG emission reductions aligned with a well below 2CC decarbonization pathwayYear on Year ~3% reduction in GHG emission intensity.
Indigenous cultural awareness trainingNumber of training hours delivered as part of the Māori leadership programs in New Zealand and Indigenous Cultural Awareness Training program in Australia.
Mental health trainingNumber of employees trained in the Mental Health First Aid Australia (MHFAA) and Mental Health First And New Zealand (MHFANZ) accredited training program.
List of Key Performance Indicators Used in Downer's Sustainability-Linked Loan Agreement

Paul Macfarlane, Group Treasurer at Downer noted: “As one of the largest private sector employers in the region, social KPIs were also important for us. By linking these social KPIs to our loan terms, we wanted to demonstrate our commitment to employee well-being, mental health and Indigenous awareness training.”  

As stipulated by the Sustainability-Linked Loan Principles (SLLP), borrowers should engage with an external sustainability expert to obtain a second-party opinion (SPO) of the key performance indicators and sustainability performance targets tied to the SLL. The SPO speaks to the relevance, materiality and ambitiousness of the selected performance targets and indicators.  

Although the coordinating banks presented Downer with a few options for SPO providers, Downer ultimately chose Sustainalytics because of its market leadership and its reputation as a responsive, constructive, and easy to work with partner.  

The Results

A Second-Party Opinion Lending Credibility to Downer’s SPTs and KPIs

Following an initial kick-off call, Sustainalytics conducted an analysis of Downer’s sustainability performance targets (SPTs) and the KPIs for each, assessing the alignment of the agreement to the SLLP, the SPTs and their link to the company’s overall sustainability strategy, and the materiality of the SPTs to the company.i  

Sustainalytics provided a KPI opinion letter, lending credibility to the KPIs in the loan. For Downer, the letter was helpful in explaining the KPIs to the syndicate of banks involved in the loan, some of which were less knowledgeable about key ESG issues facing Downer and similar companies. The SPO from Sustainalytics provided details about the KPIs and how meaningful they were to Downer’s business and sustainability strategies. In addition to its banking partners, Downer made the SPO publicly available to its investors, as a sign of openness, transparency and accountability.  (Please click on the following link:

Through its SLL, and with support from its lending banks and Sustainalytics, Downer was able to demonstrate sustainability leadership and commitments while further aligning its sustainability objectives across the company.

Sustainability-Linked Loan Opinion Report Process*



Loan Agreement

  • Company and bank discuss feasibility and terms of the sustainability-linked loan


Kick Off

  • Sustainalytics reviews sustainability details of loan transaction
  • Sustainalytics drafts opinion report



  • Company provides feedback on draft opinion report
  • Sustainalytics integrates feedback



  • Final opinion report goes through Sustainalytics internal review committee for sign off
  • Opinion report goes to client for sign off
  • Final opinion report published
Outline of Sustainalytics' Standard Process to Provide a Sustainability-Linked Loan Opinion Report 
*Depending on the complexity and nature of the KPIs selected, the SPO process takes approximately 6 weeks.
Downer SLL Opinion Report
Image of Downer's Sustainability-Linked Loan Opinion Report Provided by Sustainalytics
Paul Macfarlane, Downer

"A sustainability-linked loan presented a unique opportunity to merge our sustainability strategy with our financing strategy."

Paul Macfarlane

Group Treasurer, Downer

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