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As investors turn to green, socially responsible investing in larger numbers, sustainable financing options are becoming more commonplace. The effective conversion of these funding opportunities into practical and meaningful ESG efforts, however, remains a challenge.
Hong Kong-based conglomerate New World Development (NWD) has taken some significant steps in this area. The company has raised over HK$46 billion (approximately $5.8 billion) in sustainable finance since 2018. NWD has the distinction of being the world’s first corporate to issue a US dollar-denominated social and green dual tranche bond in public markets. Besides being received enthusiastically by investors, the transaction marked the conglomerate out as the first non-financial corporate in Asia to issue US dollar social notes and the first corporate in Hong Kong to issue a US dollar green perpetual bond in the public bond markets.
An early adopter of sustainable finance
NWD’s success in sustainable finance stems from an ongoing commitment to ESG initiatives, focussed on making the world better for future generations. Many of these initiatives were in place long before sustainable finance became mainstream. Leveraging its first-mover advantage, NWD has created a virtuous circle enabling it to use sustainable financing to forge ahead with impactful ESG initiatives.
The ‘New World Sustainability Vision 2030’ (SV2030) strategy is a perfect example of how the conglomerate integrates sustainability into all aspects of its business and operations. This strategy sets concrete targets in line with the UN Sustainable Development Goals. Some of these include the ambition to halve NWD’s energy and carbon emissions intensity by FY2030 from the FY2015 baseline. To support the transition to cleaner energy, NWD has also pledged to power its rental properties in the Greater Bay Area and Greater China with 100% renewable energy by FY2026 and FY2031, respectively. It has also become the third real estate developer in Asia to receive the Science Based Targets initiative’s (SBTi) approval of its near-term 1.5°C aligned science-based targets and to commit to the SBTi Net-Zero Standard.
Connecting social progress with business success
Beyond environmental sustainability, NWD has developed several pioneering initiatives to create far-reaching, positive changes for society. ‘New World Build for Good’ is a not-for-profit social housing enterprise from the conglomerate which aims to address Hong Kong’s deep-rooted housing issues through innovative solutions. It intends to help buyers get on the housing ladder with a very low down payment.
NWD has also created Hong Kong’s first city-wide crowd donation platform, ‘Share for Good’ which matches donors with beneficiaries, to address urgent needs felt by local communities. In addition, NWD has launched the conservation project for the State Theatre, a Grade I historic site in North Point.
Having established itself as a leader in the Asia Pacific region with this social bond issuance, NWD has already identified various projects that fit the purpose of promoting social inclusion, such as increasing access to basic infrastructure and affordable housing. The conglomerate plans to earmark part of the proceeds to public sports grounds and other facilities in Kai Tak Sports Park.
NWD has also allocated the proceeds of a $500 million green perpetual bond to Portas, its new development in Cheung Sha Wan, Hong Kong. NWD’s commitment to creating green properties in the city is evident as the project has obtained relevant certifications including Beam Plus Provisional Gold, LEED Gold Precertification, and WELL Precertified Platinum.
The sustainable fundraising roadmap for NWD
Despite its success in sustainable fundraising, NWD remains prudent for future ESG-linked bond issuances. The company carefully selects appropriate bond products that fit its own long term sustainability strategy with those of the capital markets for ESG-linked bond issuances.
The key to these achievements lies in NWD’s capacity for innovation. The company works very closely with its banking partners to explore sustainable finance products. A more diverse group of investors have thus been drawn to NWD, accelerating sustainable development in the process. Looking ahead, NWD has set its sights on extending its industry leadership through innovative products whilst fostering a fundraising environment that encourages like-minded companies to make use of financial resources for greater good. NWD will continue to pursue the highest ESG standards and dedicate itself to promoting sustainability and CSV for society, investors, and all stakeholders.
