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Australian university becomes first education institution to issue climate bond

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One of Australia’s top universities has achieved a world first, becoming the first higher education institution to issue a “climate bond”.

Monash University, a member of the elite Group of Eight universities, raised AU$218 million through the bond to fund sustainable development projects across its global campuses.

The bond, which was issued in the U.S. private placement market, was certified by the Climate Bond Initiative (CBI) and accredited by Moody’s as a Green Bond.

Over the next two years, the university plans to channel the capital raised through the bond to various projects, such as constructing or redeveloping environmentally-friendly buildings and installing solar panels and energy-efficient LED lighting.

Speaking to The Australian, Monash chief financial officer David Pitt said that though the climate bonds did not bring any tax or pricing advantages, the university chose to issue them in support of reaching its new environmental, social, and governance (ESG) policy targets unveiled last week.

“A large part of the market is keen to invest in things that are green, ESG-positive,’’ he said, adding that he expected other universities to follow in Monash’s footsteps.

CBI’s CEO, Sean Kidney, told Renew Economy that the move by Monash put it among “the international pacesetters” in green finance.

“They are providing leadership by example for both domestic and international tertiary institutions and wider investment sectors,” he said.

This isn’t the first time that the university has capitalized on the US debt markets to fund its capital works – in 2014, it raised funds build student residential buildings at the Clayton Campus.

In the announcement, Monash President and Vice-Chancellor Margaret Gardner said that the success of the climate bonds reflected Monash’s standing as a global university.

“As a truly international university, Monash has a responsibility to provide strong and visionary leadership on sustainable development. We want our campus network to be exemplars of environmental, social, and economic best practice,” she said.

She added that the university would unveil its target date for net zero emissions next year.

For the past few years, universities have begun to embrace the green movement, most notably through divesting from fossil fuel.

In May this year, La Trobe University was the first Australian university to commit to fossil fuel divestment, which it plans to carry out gradually over the next five years.

Monash, Australian National University, Queensland University of Technology, and the University of Sydney have since joined the movement as well.

Image via Monash University

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