LLOYDS BANK

overall rating:

2.3

planets

Zheqing Yu
7/26/2022
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Lloyds Bank has a very wide range of investment areas and their investments in sustainability are in four main areas: energy, transport, emissions, waste and water. Lloyds has divided the sustainability path into 3 stages: Getting Started, Your Sustainable Transition, Heroes of Net Zero. This division can help Lloyds offer different financing options for companies of different sizes and yields. Lloyds committed to helping companies reduce their overall costs and energy use. In order to complete this commission, Lloys offers a lot of sustainable products and services, such as reducing interest rates, discounted term loans (£50K min.) and asset finance (£25k min.).

 

What it's made of:

2.3

Lloyds Bank has a Clean Growth Financing Initiative which lets clients access discounted lending for green purposes. They claim to dedicate 3-25 millions of their turnover, and even more, to reducing carbon and greenhouse gas emissions from core business processes, properties and infrastructure, investing in low-carbon transport and investing in water, etc. They claim to be committed to helping businesses reduce their environmental impact, aiding their move to a low carbon economy, and providing facilities for clear, specific green use. In my opinion this is not just an empty phrase, they are really working hard to achieve their goals. Here are some of the specific efforts they have made to accomplish this goal:

 

In recent years, Lloyds Bank has invested in sustainable development in agriculture, manufacturing, the food industry, real estate and more. For example, they invested £785,000 in Bristol Dairy Farm through the Clean Growth Finance Initiative to improve sustainable technologies, double productivity and reduce energy costs. Hillbrush, with the help of Lloyds Bank, has built an ultra-modern site that uses high-tech equipment and features designed to deliver greater fuel, energy and water efficiency. Hillbrush has generated 20% of its energy this year since investing in solar panels on their new premises. Island Delight has received a loan of £600,000 from Lloyds Bank to support its ongoing efforts to reduce its environmental impact. The company has been using anaerobic digestion to produce energy from their food waste and has had a zero waste to landfill policy for over 15 years.

 

Lloyds' disclosures in this section are particularly complete, covering not only the motivation before the investment, the details of the investment process, but also the post-investment follow-up with the partner company. And for each different sector, Lloyds produces a detailed sustainability report. These are sufficient details to give us reason to believe that Lloyd's is really contributing to the sustainability community and is not just trying to cover up some greenwashing!

 

How it's made:

2.6

Lloyds Bank has very strict selection criteria for sustainable investments. Their loan funds can only be used for specific green purposes such as electric vehicles, wind turbines and solar panels, plant and machinery as covered by the Enhanced Capital Allowance Scheme. And when funds are earmarked to reduce the environmental impact of the business, discounted term loans (minimum £50,000) and asset finance (minimum £25,000) are available. Lloyds Bank also has a range of Green Buildings Tools (such as sustainability planning, portfolio insights and cost saving) to help clients identify, assess and understand their properties to make it more sustainable and energy efficient.

 

Lloyds' website has excellent transparency and accessibility. Customers looking for a loan can very easily find the sector they belong to on the Lloyds website. For example, in the agriculture sector, through the Lloyds website, customers can contact local experts for regional support and business advice, as well as tailored funding to help them expand their modern, diverse and sustainable farm business. Customers can also find the latest industry-related policies on the website, such as The Brexit Trade Agreement and its implication for agriculture. This has significantly improved the efficiency of the lending process and also advanced Lloyds' progress towards its sustainability goals.

Who makes it:

2

Last year, Lloyds Banking Group provided £2.3 billion of green funding to businesses and it expanded funding under the Green Finance Initiative from £3 billion to £5 billion in 2021 to support the green transition. The Group has also partnered with the Cambridge Sustainability Leadership Institute to train over 800 colleagues on the risks and opportunities associated with climate change and sustainable development.

 

Jonas Persson is Head of Sustainability and ESG Finance at Lloyds Bank and has led the Energy and Utilities business for 20 years. He joined Lloyds Bank in 2008 and has been driving the renewable energy and ESG agenda internally and externally, and is proud to support Lloyds Bank's commitment to achieve a 50% carbon reduction by 2030. Jonas has a proven track record of guiding the business in a commercial and prudent manner, taking into account the significant challenges of political, regulatory and technical risks.  He has a reputation for successfully building strong teams and developing talent.

 

I really appreciate the transparency of Lloyds in terms of disclosure, almost all the information I can imagine can be found on the official website and the details are disclosed in full. The only downside is that I didn't find more information about investment managers or analysts in ESG and wish I could  learn more about the background of the managers in the ESG area at Lloyds.