CapitaLand obtained a S$300 million multi-currency sustainability-tied loan from DBS Bank, in a deal that may be the first and largest sustainability-linked facility in Asia’s real-estate sector, it said in a filing to SGX before the market opened on Thursday.
The five-year term loan and revolving credit facility is tied to CapitaLand’s listing on the Dow Jones Sustainability World Index (DJSI World), which tracks companies’ environmental, social and governance (ESG) efforts,” CapitaLand said. It added that it was the highest ranked of the two Singapore companies in the index this year.
“With this sustainability-linked loan, CapitaLand has the flexibility to use the loan for general corporate purposes, unlike green loans where proceeds are applied towards the funding of specific projects,” it said. “In addition, interest rates on the sustainability-linked loan will be further reduced on a tiered basis, contingent on CapitaLand’s ongoing performance measured against a robust set of ESG indicators.”
CapitaLand noted that it published its first sustainability report in 2009, before Singapore Exchange began requiring the reports in 2016. The property developer noted in its latest Global Sustainability Report that it had a 29.4 percent reduction in carbon emissions intensity since 2008, exceeding its 2020 target of 23 percent.
“CapitaLand’s ESG achievements distinguish us in Asia’s real estate sector,” Andrew Lim, chief financial officer at CapitaLand Group, said in the statement. “Dovetailing CapitaLand’s ESG efforts with our cost of funding further demonstrates our commitment to embed sustainability into our business in the long run and is core to CapitaLand’s role as a responsible real estate company.”