This is the first and largest sustainability linked credit in Asia’s property industry.
CapitaLand revealed on Thursday (4 Oct) that it has clinched a $300 million multi-currency sustainability-linked loan from DBS Bank. Aside from being Singapore’s biggest sustainability-linked financing provided by one lender, the five-year loan and revolving credit facility is the first and largest sustainability linked credit in Asia’s property industry.
Unlike green loans wherein the proceeds can only be used to fund eco-friendly projects,
CapitaLand has the option to utilise it for general corporate purposes.
However, the conditions for this debt surpasses the typical requirements of being eco-friendly or just achieving a green rating. It is explicitly linked to CapitaLand’s listing on the Dow Jones Sustainability World Index (DJSI World), which measures the performance of multinational firms in environmental, social and governance (ESG) efforts.
Aside from remaining on DJSI World, the debt’s coupon will be reduced further on a tiered basis, subject to CapitaLand’s ESG performance as evaluated by the Corporate Sustainability Assessment (CSA) of RobecoSAM, an international firm dedicated solely to sustainability investing.
“With growing public expectations and deeper focus on sustainability, embracing sustainability is not only good for our shared communities, but also beneficial for business. By working with committed partners such as DBS and RobecoSAM, we aim to identify and capture the tangible benefits of good sustainability practices,” said CapitaLand Group’s chief financial officer Andrew Lim.
“As we seek to continually deliver long-term value for our stakeholders, we remain guided by our credo – ‘Building People. Building Communities.’ – to improve the economic, environmental and social wellbeing of the communities we operate in.”
Last month, CapitaLand was the only Asian firm that made it to DJSI World’s top 10 real estate companies, in addition to being one of only two entities from Singapore that were included in the index.
Aside from reducing carbon emissions by 29.4 percent since 2008, the company has also achieved 23.4 percent and 24.1 percent reductions in power and water usage, respectively. Since 2009, this has led to utilities savings of around $140 million.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email email@example.com