SINGAPORE - CapitaLand has secured a five-year, $300 million sustainability-linked loan, said to be the first and largest in Asia's real estate sector, from DBS Bank.
The multi-currency loan is linked to the developer's listing on the Dow Jones Sustainability World Index (DJSI World), which tracks established firms in areas such as environmental, social and governance (ESG) efforts. Unlike green loans, where the funds are used for certain types of projects, CapitaLand is able to use the loan for general corporate purposes.
Meanwhile, interest rates on the loan "will be further reduced on a tiered basis, contingent on CapitaLand's ongoing performance" against a set of ESG indiators based on RobecoSAM's Corporate Sustainability Assessment and a listing on the DJSI World.
Andrew Lim, group chief financial officer for CapitaLand Group, said: "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."
Chew Chong Lim, managing director and global head of real estate at institutional banking group at DBS Bank, said: "There are growing expectations for corporates to adopt more sustainable practices. A focus on financials, while important, will no longer suffice. We need to magnify the overlapping interests among the financial bottom line, the environment and our society."
In its latest Global Sustainability Report, CapitaLand reported a 29.4 per cent reduction in carbon emissions intensity since 2008, exceeding its 2020 target of 23 per cent. It has achieved 23.4 per cent and 24.1 per cent energy and water reduction respectively from 2008, exceeding its 2020 target of 20 per cent. This resulted in S$140 million in utilities cost avoidance since 2009.