CapitaLand bags $300m sustainability loan

It can be used for general corporate purposes and not just for specific projects.

CapitaLand secured a $300m multi-currency sustainability-linked loan from DBS, an announcement revealed. The five-year term loan and revolving credit facility is said to be the first sustainability-linked loan in Asia’s real estate sector.

According to the firm, the loan is explicitly linked to CapitaLand’s listing on the Dow Jones Sustainability World Index (DJSI World) where the firm is the highest ranked Singapore company and is one of the only two Singapore firms listed on the 2018 DJSI World.

DJSI tracks the performance of the world’s leading companies in environmental, social and governance (ESG) efforts.

The loan is allowed to be used for general corporate purposes, unlike green loans where proceeds are applied towards the funding of specific projects.

“With growing public expectations and deeper focus on sustainability, embracing sustainability is not only good for our shared communities but also beneficial for business,” CapitaLand Group CFO Andrew Lim said.

The 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 based on the RobecoSAM Corporate Sustainability Assessment (CSA) and a retained listing on the DJSI World.

“There are growing expectations for corporates to adopt more sustainable practices,” DBS global head of real estate at institutional banking group Chew Chong Lim commented. “A focus on financials, while important, will no longer suffice.”

In its latest Global Sustainability Report, CapitaLand reported a 29.4% reduction in carbon emissions intensity since 2008, exceeding its 2020 target of 23%.

CapitaLand and DBS are among the founding members of the Singapore Circle of Practice for Accounting for Sustainability (A4S) which eyes to adopt, learn and improve on addressing social and environmental risks and opportunities through financial processes and decision making.

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