Singapore: CapitaLand Ascott Trust (CLAS) has secured a S$165 million sustainability-linked loan from bank OCBC.
OCBC Bank introduced its OCBC 1.5°C loan in 2023. The financing solution incentivises corporates to set and work towards clear carbon emissions reduction targets aligned with internationally recognised, science-based net-zero decarbonisation pathways for their sectors.
When the targets are met or exceeded, corporates will get a reduced interest rate on their loans.
CLAS will receive interest rate reductions upon meeting the agreed annual greenhouse gas (GHG) emissions reduction targets. Proceeds of the facility will be utilised for general corporate purposes.
CLAS’ GHG emissions reduction targets are aligned with its sponsor CapitaLand Investment’s (CLI) 2030 Sustainability Master Plan. CLI has committed to achieve net zero emissions by 2050 for its Scope 1 and 2 emissions, and aims to reduce absolute Scope 1 and 2 emissions by 46 per cent by 2030.
Serena Teo, CEO of CapitaLand Ascott Trust Management Limited and CapitaLand Ascott Business Trust Management (the managers of CLAS), said: “At CLAS, sustainability is a key focus and priority in everything we do. It is integrated throughout our business, including our capital management strategy. Leveraging CLAS’ leadership in sustainability, we are able to dovetail our environmental efforts with our financing needs.
“With this facility, CLAS has secured a total of over S$700 million in sustainable financing to date. We continue to collaborate with like-minded stakeholders in the banking and finance industry to do good, as we deliver long-term value to our stapled security holders,” she added.
Elaine Lam, head of global corporate banking at OCBC, said: “We are pleased to support CLAS and its decarbonisation ambitions with our OCBC 1.5°C loan. Despite macroeconomic challenges, it has been very encouraging to see more companies across various sectors in the region chart out their net zero journeys and setting SBTi-aligned decarbonisation targets.
“For those companies that are not quite as advanced yet, we have been actively engaging them on their transition plans and viable next steps to take. We are committed to support their net zero ambitions and the shift to a low-carbon future,” Lam said.
As of 30 June 2024, OCBC’s sustainable financing loans had grown 33 per cent from a year ago, and total sustainable financing loan commitments stood at S$63.3 billion.
