Swire Pacific and DBS Bank (DBS) have reached an agreement to convert an existing five-year revolving credit facility of HK$2 billion, entered into in January 2020, into a sustainability-linked loan. This is Swire Pacific’s first sustainability-linked loan, with the interest rate payable under it reducible by reference to indicators of Company’s environmental, social and governance (ESG) performance.
DBS has structured the loan to incorporate tiered pricing in order to encourage achievement of sustainability targets. Swire Pacific will be eligible to receive interest rate savings upon achieving pre-determined targets which address material ESG issues such as energy consumption, water usage, and diversity and inclusion, whilst maintaining its listing on Dow Jones Sustainability Asia Pacific Index and improving related key performance indicators. The proceeds of the loan are to be used for general corporate funding purposes, including driving long-term sustainability performance of the Company.
Michelle Low, Finance Director, Swire Pacific, said, “We are delighted to have our first sustainability-linked loan provided by DBS. It underscores our longstanding view of the importance of sustainable development in overall value creation and as a core part of our long-term strategy for success. It is also a recognition that our strong performance in this area is not simply about compliance or risk management, but also about seeking commercial opportunities and realising wider business benefits.”
Mark Watson, Head of Sustainable Development, John Swire and Sons (H.K) Limited said, “Today’s announcement marks an important milestone in our sustainability journey, which began in the late 1980s, and which emphasises the need for a clear strategy, accountability and continuous improvement across our entire portfolio. This agreement marks the beginning of a new chapter for Swire Pacific, and signifies the coming of age of ESG as a mainstream issue for investors and corporations in Asia Pacific.”
Alex Cheung, Managing Director and Head of Institutional Banking Group Hong Kong of DBS said, “This landmark transaction is a significant first for Swire Pacific and we are honored to advise and support our longstanding client as they forge ahead on their sustainability journey. Greater China continues to see a growing demand for sustainability-linked financial products, and as a purpose-driven Bank, DBS remains committed to supporting our customers in meeting evolving business sustainability challenges, transitioning to a low-carbon economy and enabling long-term value.”
Sustainability remains a core focus for Swire Pacific and is central to its businesses and the communities in which it operates. 2019 was another significant year with progress made in several elements of the group’s sustainable development strategy including outperforming its carbon reduction target by 1.83%, publishing a climate change policy highlighting the importance of future climate risk and developing its diversity and inclusion strategic framework. At the operating company level, Swire Properties announced a carbon reduction target approved by the Science Based Targets initiative and Swire Coca-Cola announced Hong Kong’s first major plastic waste recycling facility.
DBS is a signatory to the United Nations Global Compact and is committed to driving progress towards the United Nations Sustainable Development Goals in ways that are meaningful to its businesses. This includes acting on climate change by partnering with corporates in adopting responsible financing practices. Since 2018, DBS has provided sustainable financing amounting to about S$14 billion.
Swire Pacific and DBS are listed on the Dow Jones Sustainability Asia Pacific Index and FTSE4Good Index. Additionally, Swire Pacific is listed on the Hang Seng Corporate Sustainability Index, while DBS is listed on the Singapore Exchange ESG Indices under the Leaders Index and Transparency Index.
DBS is a leading financial services group in Asia with a presence in 18 markets. Headquartered and listed in Singapore, DBS is in the three key Asian axes of growth: Greater China, Southeast Asia and South Asia. The bank's "AA-" and "Aa1" credit ratings are among the highest in the world.
Recognised for its global leadership, DBS has been named “World’s Best Bank” by Euromoney, “Global Bank of the Year” by The Banker and “Best Bank in the World” by Global Finance. The bank is at the forefront of leveraging digital technology to shape the future of banking, having been named “World’s Best Digital Bank” by Euromoney. In addition, DBS has been accorded the “Safest Bank in Asia” award by Global Finance for 11 consecutive years from 2009 to 2019.
DBS provides a full range of services in consumer, SME and corporate banking. As a bank born and bred in Asia, DBS understands the intricacies of doing business in the region’s most dynamic markets. DBS is committed to building lasting relationships with customers, and positively impacting communities through supporting social enterprises, as it banks the Asian way. It has also established a SGD 50 million foundation to strengthen its corporate social responsibility efforts in Singapore and across Asia.
With its extensive network of operations in Asia and emphasis on engaging and empowering its staff, DBS presents exciting career opportunities. The bank acknowledges the passion, commitment and can-do spirit in all of our 29,000 staff, representing over 40 nationalities. For more information, please visit www.dbs.com.
About Swire Pacific Limited
Swire Pacific Limited (HKEX: 00019/00087) is a publicly quoted company in Hong Kong, with diversified interests in five operating divisions: Property, Aviation, Beverages, Marine Services and Trading & Industrial. The company's operations are predominantly based in the Greater China region, where Swire has been established for over 150 years. It is also the major shareholder in two Hong Kong listed companies: Swire Properties and Cathay Pacific Airways.
Visit Swire Pacific’s website at www.swirepacific.com