DBS Bank has more than doubled its sustainable finance target to SGD50 billion from SGD20 billion by 2024, accelerating its sustainability agenda in helping customers incorporate sustainable business practices into their overall business strategy.
The new commitment reinforces DBS’ efforts in responsible banking which is a key pillar of the bank’s approach to sustainability. It also stems from more companies seeking to advance their corporate sustainability agenda through sustainable financing, especially as the Covid-19 pandemic puts sustainability in the spotlight.
Tan Su Shan, Group Head of Institutional Banking, DBS, said that this “never normal” world has become an opportunity for companies to see how they can tackle an expanding range of environmental, social and governance (ESG) challenges, as well as integrate the social and sustainability agenda into their corporate strategy and business practices.
“We thought our earlier target of SGD20 billion for renewable and other green financing would be a stretch and were greatly heartened at the level of customer interest in moving from business-as-usual mode to adopting sustainability in their strategies. Since Covid-19 hit, many companies have actually doubled down on their ESG commitments and we saw a marked increase in the number of corporate interest in sustainable financing,” she added.
In March 2020, n March 2020, HKSE-listed Link REIT signed a AUD 212 million five-year sustainability-linked term loan with DBS, marking Link’s first sustainability-linked loan following its issuance of USD 500 million green bonds in 2016 and HKD 4 billion convertible green bonds in 2019.
In June 2020, Keppel signed a loan facility with DBS which is the first sustainability-linked loans for Singapore’s energy sector to date and one of the largest sustainability-linked loans in Singapore.
A few short months later in August 2020, Hong Kong Land and DBS agreed to convert an existing five-year revolving credit facility of HKD1 billion into a sustainability-linked loan, with interest rate being indexed against ESG targets.
While in September 2020, Swire Pacific and DBS reached an agreement to convert an existing five-year revolving facility of HKD 2 billion into a sustainability-linked loan, as part of its push towards ESG performance.
With over 100 sustainable financing deals worth about SGD 17 billion completed, the momentum has picked up since 2018 and there are no signs this will ever be slowing down.
Tan added that increasingly, stakeholders also want to understand and measure the value companies create beyond profits and ESG considerations are very much at the forefront now.