Siam Cement Group Packaging (SCGP) has taken out a 5-billion-baht sustainability-linked loan (SLL) from Bank of Ayudhya (Krungsri).

SCGP said the company’s first such loan marked an essential step for both companies to propel sustainable growth in Asean and affirmed their commitment to ESG (environmental, social and governance).

Danaidej Ketsuwan, chief financial officer for SCGP, said that his company had always prioritised sustainability in business operations.

He noted that SCGP and Krungsri shared the same goal of encouraging sustainable business.

“We are delighted to receive support on this SLL, which requires the achievement of criteria on ESG and key performance indicators as agreed to grant the loan approval.”

In addition to being the sole lender of this loan, Krungsri also serves as a sustainability coordinator. The interest rate structure for this four-year-loan is tied to SCGP’s sustainability performance targets (SPTs), where Krungsri can adjust it down annually if the SCGP achieves its specified sustainability goals.

The three SPTs are: reducing greenhouse gas emissions according to the set target; managing water resources by reducing water from external sources; and increasing the sales portion of eco-friendly goods and services with an SCGP green choice label.

Pornsanong Tuchinda, Krungsri head of commercial banking, explained that the bank provides SLL as a solution to create added value for their customers while supporting them in propelling the sustainable business that brings change for Thailand and beyond.

He said that this type of loan also shows that sustainability can increase business opportunities.

“We continue to develop financial products for ESG-related businesses, particularly SLL, as an alternative for our commercial banking customers through the synergy between MUFG’s [Mitsubishi UFJ Financial Group] expertise and network together with Krungsri’s unique strengths,” said Mr Pornsanong.

He said that this SLL demonstrated Krungsri’s confidence in SCGP’s finances and ongoing ESG business operations, as SCGP is among the top leaders in sustainability in Thailand and the region.

“This cooperation will be another important step towards expanding SCGP’s business in Asean, which is in line with Krungsri’s goal to connect customers’ needs across Asean and help them grow, with strong support from Krungsri and the MUFG regional networks,” Mr Pornsanong said.

This deal makes SCGP the first packaging solutions provider in Asean to receive an SLL.

Source: Bangkok Post