Singaporean company secures ‘first-of-its-kind’ TNFD-aligned loan

Published 11:20 on June 25, 2024  /  Last updated at 11:20 on June 25, 2024  / Sergio Colombo /  Asia Pacific, Biodiversity, Other APAC

A Singapore-based real estate company has secured a S$400-million ($295 mln) sustainability-linked loan (SSL), which incorporates targets on biodiversity conservation aligned with the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations.

A Singapore-based real estate company has secured a S$400-million ($295 mln) sustainability-linked loan (SSL), which incorporates targets on biodiversity conservation aligned with the Taskforce on Nature-related Financial Disclosures (TNFD) recommendations.

Claimed to be the first of its kind, the SSL was designed to incentivise City Developments Limited’s (CDL) efforts to advance nature conservation and achieve its environmental, social, and governance (ESG) targets, according to DBS Bank, which will deliver the loan.

“As the importance of biodiversity and ecosystem preservation grows, it is essential that we integrate these considerations into our financial solutions,” said Chew Chong Lim, head of real estate at DBS Bank.

“This first-of-its-kind sustainability-linked loan, aligned with CDL’s TNFD-related targets, demonstrates our commitment to exploring new frontiers in the ESG space.”

Under the agreement, loan criteria incorporate a set of sustainability performance targets identified by CDL for biodiversity conservation, waste management, and water efficiency.

Proceeds will be used for general corporate funding and working capital purposes, including the redevelopment of CDL’s existing assets, said the company.

“We are pleased to partner with DBS in this first-of-its-kind financial solution aligned with our nature-specific climate action targets,” said Yiong Yim Ming, chief financial officer of CDL.

“We aim to enhance our triple bottom line through sustainable development, achieve our net-zero ambitions, and align finance with sustainability performance through innovative capital management initiatives.”

In March, CDL released a sustainability report in line with TNFD recommendations, becoming the first firm in Singapore to do so.

The company’s report identified five potential nature-related impacts, including air pollution from transportation and electricity generation, water pollution through wastewater discharge, soil pollution through waste disposal, and natural resource depletion and habitat loss or fragmentation resulting from property developments.

CDL was among the 320 companies worldwide – five of them from Singapore – that announced their commitment to adopting the TNFD recommendations at the annual World Economic Forum (WEF) meeting held in January in Davos, Switzerland.

The taskforce is set to announce the next cohort of adopters during the ongoing London Climate Action Week.

By Sergio Colombo – sergio@carbon-pulse.com

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