in Asia
Pacific
Taipei,
21 May 2019 – DBS Bank Taipei Branch signed a three-year, NTD 2 billion (SGD
88 million) sustainability-linked loan with AU Optronics, marking a milestone for sustainable development in Taiwan. This
is the first sustainability-linked loan in Taiwan and the first of its kind for
an IT company in Asia Pacific. The loan was evaluated based on a series of
environmental, social and governance (ESG) performance metrics.
DBS is partnering with customers to remain at the
forefront of their industries, as sustainability considerations are gaining
more attention globally. By launching Taiwan’s first sustainability-linked
loan, which pegs the interest rate to sustainability performance targets, the
bank hopes to encourage more customers to build businesses that will leave a
positive impact for the future.
AU Optronics has always been committed to supporting
sustainable development. It has been listed on the Dow Jones Sustainability
Index (DJSI) for nine consecutive years. It is also on the MSCI World ESG
Leaders Index and the FTSE4Good Index. In addition, it has been ranked among
the top 5% in Taiwan Stock Exchange’s Corporate Governance evaluation. AUO has an
excellent performance track record in diversified areas such as corporate governance,
environmental sustainability, science education, culture preservation, social citizenship and inclusive workplace. Being the first to sign the sustainability-linked loan with DBS Bank Taipei Branch, AUO is cementing its commitment to adopting a sustainable approach to business operations and being a role model for Taiwanese companies in this area.
Lim Him
Chuan, General Manager of DBS Bank (Taiwan), said that there is a growing trend
for corporates to adopt more sustainable practices in their business operations.
While seeking business
growth, they are also considering social, environmental and governance factors. In 2018, DBS Group inked four sustainability
performance-linked loans amounting to over SGD 600 million, demonstrating the
bank’s commitment to sustainability while offering financial innovation to
customers.
Tony Luo, Head of
Institutional Banking Group at DBS Bank (Taiwan) said, “The core value of a sustainability-linked
loan is to incentivise and reward corporations to advance their sustainability
agenda.”
For DBS Bank’s sustainability-linked
loans, corporates are evaluated based on an annual sustainability review report
assessed by an
external independent party, tracking the performance of corporates in terms of governance,
environmental and social criteria. When the borrower meets or exceeds pre-determined ESG targets, the
interest rate will then be reduced. Borrowers not only share their commitment
to sustainability but are also entitled to a competitive interest rate.
Luo further
explained that unlike green loans which are used to exclusively finance or re-finance
eligible green projects, capital from sustainability-linked loans can be used
for general corporate purposes. This provides more flexibility to borrowers,
and the impact goes beyond environmental aspects to cover comprehensive ESG
developments of an organisation.
In 2018, DBS became the first bank in Southeast Asia and one of five
Singapore-listed companies to be included in the DJSI Asia Pacific. The DJSI
Asia Pacific serves as a valuable reference point for investors and companies
and consists of businesses that have committed to corporate sustainability
practices, and which seek to create long-term stakeholder value.