Monday, 24 June 2024

Ghim Li obtains $11.7M SLL from OCBC using ESGpedia

5 min read

OCBC has successfully extended a SGD 16 million ($11.7 million) sustainability linked loan (SLL) to global textile and apparel manufacturer, Ghim Li, through a streamlined process on the ESGpedia platform developed by STACS, one of the leading environmental, social, and governance (ESG) data and technology solutions companies in Asia.

The streamlined process involves digital collection of data on ESGpedia via the ESBN Asia-Pacific Green Deal digital assessment, which is then independently verified by global leader in testing, inspection and certification services, Bureau Veritas, an ESGpedia marketplace partner. The streamlined process arose from the ESCAP Sustainable Business Network (ESBN) Asia-Pacific Green Deal for Businesses programme that was launched on ESGpedia in May 2023. It provides a digitalised and simplified self-assessment tool that helps companies report simplified ESG and operational metrics and provides them an automated calculation of their GHG emissions, localised to multiple countries in Asia Pacific.

This enables businesses and small and medium-sized enterprises (SME) to leverage digitalisation to get started on their sustainability journeys and makes it easier for banks to extend SLL to businesses more efficiently.

Global issuance of SLLs have surged in recent years against counterparts like green bonds and loans. The structure of SLLs linking loan terms and interest rates to pre-established key performance indicators (KPI) or sustainability performance targets offers a dynamic mechanism and layer of accountability to drive businesses towards enhancing their ESG performance.

SLL extended by OCBC Bank to Ghim Li, facilitated by ESGpedia

Leveraging the streamlined process on ESGpedia, Ghim Li successfully obtained a SGD 16 million ($11.7 million) SLL from OCBC. This will add to OCBC’s sustainable financing portfolio, which stood at SGD 47.4 billion ($34.9 billion) as at 30 June 2023. It also demonstrates Ghim Li’s commitment to integrate sustainability in its business and operations.

As a Silver badge achiever of the ESBN Green Deal digital assessment, Ghim Li has completed the ESBN Green Deal assessment through ESGpedia. To ensure that the data disclosed by Ghim Li is accurate, Bureau Veritas digitally verified the data through ESGpedia. OCBC then worked with Ghim Li to set the sustainability performance targets of the SLL.

Ghim Li will continue to utilise this platform in subsequent years to submit their operational data, so as to monitor their emissions and track their progress on the sustainability performance targets.

Linus Goh, head of global commercial banking, OCBC, said: “Digitalisation is a critical enabler for businesses in their pursuit of sustainability. We are glad to partner Ghim Li in this SLL, working with STACS to leverage the digital solutions on ESGpedia to make it easier to track and measure operational and emissions-related data for sustainability reporting. We believe the shift towards sustainability by SME and corporates will accelerate with the increased availability of digital and data-driven tools to support the transition and financing of their businesses.”

Felicia Gan, CEO, Ghim Li, said: "ESGpedia helps to simplify the ESG reporting process and allows for an automatic calculation of GHG emissions to provide Ghim Li with greater insights into our current ESG profile, putting us on the same playing field as other industries so that banks have consistent data across a variety of industries and can measure our sustainability performance targets in Ghim Li’s SLL with OCBC."

Benjamin Soh, managing director, STACS, said: “In order to accelerate Asia’s supply chain transition towards sustainable development, the availability of sustainable financing to SME and businesses plays a pivotal role. Through ESGpedia, we are delighted to have provided digital solutions to streamline and digitally facilitate the entire process of sustainable linked financing for Ghim Li and OCBC on a one-stop platform. This will help SME and banks manage the increasing ESG regulatory requirements and scrutiny today.”

With increasing regulatory requirements across Europe and Asia, SMEs are increasingly expected to manage their GHG emissions through active decarbonisation strategies and energy transition measures. In order to do so, SMEs need access to sustainable financing solutions. Yet, especially in the context of SLL, data acquisition remains a key challenge; without an understanding of their carbon footprint and sustainability profiles, both the SMEs and banks are unable to establish sustainability performance targets.

ESGpedia’s free ESG starter tools, including the ESBN Asia-Pacific Green Deal digital assessment and an automatic carbon calculator thus provide SME with a simple and guided programme to better understand their current GHG emissions and gain greater access to sustainable financing.

With more than five million sustainability data points and 115,000+ company profiles overlaid and standardised by its artificial intelligence (AI)-powered engine, ESGpedia allows banks and corporates to access accurate, consistent and comparable data on one registry, for the purposes of sustainable financing, ESG risk monitoring of portfolios, and monitoring the sustainability performance of companies like suppliers.

Michael Ma, director,  sustainability development, Bureau Veritas, said: “This partnership with ESGpedia Marketplace, where ESGpedia’s clients can seek external assurance for their ESG data, enhances the credibility of ESG disclosures. Bureau Veritas’ role as an independent verifier supports a more efficient, methodical and trustworthy journey towards more sustainable business and a more sustainable world."

Re-disseminated by The Asian Banker

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