Wilmar International Limited has partnered with ING to convert a portion of its existing bilateral, committed Revolving Credit Facility of US$150 million with the bank into a sustainability performance-linked loan.

Wilmar says it is the first company in Asia and the palm oil industry to take a loan with interest rate pegged to its sustainability credentials.

The company is working with Dutch financial giant ING to couple its sustainability performance to a loan.

The Singapore-headquartered company has committed to improving aspects of its environmental, social and governance performance. Progress will be measured by Sustainalytics, and if the performance milestones are met, the interest rate
for part of the loan will be reduced for the following year.

Sustainalytics, a leading provider of environmental, social and corporate governance research and ratings, will track the company’s performance for a customized package of different Environmental, Social and Governance (ESG) indicators.

“Sustainability is a priority at Wilmar and we are constantly seeking improvements in our sustainability performance. Our collaboration with ING dovetails Wilmar’s commitment to a responsible business,” said Ho Kiam Kong, Chief Financial Officer of Wilmar.

“We believe that incorporating sustainability metrics into every aspect of our business, from daily operations to corporate financing, is key to creating value for our stakeholders.”

The concept for this sustainability loan heralds a new approach for the green loans industry by encompassing not just environmental, but also social and governance aspects. It is not only aimed at sustainability leaders; by providing a financial incentive, it is also for corporations who are keen to improve their ESG performance.

The concept is also suitable for companies who are at different stages of their sustainability journey as it can be customized according to their requirements.

“We are delighted to bring this innovative sustainability product to our customers in Asia Pacific. We appreciate the commitment and market leadership from Wilmar to get on board with the concept,” adds Gerrit Stoelinga, CEO for ING Wholesale Banking Asia.

“We have a strong pipeline of sustainability deals and will continue to find innovative ways to empower and support our clients in their sustainability journey.”

ING has worked with eight clients in Europe on similar sustainability improvement loans since March 2017. These include syndicated deals with a health technology company, a chocolate and cocoa producer as well as a bilateral loan with a gas and electricity company.