United Overseas Bank Limited (UOB) is supporting Wilmar International Limited (Wilmar), a leading agribusiness group in Asia, in its ongoing efforts to advance its sustainability agenda through a two-year US$200 million sustainability-linked loan1.
In structuring the sustainability-linked loan, UOB worked with Wilmar to identify a list of performance indicators in areas including corporate governance, carbon emissions, land use and biodiversity, community relations and supply chain practices. The performance indicators will help in ensuring that Wilmar’s operations are socially and environmentally responsible, as the company furthers its commitment to meeting the global demand for food without causing a drain on resources. This is especially important given that the global population is expected to increase to close to 10 billion by 20502.
The interest rate on the loan will be pegged to Wilmar’s achievement of the pre-determined targets that have been set based on the list of performance indicators. Sustainalytics, a global independent provider of environmental, social and governance (ESG) research and ratings will conduct the assessment of whether Wilmar has achieved those targets on an annual basis.
Mr Charles Loo, Wilmar’s Chief Financial Officer, said, “In building a responsible business, Wilmar believes that the pursuit of our sustainability goals must encompass all aspects of our operations including seeking sustainable financing solutions at the corporate level. We are very pleased to have UOB’s support with this sustainability-linked loan which aligns our sustainability and corporate financing strategies. It is important to Wilmar that we continue to improve our ESG performance as the business grows.”
Ms Lim Chen Chen, Head of Group Structured Trade and Commodity Finance, UOB, said, “At UOB, we are committed to supporting clients in their ESG efforts through our deep sector knowledge and suite of sustainable financing solutions. Through our sustainability-linked loan to Wilmar, we are able to help them in their efforts to improve the sustainability of their operations and to meet the present needs of society without compromising the ability for future generations to enjoy the resources we have today. We believe that with our understanding of how businesses can achieve growth more sustainably, we will be able to support more companies in the commodity sector in their efforts to achieve positive outcomes for the environment and society.”
1 Sustainability-linked loans are loan instruments and/or contingent facilities (such as bonding lines, guarantee lines or letters of credit) which incentivise the borrower’s achievement of predetermined sustainability performance objectives. Source: Asia Pacific Loan Market Association. https://www.aplma.com/en/gsl/41
2 According to data from the United Nations. Source: https://www.un.org/development/desa/en/news/population/world-population-prospects-2019.html
