Singapore: CapitaLand Ascott Trust Secures S$165 Million Sustainability-Linked Loan from OCBC

CapitaLand Ascott Trust (CLAS) has secured a S$165 million sustainability-linked loan from OCBC Bank, marking a significant milestone in its commitment to environmental sustainability. This loan, part of OCBC’s innovative OCBC 1.5°C loan program introduced in 2023, is specifically designed to incentivize corporations to adopt and meet stringent carbon emissions reduction targets that align with internationally recognized net-zero decarbonization pathways.

Under the terms of the loan, CLAS will benefit from reduced interest rates as it meets its annual greenhouse gas (GHG) emissions reduction targets. These targets are closely aligned with the broader environmental goals of its sponsor, CapitaLand Investment (CLI), which has laid out an ambitious 2030 Sustainability Master Plan. CLI is committed to achieving net-zero emissions by 2050 for its Scope 1 and 2 emissions and aims to reduce these emissions by 46% by 2030.

Serena Teo, CEO of CapitaLand Ascott Trust Management Limited, emphasized the integral role of sustainability in CLAS’s operations, highlighting how the trust’s environmental initiatives are closely woven into its overall capital management strategy. Teo noted that with the addition of this loan, CLAS has now secured over S$700 million in sustainable financing, further solidifying its leadership in sustainability within the industry.

Elaine Lam, head of global corporate banking at OCBC, expressed the bank’s strong support for CLAS’s decarbonization efforts. She acknowledged the growing trend among companies in the region to embark on net-zero journeys, setting science-based targets aligned with the Paris Agreement. Lam also emphasized OCBC’s ongoing commitment to engaging with companies at different stages of their sustainability journeys, providing guidance and support to help them transition to a low-carbon future.

The impact of OCBC’s sustainable financing initiatives is evident in the bank’s growth in this sector. As of June 2024, OCBC’s sustainable financing loans had increased by 33% from the previous year, with total commitments reaching S$63.3 billion. This growth underscores the bank’s significant role in driving sustainable finance and supporting the region’s transition towards a more sustainable and resilient economy.