DBS Hong Kong and Chinese consumer goods giant Haier Group have agreed to a $400 million loan facility linked to environment, social and governance (ESG) conditions, the bank’s first of its kind.
The ESG performance indicator for the loan contributes towards China’s pledge to become carbon neutral by 2060, according to the bank.
“Under the agreement, Haier will commit to reducing its energy consumption per business unit during the loan’s tenor,” the lender said.
The loan facility will be taken up by Haier Smart Home, which develops home interiors that integrate low carbon usage and circulation, energy conservation and emission reduction.
The Haier unit aims to provide customers with more energy-efficient products underpinned by innovation to help tackle climate change.
“Our first ESG-linked loan with DBS Hong Kong demonstrates Haier’s commitment to ESG,” Haier Group vice-president and chief financial officer Shao Xinzhi said.
Haier Smart Home’s second-quarter net profit increased 122% year on year to 3.8 billion yuan, bettering most forecasts.
“We attribute this to stronger-than-expected efficiency gains in China and overseas amid solid revenue growth of 8% year-on-year,” Anita Chu, an equity analyst at CCB International in Hong Kong, said.
- George Russell
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