DBS Bank and property developer Hongkong Land has signed an agreement on August 28 to convert an existing five-year revolving credit facility of HK$1 billion ($176.2 million) on February into a sustainability-linked loan with the interest rate being indexed against environmental, social, and corporate governance (ESG) targets.

Hongkong Land, a member of the Jardine Group of companies, will be eligible to receive a tiered discount on the interest rate of the loan should it achieve pre-determined ESG targets agreed with DBS.

The targets include demonstrating continuous improvement in greenhouse gas emissions, electricity consumption, food waste, and solar energy generation, while maintaining green building certifications for Hongkong Land’s portfolio in Hong Kong’s central business district (CBD).

“This sustainability-linked loan is an important step forward in our journey towards a more sustainable future and reflects both our strategy of integrating sustainability in all aspects of our business, and our desire to support the development of sustainable capital markets in the region”, says Robert Wong, CEO of Hongkong Land.

The proceeds of the loan will be used for general working capital and corporate funding purposes, and to fund ongoing green building initiatives.

As at 4.09pm, shares in Hongkong Land are trading flat at US$3.90, and shares in DBS are trading 31 cents higher, or 1.5% up, at $20.77.