CIMB Singapore launches sustainability-linked loan programme for SMEs

CIMB Singapore has launched the SME sustainability-linked loan/financing programme (SME SLL/SLF programme), aimed at providing small and medium-sized enterprises (SMEs) with easier access to sustainable financing and support to attain credible greenhouse gas (GHG) emission reduction.

Traditionally, sustainability-linked financing has been complex and costly due to highly bespoke targets as well as the high costs attributed to carbon accounting and verification. The CIMB SME SLL/SLF programme addresses these challenges by offering a simplified and cost-effective solution that aligns with the globally recognised Loan Market Association’s sustainability-linked loan principles.

Benjamin Tan, head of commercial and transaction banking at CIMB Singapore, said: “Time is of the essence for businesses to embark on sustainable practices with the support of financing. Recognising that SMEs may lack resources and are looking for simpler ways to access SLL/SLF opportunities, the CIMB SME SLL/SLF programme is designed to be simple and self-directed, which means our client is always in control. The experience is also fully digital, complemented by our online business account opening process.”

For the CIMB SME SLL/SLF programme, CIMB is working with STACS, a Singapore-headquartered ESG data and technology solutions company, and Bureau Veritas, a world-leading testing, inspection and certification company. Once Sustainability Performance Targets (SPTs) have been agreed with CIMB, the client will calculate their baseline carbon emissions through ESGpedia, a simple digital platform by STACS that automatically converts operational data like fuel, refrigerant, and electricity consumption to GHG emissions. Upon successful verification of the achieved SPTs by Bureau Veritas, the client will be able to enjoy rebate on their interest/profit rates payable on their loan/financing.

Both new and existing clients can receive a 0.20% rebate on their interest/profit rates for the first 12 months of enrolment, upon successful verification of baseline emissions. From the second year, this rebate can increase to 0.40%, depending on the SPTs achieved.

Benjamin Soh, founder and managing director, STACS ESGpedia, said: “SMEs are facing increasing pressure from their customers, especially in the light of upcoming ESG regulations worldwide. We are deeply privileged to be partnering with CIMB Singapore and providing our ESGpedia digital platform to enable SMEs to achieve their ESG goals as well as get financing benefits from the CIMB SME SLL/SLF programme. On top of that, all participants will also be issued the ESCAP Sustainable Business Network (ESBN) Asia Pacific Green Deal Badge, which will support the SMEs’ amplification of their sustainability efforts and engagements with their customers, suppliers, investors, and financiers.”

Marcus Wa from Inventivo Pte Ltd, a pilot participant of the SME SLL/SLF programme, shared: “The platform is user-friendly and easy to manoeuvre. CIMB’s relationship manager assisted me when I needed some clarifications. I am very pleased that I have now started the sustainability journey for my company. I look forward to improving our carbon emission in the years to come.”

Re-disseminated by  Wealth and Society