SINGAPORE (May 29): DBS announced that Chew’s Agriculture, the local egg producer, has signed a 10-year, $27 million sustainability loan with the bank, marking the nation’s first sustainability-linked loan for an SME in Singapore.
Chew’s Agriculture was formerly a subsidiary of SGX-listed OneApex, which was previously known as Chew’s Group.
The loan was evaluated based on a series of environmental, social and governance (ESG) performance metrics.
Chew’s intends to use the loan for the construction of a new farm with larger cage-free facilities so that hens which lay eggs on the farm will continue to be housed in the most optimum conditions, such as larger litter areas and elevated perches.
According to the terms of the loan, Chew’s will be able to enjoy lower interest rates if it meets Humane Farm Animal Care (HFAC) standards such as providing livestock access to wholesome and nutritious feed, appropriate environmental design, caring and responsible planning and management of livestock, and skilled, knowledgeable conscientious animal care, factors which contribute to more nutritious eggs.
DBS’ sustainability loans will evaluate corporates based on an annual sustainability review report typically assessed by an external independent party, tracking the performance of corporates in terms of governance, environmental and social criteria.
When the borrower meets or exceeds pre-determined ESG targets, the interest rate will then be reduced. Borrowers not only share their commitment to sustainability but are also entitled to a competitive interest rate.
Edvin Lim (image), director of Chew’s Agriculture, says, “Through incorporating HFAC standards, we are not only ensuring the well-being of our layer hens but improving the quality of the eggs that they produce. It is a win-win solution that definitely sets a new benchmark for how we run our business.”
Joyce Tee, Head of SME Banking, DBS Group, says, “With growing awareness of the importance of sustainability, we continue to integrate responsible financing principles into our credit assessment processes and lending activities. We are so encouraged that companies such as Chew’s are building businesses that will leave a lasting impact for the future.”
On Wednesday, shares in DBS closed at $24.85.
