DBS announced that Chew’s Agriculture, a leading egg producer in Singapore, has signed a 10-year, SGD 27 million sustainability-linked loan with the bank. This marks a milestone for sustainable development in Singapore – it is the nation’s first sustainability-linked loan for an SME.
The loan was evaluated based on a series of environmental, social and governance (ESG) performance metrics. Chew’s will 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.
Under the terms of the loan, Chew’s will 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.
As a supplier of 500,000 eggs a day, where 95% of eggs produced is distributed in Singapore, Chew’s is committed to renewing and securing the HFAC certification.
Mr Edvin Lim, director of Chew’s Agriculture, said that eggs are an economical and nutritious staple in most diets and consumers these days are becoming more health and eco-conscious. “As a result, the demand for nutritious eggs produced in the right environment has become even more important. By providing products that are responsibly produced and ethically-farmed, we can ensure that our business keeps up with the expectations of our diverse customer base.
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.”
Ms Joyce Tee, Head of SME Banking, DBS Group said that Chew’s is paving the way for SMEs to incorporate sustainable business practices into their daily operations. DBS expects sustainability-linked financing to increase in the SME sector especially since these financing options incentivise and reward companies to advance their sustainability agenda.
“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.”
For DBS Bank’s sustainability-linked loans, corporates are evaluated 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.
In 2018, DBS became the first bank in Southeast Asia and one of five Singapore-listed companies to be included in the DJSI Asia Pacific. The DJSI Asia Pacific serves as a valuable reference point for investors and companies and consists of businesses that have committed to corporate sustainability practices, and which seek to create long-term stakeholder value.
