Chinachem Group and Hang Seng Sign HK$ 1 Billion Sustainability-linked Loan Facility for Sustainable Business Development
Chinachem Group and Hang Seng Bank are pleased to announce the signing of a sustainability-linked loan facility totaling HK$ 1 billion to support the advancement of the Group’s sustainability goals. Pictured: Donald Choi, Executive Director and Chief Executive Officer, Chinachem Group (second right); Donald Lam, Head of Commercial Banking, Hang Seng Bank (second left); Chan Kam Por, Chief Financial Officer, Chinachem Group (first right) and Angus Wong, Head of Corporate Banking, Hang Seng Bank (first left).
Chinachem Group (the ‘Group’ or ‘Chinachem’) and Hang Seng Bank (‘Hang Seng’) are pleased to announce the signing of a sustainability-linked loan facility totaling HK$ 1 billion to support the advancement of the Group’s sustainability goals. The arrangement between the Bank and Chinachem reflects the joint commitment to creating a greener future and fostering sustainable development in Hong Kong. Hong Kong Quality Assurance Agency (HKQAA) is serving as independent external reviewer for the facility.
The loan is directly tethered to the Group’s environmental, social and governance (‘ESG’) strategy. As the sole lender and sustainability structuring bank, Hang Seng has developed a tailor-made financing mechanism with interest rate reductions linked to specific sustainability performance targets to incentivise the Group to fulfil a set of ESG metrics. These include reducing water and energy use intensity at its hotels and properties under management and increasing training to further raise staff awareness of sustainability issues and considerations. The loan, which will also be used for corporate funding purpose of the Group’s upcoming green development projects and ongoing sustainability-related working capital and capital expenditures, will greatly facilitate the Group’s journey to continue integrating sustainability into its operations and achieving its CCG3050+ carbon reduction target as part of the transition to a low-carbon future.
The Group has developed a sustainability framework and objectives matching the 17 United Nations’ Sustainability Development Goals by batches, which epitomises the balance between financial return and community responsibility. Earlier this year, the science-based targets (SBTs) set by the Group were officially approved by the Science Based Targets initiative (SBTi). Chinachem Group has become Hong Kong’s second real estate developer to have completed SBT validation with a 1.5°C-aligned target.
Donald Lam, Head of Commercial Banking at Hang Seng Bank said, “Hang Seng has built considerable expertise in sustainable and green financing. We are delighted to be working with Chinachem Group to further its commitment to sustainable development while achieving financing cost benefits. The transition to a greener business model requires strategic investment. Sustainability is an integral part of Hang Seng’s strategy and we are actively involved in the development of sustainable capital markets and the pursuit of environmental betterment to support large corporations such as Chinachem as well as Hong Kong’s SMEs with sustainable financing solutions that incentivise positive change.”
Donald Choi, Executive Director and Chief Executive Officer at Chinachem Group, said “As a developer of ‘Places with Heart’, we strive to create shared value for the community through a ‘Triple Bottom Line’ approach, which balances People, Prosperity and Planet. We have set science-based targets, committed to keeping the magnitude of global warming within 1.5°C. We have also established a carbon emission reduction target CCG3050+, aimed at reducing carbon emissions by over 50% by 2030 compared with the base year of 2020. To support the Group’s business strategy and vision, we launched our Green Finance Framework in 2021 intending to fund projects that will deliver environmental benefits and this is the fourth round of green financing we have arranged. We look forward to working together with other like-minded partners to help Hong Kong’s transition to a more liveable city.”
As a Bank with deep roots in Hong Kong, Hang Seng aspires to become a leading entity to drive ESG in the banking industry, supporting the creation of a sustainable future for the city and future generations. The Bank is committed to being carbon-neutral in its operations by 2030. To this end, Hang Seng has embedded ESG into its strategy, operations, products and services. The Bank is also leveraging its expertise to help customers transition to a greener future and achieve sustainable business growth by tailoring green and sustainable financing solutions for a diverse range of needs. For the first five months of 2022, Hang Seng approved HK$12.4 billion in green loans and sustainability-linked loans in total, representing a year-on-year growth of 196% and almost doubling that for the whole year of 2021. The Bank will continue to explore financing solutions with green and sustainable features to help commercial customers capitalize on opportunities.