HSBC Bank (Taiwan) Ltd (匯豐台灣商銀) on Thursday announced that it has approved a two-year sustainability-linked loan (SLL) totaling US$70 million to Uni-President Enterprises Corp (統一企業), which would use the proceeds to achieve four environmental objectives.
The loan is the largest SLL in Taiwan, followed by DBS Bank Taiwan’s (星展銀行) loan of NT$2 billion (US$63 million at the exchange rate at the time) to AU Optronics Corp (友達光電) in May 2019.
HSBC Taiwan offered the capital to Uni-President, as the food-and-beverage conglomerate has set specific plans to improve its environmental, social and corporate governance (ESG), as well as four objectives, and it needs funds to facilitate the plans, HSBC head of global banking Yasunao Nakano told the Taipei Times in an interview yesterday.
Photo courtesy of Uni-President Enterprises Corp
Uni-President’s objectives are to reduce its greenhouse gas emissions, boost its energy efficiency, improve wastewater management and facilitate the generation of more energy from its food waste, Nakano said.
It has transferred from fossil fuels to natural gas to power disinfection processes at its plants and the company is considering biomass energy to reduce its carbon emissions further, with fuel to come from raw waste at its production lines, he said.
It plans to invest more in photovoltaic power by setting up its own solar farms or purchasing solar power from independent generators, Nakano said, adding that it would also consider buying offshore wind power directly from developers.
Uni-President is to invest in new equipment or modify its wastewater treatment procedures to lower its chemical oxygen demand, Nakano said, adding that its reading is below the regulator’s cap of 100 milligrams per liter.
The company wants to improve that figure further, he said.
HSBC Taiwan has set targets for the objectives after negotiating with the borrower, and as in other SLLs, the bank would offer Uni-President lower interest rates if it reaches its targets, he said.
The SLL was the nation’s first to a food company, with previous loans going to electronics companies or industrial manufactures.
“We are confident that more companies from different sectors would be interested in applying for SLLs, as ESG performance has been highlighted among investors,” Nakano said.
The bank has been talking with retailers that plan to do more to help clients recycle packaging materials, he said.
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