E.Sun, HSBC offer Compal sustainability-linked loans

2021 0125 Esun 01E.Sun Commercial Bank and HSBC Bank Taiwan Ltd have provided sustainability-linked loans (SLL) of NT$2 billion (US$71.9 million) and US$60 million respectively to Compal Electronics Inc, the banks said.

The offer includes lower interest rates if the contract notebook computer maker meets environmental, social and governance (ESG) targets.

Compal has adopted a cleaner manufacturing process, with 87% of its laptops receiving green-label marks, E.Sun said, adding that it would monitor Compal’s efforts to reduce greenhouse gas emissions over the next three years.

Compal plans to use the loans to reduce its carbon emissions and utility consumption, as well as to boost its waste management and use of green energy, HSBC said.

As of the end of June, E.Sun Bank had approved NT$68.7 billion of SSLs, ranking first among all local banks.

The bank has committed to using green power for all offices and operation sites by 2030 and reaching net-zero carbon emission by 2050. HSBC said it had offered US$500 million SLLs as of June 30.

In Taiwan, the largest syndicated SLL so far is LCD panel maker AU Optronics Corp’s NT$50 billion loan provided by 25 banks, while the largest single SLL is ASE Technology Holding Co’s US$505 million loan by Standard Chartered Bank (Taiwan) Ltd.

There are more local companies favoring SLLs over regular corporate loans or green bonds to facilitate their ESG practices, a Financial Supervisory Commission official said yesterday.

Companies in the technology sector face more pressure from clients or suppliers to transition to clean energy compared with those in other sectors, the official added.

Taipei Times

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