Last month, $SINGTEL(Z74.SI)$ announced that Australian subsidiary Optus Finance had inked a A$1.4 billion sustainability-linked revolving credit facility.The interest rate discounts for the revolving credit facility are linked to Optus’ reduction of its absolute greenhouse gas emissions by 25 per cent by 2025, compared with a 2015 baseline. The loan will be used to refinance its existing credit facilities, as well as other general corporate purposes.
This comes a week after the first announcement that Singtel successfully priced its firstdigital sustainability-linked bond in partnership with UOB and private markets platform ADDX. Singtel said it is committed to reducing its scope 1 and 2 greenhouse gas emissions in tonnes of carbon dioxide equivalent by 2025, compared to a 2015 baseline. If this target is not met, the group will make additional investments into defined green efforts of an amount of at least 0.25 per cent of the outstanding aggregate principal amount of the SLB.
Singtel’s recent sustainability efforts come as no surprise as companies strive to gain social license from potential investors through the increased popularity of sustainable investing. With growing concerns of climate change and social issues such as poverty, millennials are putting increasing pressure on large multinational corporations to make a difference in society. As such, large-scale corporations are forking out large amounts of money to improve their business operations and show the public their sustainability efforts. However, to determine whether or not companies are really able to meet their targets of reduced greenhouse gas emissions or they are simply baseless claims, we will have to wait to see.
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