Finance
More APAC Firms Tap Loans Linking Rates to Sustainable Goals
- Firms signing sustainability-linked loans rise to 18 from 16
- Some question whether it’s ethical to profit on missed goals
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A growing number of borrowers in Asia Pacific are getting loans whose interest rates are linked to meeting sustainability goals, in one of the few bright spots for a corporate lending market depressed by the pandemic.
The market for so-called sustainability-linked loans in Asia Pacific excluding Japan took off in 2017, and borrowers have steadily increased since then: 18 firms signed a total of $7.4 billion of such debt so far in 2020, compared with 16 companies raising $7.5 billion last year, according to data compiled by Bloomberg. Margins on the debt rise when a borrower misses green or social targets.