CIMB Singapore has launched a sustainability-linked loan/financing (SLL/F) programme for small and medium-sized enterprises (SMEs), aimed at providing them with easier access to sustainable financing and support to attain credible greenhouse gas (GHG) emission reduction.

Traditionally, sustainability-linked financing has been complex and costly due to highly bespoke targets as well as the high costs attributed to carbon accounting and verification.

The CIMB programme, the bank argues, addresses these challenges by offering a simplified and cost-effective solution that aligns with the globally recognized Loan Market Association’s Sustainability-Linked Loan Principles.

For the programme, CIMB is working with STACS, a Singapore-headquartered ESG data and technology solutions company, as well as Bureau Veritas, a world leading testing, inspection and certification company.

Once sustainability performance targets (SPTs) have been agreed with CIMB, the client will calculate their baseline carbon emissions through ESGpedia, a simple digital platform by STACS that automatically converts operational data like fuel, refrigerant and electricity consumption to GHG emissions. Upon successful verification of the achieved SPTs by Bureau Veritas, the client, the bank explains, will be able to enjoy rebate on their interest/profit rates payable on their loan/financing.

Both new and existing clients can receive a 0.20% rebate on their interest/profit rates for the first 12 months of enrolment, upon successful verification of baseline emissions. From the second year, this rebate can increase to 0.40%, depending on the SPTs achieved.

“Time is of the essence for businesses to embark on sustainable practices with the support of financing,” adds Benjamin Tan, the bank’s head of commercial and transaction banking. “Recognizing that SMEs may lack resources and are looking for simpler ways to access SLL/F opportunities, the programme is designed to be simple and self-directed, which means our client is always in control. The experience is also fully digital, complemented by our online business account opening process.”