1 min read.Updated: 14 Sep 2021, 11:49 AM ISTLivemint
Union Bank of India said it has become one of the first few banks in Asia Pacific region to tangibly demonstrate its commitment towards achieving ambitious environmental and responsible lending, reducing its carbon footprint
Mumbai: Union Bank of India, through its international banking division, has secured a sustainability-linked loan aggregating to total syndicated facility of $1.5 billion with one of the leading trading corporates globally, the state-owned bank said on Tuesday.
Under the facility, Union Bank of India will include three key performance indicators (KPIs) relating to a reduction in greenhouse gas emissions, responsible sourcing of metals and growing renewable power portfolio.
The sustainability-linked KPIs will have to be tested annually and verified by a third-party expert. Under this structure, the interest rate paid by the borrower on the credit facilities will decrease or increase based on the group’s progress on three key performance indicators (KPIs), the bank said in a statement.
By proactively integrating sustainability KPIs into its financing, Union Bank of India said it has become one of the first few banks in Asia Pacific region to tangibly demonstrate its commitment towards achieving ambitious environmental and responsible lending, reducing its carbon footprint, and diversifying its asset base towards renewable energy.
“This facility is at the forefront of innovation in the sustainable finance space and will undoubtedly pave the way for similar transactions in the loan market. It also demonstrates Union Bank of India’s commitment towards climatic changes and efforts to move towards a more sustainable model of lending," the statement added.