DBS Bank has loaned a Singaporean egg producer, Chew’s Agriculture, SGD 27 million (roughly USD 20 million) for cage-free facilities that will allow its chickens to live a life that is cruelty-free. The farm will optimise production using an automated collection of eggs and keep chickens in optimum conditions.
The innovation here is not the egg farm but the loan: the first of its kind. When the borrower exceeds environmental, social and governance targets, the interest rate is reduced.
It is widely known that the move towards more ethical livestock rearing is critical to achieving sustainable development goals. Bank loans can play a part by ensuring that businesses can invest to meet global sustainability targets.
Could sustainability-linked financing accelerate sustainable business?