COFCO International and OCBC launched a $600 million sustainability-linked loan, incentivising emission cuts in soy and corn supply chains through SBTi-validated FLAG targets.
$600 million sustainability-linked credit facility tied to SBTi FLAG targets for 1.5°C climate alignment.
COFCO commits to verified emission reductions for soy and corn
Setting a new standard in sustainable finance, this initiative reinforces COFCO’s decarbonisation efforts.
COFCO International and OCBC have introduced a $600 million sustainability-linked revolving credit facility (RCF) with interest rate incentives tied to the Science Based Targets initiative (SBTi)-validated Forest, Land and Agriculture (FLAG) targets for 1.5°C climate alignment.
This facility sets a new benchmark for sustainable finance in agriculture, emphasising corporate responsibility in emissions reduction.
COFCO International pledged to achieve externally verified annual emission reductions in its soy and corn supply chains. By eliminating deforestation and land conversion, the company qualifies for interest discounts under the Sustainability Linked Loan Principles, ensuring compliance with international sustainability standards.
This transaction, being the first financing facility aligned with SBTi-validated FLAG targets, proves COFCO's commitment to decarbonisation. “We are pleased to support COFCO International with our OCBC 1.5°C loan, the first non-Singapore company to take up this solution which we launched last year to incentivise corporates to set and work towards clear carbon emission reduction targets, aligned with science-based net zero decarbonisation pathways for their sectors," said Elaine Lam, head of global corporate banking at OCBC.
COFCO International has a strong track record in sustainability-linked financing with OCBC, securing a $2.3 billion sustainability-linked loan in 2019 and a $1.6 billion facility in 2022. In those structures, financing deals are anchored by soy traceability, farmer screening and risk management under environmental, social and governance criteria.
The validation of COFCO International's emission reduction targets by SBTi in June 2024 further cements the company's role in advancing sustainability in the agricultural sector. This partnership with OCBC underscores a broader industry shift towards integrating financial incentives with verified environmental impact, setting a precedent for other corporations to follow.