Siam Commercial Bank (SCB) and PTT Global Chemical PCL (GC) recently demonstrated their unwavering commitment to enhancing their sustainable financial capabilities by signing a “Sustainability Linked Swap” agreement, a first in Thailand’s petrochemical industry.
This innovative deal will see SCB taking account of GC’s performance in promoting a harmonious balance among environmental, societal, and corporate governance (ESG) criteria when determining interest rate adjustments for transactions. Building on the success of the Sustainability-Linked Loan (SLL) in December 2022, this agreement represents an expansion of the bank’s comprehensive range of sustainable financial services.
Dr. Yunyong Thaicharoen, Senior Executive Vice President & Chief Wholesale Banking Offer and Chief Wealth Banking Officer at Siam Commercial Bank, noted that, “Sustainability has emerged as a worldwide priority, and Thailand is no exception. Thai companies have demonstrated their awareness by actively pursuing a combination of business growth and the establishment of a sustainable society.
They achieve this by addressing environmental concerns, embracing social responsibility, and adhering to good corporate governance practices. Siam Commercial Bank is deeply committed to advancing sustainability practice and has made it a key objective in accordance with SCBX Group’s commitment to becoming a Net Zero financial technology group by 2050. To cater to their valued clients, the Bank has created financial products and services that integrate the principles of sustainable finance. These offerings provide customers with alternative options while also promoting social responsibility tailored to their specific business requirements.
The engagement of a major organization like GC in derivative transactions to hedge financial risks demonstrates its commitment to social responsibility and the significance of sustainable business practices. Additionally, this approach assists organizations in cost reduction.
With this transaction, the Bank takes into account GC’s sustainability performance when determining interest rates, while also ensuring complete and transparent disclosure of information regarding GC’s sustainability performance. This collaboration represents yet another significant stride towards advancing ESG principles and reaping the rewards of our unwavering dedication to social responsibility, all with the ultimate goal of fostering a better world.”
Pattaralada Sa-Ngasang, Executive Vice President of Finance & Accounting PTT Global Chemical PCL, said, “ This achievement highlights GC’s firm commitment to fostering change in Thailand and globally, collaborating with partners to achieve zero greenhouse gas emissions by 2050, as outlined in its Together to Net Zero guidelines. Furthermore, GC aims to secure sustainable funding to support its sustainability objectives. By engaging in a Sustainability Linked Swap Agreement with Siam Commercial Bank, the company can effectively reduce financial costs and optimize resource management. This initiative builds upon GC’s previous sustainability credits, ensuring continuous progress towards its sustainability goals.”
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