Spread Co., Ltd. signed a sustainability-linked loan (SLL) of $4.6 million (600 million yen) with the SHIGA BANK, LTD. on the 27th of December, 2022. The loan is the first SLL for a vertical farming company in Japan.
The loan defines Sustainability Performance Targets (SPT) based on the company’s business strategy, and links lending conditions such as interest rate to the achievement of these targets, thus working as an incentive for strengthening Spread’s commitment towards ESG management.
Spread has set the following SPT for the loan: Firstly, the improvement in the labor productivity at its vertical farms by 30% (in comparison with FY 2018). Secondly, The maintenance of energy consumption per production volume at the level of FY 2021.
Spread’s General Manager of the Corporate Planning Department, Masaki Kushiro, said: “In anticipation of the further growth, following the equity financing last summer, we expect this sustainability-linked loan to be a big step in the promotion of expansion and effective use of indirect financing. As a vertical farming company, we are expected to keep contributing to environmental and social issues. By announcing some of the tasks that we are working on and linking them to economic conditions, the loan allows us to express our intention to achieve corporate growth and social contribution in parallel.”
This loan has been confirmed and obtained a third-party opinion by the Rating and Investment Information, Inc. (R&I), one of the major credit rating agencies in Japan, to comply with the Sustainability Linked Loan Principles outlined by the Loan Market Association (LMA).
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Spread Co., Ltd.