Corporate Impact | March 11, 2024

Blue Earth Capital inks sustainability-linked loan for Asia’s garment sector

Jessica Pothering
ImpactAlpha Editor

Jessica Pothering

ImpactAlpha, March 11 – Asia’s garment sector, which feeds global fast-fashion demand, is notorious for human rights and environmental abuses. Q Collection is beefing up environmental, social and governance practices at garment factories in Bangladesh with a $30 million debt package from Swiss impact investor Blue Earth Capital.

Q Collection will get preferential loan terms if it meets certain social and environmental targets. The Singapore-based company will use the financing to build manufacturing facilities powered by rooftop solar, rainwater harvesting techniques and additional energy efficiency equipment. The sustainability-linked loans will help Q Collection “create more jobs for underserved communities, while contributing to a more sustainable garment manufacturing sector,” the partners said in a statement.

Sustainability-linked loans have lagged globally despite a surge in the sustainable bonds market. The Sustainability-Linked Bond Principles and other frameworks respond to market skepticism about the effectiveness of the approach in improving ESG performance.

The Q Collection deal is the first sustainability-linked loan in Blue Earth Capital’s $1 billion portfolio.