With the mission of “Driving supply chain efficiency, Making finance more inclusive”, SY announced the Social Financing Framework and Sustainability-Linked Financing Framework in August 2022. The frameworks will help SY to further integrate its business development within the practice of corporate social responsibility and sustainability by supporting the high-quality and sustainable development of substantial industries including infrastructure and healthcare, and firming up financial inclusion to address the capital needs of the underserved SMEs. Meanwhile, the announcement of the frameworks will promote the Group’s own sustainable development with more diversified and efficient financing channels. In line with the international best practices, the frameworks will urge the Group to improve the sustainability management and financing strategies to enhance its sustainability performance.
Social Financing Framework
SY launched the Social Financing Framework in August 2022, establishing a governance mechanism for the future issuance of social bonds, loans and other debt instruments. Debt proceeds raised by the Group under the Social Financing Framework will be used towards SMEs lending and essential services projects in order to i) improve SMEs’ access to capital and facilitate their integration into supply chains; ii) provide financing support for SMEs affected or damaged by natural or health disasters; iii) enhance the connectivity and digitalization in China, including but not limited to by building and developing infrastructure and public utilities, as well as other public facilities; and iv) developing and providing healthcare and sanitation services.
Leading independent rating agencies Morningstar Sustainalytics and SusallWave have respectively provided second party opinions on the alignment of the Social Financing Framework with the Social Bond Principles 2021 published by the ICMA and the Social Loan Principles 2021 published by the LMA.
Sustainability-Linked Financing Framework
SY launched the Sustainability-Linked Financing Framework in August 2022, establishing a governance mechanism for the issuance of sustainability-linked bonds, loans and other debt instruments. Under the Sustainability-Linked Financing Framework, the financial and/or characteristics of the sustainability-linked loans or bonds granted to or issued by the Group will be driven by the progress of predefined sustainability performance targets (“SPTs”). These characteristics are separately prescribed in the corresponding financing documents. The SPTs set by the Group include i) increasing the total disbursement amount of loans facilitated to SMEs every year; ii) increasing the quantity of paper saved from digital and online business platform every year; and iii) increasing the total hours committed to charitable activities every year.
The Sustainability-Linked Financing Framework does not have any restrictions on the use of proceeds. SusallWave has issued a second party opinion on the Sustainability-Linked Financing Framework which confirms that the Sustainability-Linked Financing Framework aligns with the Sustainability-Linked Bond Principles 2020 published by the ICMA and the Sustainability-Linked Loan Principles 2022 published by the LSTA.