ING closes Ant Group’s $400m sustainability-linked derivative

Ant Group will receive rebates from ING when it achieves its sustainability targets.

ING has closed Chinese tech giant Ant Group’s $400m sustainability-linked derivative (SLD), the Dutch global bank said in a press release.

The SLD is an interest rate swap yield to Ant Group’s sustainability performance. When Ant Group achieves its targets, it is entitled to a rebate from ING. If none of these targets are met, the firm will need to pay back a pre-agreed amount to ING.

The derivative incorporates a two-way incentive mechanism linked to Ant Group’s sustainability performance. The chosen key performance indicators (KPI) address major environmental and social goals set out in Ant Group’s ESG strategy.

To reach its environmental KPI, Ant Group intends to actively apply green computing algorithms - a set of proprietary technologies, to improve server efficiency in its leased data centres and reduce Scope 3 emissions intensity. 

Social impact KPIs are also included in the deal with the intent of leveraging Ant Group’s Alipay user base and ecosystem to encourage more green actions from communities and industries.