Mashreq, the financial institution for the MENA region, has offered its first sustainability-linked loan (SLL) in Jordan, in collaboration with Classic Fashion Apparel Industry Limited – setting a new standard for sustainable financing in the region.
The news comes as part of Mashreq’s commitment to sustainable financing as it aims to facilitate $30billion in sustainable financing by 2030. SLLs aim to support sustainable economic activity and growth, with interest rates linked to meeting certain pre-agreed sustainability goals.
Classic Fashion has committed to a set of ambitious Sustainability Performance Targets (SPTs) that will be monitored annually throughout the duration of the loan. These Key Performance Indicators (KPIs) are a reflection of the company’s robust sustainability strategy.
Specifically, it hopes to significantly reduce GHG emissions by transitioning to clean energy, with a particular focus on harnessing solar power for its manufacturing operations. Recognising water scarcity as a pressing issue in Jordan, Classic Fashion is also hoping to achieve cumulative water savings through innovative water reuse and recycling practices.
Another aim of Classic Fashion is to improve employee engagement and capacity-building. This commitment comes in the form of the Personal Advancement and Career Enhancement programme, which aims to increase the representation of Jordanian employees and enhance their skills, with a primary focus on empowering women in the workforce.
Joel Van Dusen, head of the corporate and investment banking group at Mashreq, commented on the significance of the loan in Jordan: “We are proud to extend our sustainable financing solutions to Classic Fashion. Their proactive approach to integrating sustainability within their operations sets a benchmark not just for the apparel industry but for all other businesses in the region.
“This transaction stands as a testament to Mashreq’s steadfast commitment to ESG and sustainable financing in the region. By intricately linking loan terms to sustainability performance, we are championing a cause that will inspire other companies to embed ESG objectives within their operations, driving tangible and impactful progress.”
Investing in Jordan via its people
Husam Abdel Al, head of sustainable finance and investment banking at Mashreq, also added: “Our strategic collaboration with Classic Fashion goes beyond mere financing.
“By jointly establishing clear sustainability targets, we are ensuring that our shared commitment to ESG principles translates into measurable and impactful outcomes. Through this loan, we aim to catalyse a broader shift towards sustainable practices, setting the precedence for industry-wide change.”.
Sanal Kumar KS, chairman and managing director of Classic Fashion, also explained the importance of SLLs for Jordan: “We view this SLL from Mashreq as more than just a financial agreement. It is a partnership for a brighter future.
“Given the pressing issue of water scarcity in Jordan, and the need for clean energy, the environmental outcomes of this collaboration are profound. But beyond that, thisMashreq loan symbolises our commitment to the broader community and economy of Jordan.
“We are not only addressing environmental challenges but also investing in our most valuable asset – our people.
“Through dedicated training programs, we aim to uplift and develop thousands of our employees, ensuring that the benefits of this partnership ripple throughout the community and contribute to the sustainable growth of our nation.”
Classic Fashion boasts daily production of up to 500,000 garments, and a diverse workforce of 30,000 individuals from various countries underscores their prominence in the industry.