In a first for the travel and tourism sector within the Kingdom of Thailand, renowned accommodation and lifestyle leader, Minor International, has committed to lower emissions and conserve precious water resources, as part of an innovative sustainability-linked financing deal.
Travel and tourism delivers many benefits, creating jobs, strengthening economies, and reducing poverty and inequality. Yet, these benefits often come at a cost. The United Nations Environment Programme (UNEP) estimates that 1.3 billion tons of waste, or between four and eight per cent of global waste, is produced by tourists every year. When left unchecked, the industry contributes to greenhouse gas emissions, potential land exploitation, water wastage, wildlife disruption and reduced biodiversity.
For Thailand, tourism remains a critical source of foreign exchange, supporting economic and social development. Before the global pandemic hit Thailand, tourism contributed to an estimated 21.9 per cent of GDP in 2019, when arrivals peaked at 39.8 million. As tourists return to the Kingdom, Thailand has an opportunity to balance its economic responsibilities with a more sustainable stewardship of the environment. One company investing in such an approach is Minor International Public Co Ltd (MINT).
A global vision
First founded in 1967, MINT owns, manages and operates a diverse portfolio of over 530 hotels, resorts and branded residences spanning six continents. Its eight brands cover 78,253 rooms. Over time, the company has successfully expanded from an ASEAN-based business, to become a truly global force in travel and lifestyle. In terms of this growth path, a key milestone was the purchase of NH Hotel Group in 2018, which in turn helped MINT secure a wider global profile. NH Hotels (349 hotels in 30 countries) now has the largest presence for MINT, while its most recognised brand is the luxury Anantara brand, covering 49 hotels in 23 countries, the first of which opened in Hua Hin, Thailand in 2008.
To support this growth, MINT has sought to internationalise its financing. Where previously, funding had been mostly raised at a national level, MINT’s growing global presence generated the need to diversify its funding mix. “Since 2017, Standard Chartered has led various strategic and landmark transactions for MINT, including arranging several underwritten loan facilities and perpetual bond issuances – as well as providing support to MINT throughout the COVID-19 period,” explains Chaiyapat Paitoon, Chief Financial Officer of MINT.
The onset of the global pandemic in 2020 brought serious consequences for MINT, as it did for many businesses reliant on tourism and international travel. In response, the company implemented numerous measures to protect its balance sheet and mitigate risks. These measures included cost control, fund raising and divestment. Fortunately, by the second half of 2022, the first waves of arrivals from Europe to Thailand began signalling the green shoots of a tourism recovery for Thailand. MINT had survived one of the travel industry’s toughest tests to date, and could once again resume its plans for the future.
Sustainability loan agreement
To this end, one of MINT’s first priorities was to secure new financing arrangements. With several existing loan facilities fast approaching maturity, Standard Chartered and MINT began discussing the possibility of a new loan agreement. In September 2023, details of that agreement became public, as MINT announced the completion of a €500 million (US$534.3 million) syndicated sustainability-linked loan (SLL) refinancing arrangement.
One unique aspect of this, especially for a hospitality player within Thailand, was the sustainability-linked component of the financing arrangement. As Khun Chaiyapat outlines, for a company with a proud commitment to sustainability, the SLL provided the perfect opportunity to underscore its sound environmental principles and make further progress. “We have set targets to reduce carbon emissions intensity and water intensity for Minor Hotels by 15% and 10% respectively by 2025,” Khun Chaiyapat explains. “To achieve these goals, we are actively exploring the implementation of better technologies and improving our operational practices to minimise our environmental impacts,” he notes.
Wider benefits for Thailand
By successfully securing Thailand’s first sustainability-linked loan syndication within the tourism and leisure sector, MINT has demonstrated that it is possible to mitigate environmental impacts while supporting business ambitions. “We see these measures reducing water consumption, energy usage, and carbon emissions, while simultaneously enhancing the overall guest experience,” explains Khun Chaiyapat. “Our properties are fully committed to the collective effort of reducing carbon and water intensities. We are fostering a culture of collaboration and knowledge sharing, where experiences and lessons learnt are exchanged among our teams. By leveraging this shared knowledge, we can improve faster as a company.”
He sees two clear benefits for Thailand: “The first is the environmental benefits derived from lower resource consumption and carbon. The second is a positive impact on the country’s financial market and investment environment. It serves as a compelling example of how Thai companies can leverage the rapid growth of sustainable finance, directing it toward climate-related investments to enhance competitiveness and support value creation at scale.”
“As a leader in the global hospitality sector, MINT places a strong emphasis on Environmental, Social, and Governance (ESG) principles, which are deeply integrated into our business operations,” he explains. “This Sustainability-Linked Loan (SLL) was strategically designed to align with MINT’s commitment to sustainability through the direct linkage of Key Performance Indicators (KPIs).”
Khun Chaiyapat believes that such commitments are becoming important, particularly as the existential threats of climate change become more apparent. “As the adverse effects of climate change intensify, we will not only experience physical repercussions but also face significant economic challenges,” he notes.
Meaningful commitments
Travel and tourism players serious about making emissions reductions are clear that doing so requires deep investment into reengineering their day-to-day activities. In MINT’s case, notable technologies required include the utilisation of a biogas digester, to convert organic waste into biogas. In addition, the company will pursue the installation of solar panels across its properties, while looking into the use of heat exchangers for bathroom water temperatures. Recognising the urgency of the climate crisis, MINT has further committed to achieving net zero emissions by 2050. “We understand that this crisis requires immediate action and unwavering commitment. This SLL represents one of the measures we are taking to hold ourselves accountable for our climate actions,” notes Khun Chaiyapat.
Plakorn Wanglee, Chief Executive Officer, of Standard Chartered Thailand says that the bank has played a key role in the evolution of Thailand’s banking and finance sector over the last 130 years, and as a globally recognised leader in sustainable finance, the bank is well-placed to help clients make meaningful commitments towards better environmental stewardship.
As businesses in Thailand consider sustainability in their expansion plans, the adoption of SLLs are an effective way to pursue these goals. As Khun Plakorn explains, injecting KPIs around key metrics like carbon emissions and water wastage, can set a perfect example for players in the market looking to reduce the impact of their operations. He believes that such partnerships can serve as a powerful tool for good, especially in tourism-reliant markets. “We as a sustainability coordinator, help to ensure that these goals are relevant, measurable and material. In that sense, our partners demonstrate all the qualities that we as a global financial institution will look for, and that the wider community will appreciate.” “MINT has set out ambitious and comprehensive targets covering the environmental impact of their operations – and we are confident that this will set the tone for more local corporates and institutions to look towards sustainable finance as a key enabler of their net zero journey.”
“Standard Chartered is delighted to partner with Minor International onbits inaugural SLL, an important benchmark for the tourism and leisure sector in the region and for sustainable financing in Thailand. We have a commitment to mobilise US$300 billion in sustainable finance across our global footprint. Examples such as this, demonstrate how we can partner with clients in transitioning their business to more sustainable practices in support of their continued commercial growth.”
