① Palm Ventures’ Material Issues & Potential KPI ② KPI Selection ③ SPT

SPT Calibration
Calibration &
& Benchmarking
Benchmarking
Instruction: The Sustainability-Linked Loan Principles (SLLP) describes Sustainability Linked Loans (SLLs) as a facility that looks to improve the borrower’s sustainability profile over the term
of the loan. It is intended to complement and enhance a borrower’s existing sustainability strategy by aligning loan terms to the borrower’s performance which is measured using one or
more sustainability KPIs.
From careful assessment of Palm Venture’s Sustainability Report, pre-prepared excel KPI list and relevant desktop research, understand Palm Venture’s overall posture on sustainability and
identify ESG issues that are most material to Palm Ventures’ business. Accordingly, suggest appropriate KPIs that can be used to drive and measure the company’s sustainability progress,
including units of measurement where applicable.

Company Background
Background: [Key Activities of the Company]
fOverview: [Some Company Specific Information to Establish Operating Scale: Annual Turnover, Number of Employees, Number of Clients, Number of Offices, Annual Energy Expenditure, Annual Capital

Expenditure, etc.]
Key Areas of ESG Focus: [Overview of Company’s Current Areas of ESG Focus]

Material Issues Considered Potential KPIs

Palm Ventures Material Issues, as extracted from
sustainability report:
1. [Example] Sustainable Supply Chain (p.5) • [Example] YoY% increase in suppliers receiving human rights awareness training (%)
• [Example] Increase in suppliers with/adopting NDPE Policies (%)
• …

2.
3.
…

Other material issues/categories considered based on

industry benchmarking:
1.
2.
3.
…
① Palm Ventures’ Material Issues & Potential KPI ② KPI Selection SPT
③ SPTSelection
Calibration&&Benchmarking
Benchmarking
Instruction: With the selection principles in mind, narrow down your list of potential KPIs to no more than five KPIs that would be most impactful in the design of a Sustainability-Linked Loan
for Palm Ventures, with corresponding justification to support your selection.
Note: There is no minimum number of KPI/SPT in a SLL. It is the scale of impact (as guided by the selection principles) that we are looking for.

Selection Principles Selected KPIs for SLL

The SPTs identified, as measured by
predefined KPIs must be:
1. Materiality 1. [Material Issue]
• [KPI shortlisted]
Relevant, core and material to the client’s
• Justification:
overall businesses and stakeholders, as
well as consistent with the overall 2. [Material Issue]
sustainability strategy • [KPI shortlisted]
• Justification:

2. Additionality 3. [Material Issue]

• [KPI shortlisted]
Enable the client to go the extra mile and • Justification:
achieve better sustainability performance
4. [Material Issue]
• [KPI shortlisted]
• Justification:
3. Data Availability & External Verification
5. [Material Issue]
Data is measurable or quantifiable on a • [KPI shortlisted]
consistent methodological basis • Justification:

2
① Palm Ventures’ Material Issues & Potential KPI ② KPI Selection SPT
③ SPTSelection
Calibration&&Benchmarking
Benchmarking
Instruction: The process for calibration of the SPT(s) per KPI is highlighted as key step in structuring the sustainability-linked loans by the SLLP, since it will be the expression of the level of
ambition the borrower is ready to commit to. Careful assessment and benchmarking are to be done to ensure the meaningful KPIs selected previously are appropriately anchored by
ambitious SPTs that are:
• Consistent with the borrower’s overall sustainability/ ESG strategy;
• Represent a material improvement and is beyond the normal trajectory;
• Are compared to a benchmark or an external reference;
• Is to be determined on a predefined timeline, set before or concurrently with the origination of the loan.

Key Considerations
• [Key resources considered #1]
• [Key resources considered #2]
List 2-5 key resources considered in setting realistic, achievable and ambitious KPI and SPTs, e.g Global/Industry standards, Company’s existing sustainability strategy

KPI SPT
Baseline (2021) 2022 2023 2024

KPI #1 SPT #1 (Current company levels) Targeted

2022*
Improvement by Targeted
2023*
Improvement by Targeted
2024*
Improvement by

KPI #2 SPT #2.1

SPT #2.2

KPI #3 SPT #3

*Note: Targets presented are for illustration purposes only. The assessment of targets should be based on deliberation and mutual understanding with client, taking into careful consideration historical data in order to determine targets that are
realistic, achievable and ambitious.
References
(1)
(2)
(3)
① Palm Ventures’ Material Issues &
Potential KPI
• Material ESG Issues Identified:
• • Deforestation & Biodiversity Loss
• • Supply Chain Transparency
• • Labor Rights & Fair Wages
• • Community Land Rights
• • GHG Emissions from Peatlands

• Potential KPIs:
• • % Reduction in land area deforested annually
• • % of supply chain traceability to mill level
② KPI Selection
• Selected KPIs for SLL & Justifications:

• 1. Deforestation-Free Commitment (% of hectares under NDPE policy)

• - Central to reputational and operational ESG risk

• 2. Supply Chain Traceability (% of FFB traced to origin)

• - Enhances transparency and accountability

• 3. Labor Welfare Compliance (% workforce under RSPO or equivalent)

• - Promotes ethical working conditions
③ SPT Calibration & Benchmarking
• SPT Targets (Illustrative):

• 1. Deforestation-Free Area: 100% under NDPE by 2027 (Benchmark:

RSPO Best Practice)
• 2. FFB Supply Chain Traceability: 90% traceability to farm level
(Benchmark: Nestle, Unilever)
• 3. RSPO Labor Certification: 100% workforce covered (Benchmark:
RSPO Labor Standards)
• 4. GHG Emissions Reduction: 20% reduction from 2022 baseline
(Benchmark: IPOP)
• 5. Land Conflict Resolution: 100% disputes resolved within 12 months