(Bloomberg) -- Baring Private Equity Asia has set up a sustainability-linked loan for up to $3.2 billion as the Hong Kong-based firm plans to boost ESG investments that are gaining popularity around the world.

With initial commitments of about $1.5 billion, the credit facility will be subject to sustainability performance targets in areas such as gender diversity and climate change, according to a statement obtained by Bloomberg News. Baring will pay lower interest rate on the loan if it meets those goals, while using the proceeds to support its investment platform.

Baring will require its portfolio of companies to build a better work environment for female talent to thrive, while also creating a long-term climate strategy to help cut emissions.

ESG targets, known as KPIs or key performance indicators, range from carbon emissions, recycling and women in managerial roles, to customer satisfaction and employees’ work-life balance. Some investors are skeptical about loans linked to ESG goals and want to see companies set ambitious targets that are monitored by third parties. 

Baring’s facility, which closed on Oct. 7, had BNP Paribas SA and Standard Chartered Plc as its sustainability coordinators.

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