Carlyle’s US$4.1B ESG-linked credit facility is first-ever exclusively tied to board diversity
Image credit: Sora Shimazaki/Pexels
Global investment firm The Carlyle Group has secured the largest ESG-linked
private equity credit facility in the US for $4.1 billion and the first to
focus exclusively on advancing board diversity. Carlyle structured this
revolving credit facility for its Americas corporate private equity funds, with
the price of debt directly tied to the firm’s previously set goal of having 30
percent diverse directors on the boards of Carlyle-controlled companies within
two years of ownership. Carlyle’s own board falls just short of that 30 percent
goal.
Carlyle says it will continue its efforts to work closely with portfolio
companies to achieve its 30 percent board diversity goal, with measurable KPIs.
Over the past three years, Carlyle’s research has shown that the average
earnings growth of its portfolio companies with two or more diverse board
members has been approximately 12 percent greater per year than companies that
lack diversity, underscoring the correlation of board diversity with strong
financial decisions and performance.
DEI and sustainability: The ROI of inclusive corporate cultures
Join us as leaders from the Accomplis Collective, Bard, Beneficial State Foundation, ReEngineering HR and REI share best practices for cultivating a culture of belonging and insights into how inclusive leadership can lead to more effective and equitable sustainability outcomes — Wednesday, Oct. 16, at SB'24 San Diego.
“In today’s accelerating world, we are improving outcomes with an innovative
financing vehicle for our corporate private equity funds that directly supports
the firm’s ongoing commitment to increasing board diversity as part of our
integrated approach to building better businesses,” said Carlyle CEO Kewsong
Lee. “As one of the world’s leading global investment firms, we have a
significant opportunity to drive both growth and impact in an aligned way as we
create long-term value for our companies, investors, shareholders and
communities.”
The RCF is led by Bank of America and backed by a consortium of leading
global financial institutions.
“Carlyle has long held the belief that diverse perspectives lead to great
investment decisions, and this facility marks a tremendous milestone in our
strategy to find opportunities at the intersection of financial performance and
impact,” said Kara Helander, Carlyle’s Chief Diversity, Equity and Inclusion
Officer. “We’re excited about the opportunity ahead to incorporate this facility
into our multi-faceted approach to drive better results across our spheres of
influence.”
US$10.1B sustainability-linked revolving credit facility to help AB InBev advance progress on 2025 goals
Image credit: Nitin Sharma/Pexels
Meanwhile, Anheuser-Busch InBev recently announced the successful signing of
a US$10.1 billion Sustainability-Linked Loan Revolving Credit Facility (“SLL
RCF”), which replaces its existing $9 billion revolving credit facility.
According to Bloomberg NEF, the milestone-setting facility is the largest
SLL RCF in history and the first syndicated facility of its kind among publicly
listed companies in the alcohol beverage sector. The five-year facility
incorporates a pricing mechanism that incentivizes improvement in the following
four key performance areas, which are aligned with and contribute to the
company’s 2025 Sustainability
Goals:
-
Further improving water efficiency in its breweries globally, supporting its
water stewardship goal;
-
Increasing recycled PET content in PET primary packaging, contributing to
its circular packaging goal;
-
Sourcing purchased electricity from renewable sources — toward its RE100
commitment to secure 100
percent of its purchased electricity from renewable sources by 2025; and
-
Reducing GHG emissions as a part of its science-based climate-action goal.
The above goals form part of the criteria influencing the margin of the SLL RCF,
which demonstrates that sustainable business is good business. Embedding
sustainability into AB InBev’s financing strategy strengthens internal and
external alignment to the company’s Better World agenda.
“We are excited by the further integration of sustainable finance principles
into the capital markets, and welcome the opportunity to embed these practices
deeper into both our finance organization and the broader company,” said CEO
Fernando Tennenbaum. “Our business is closely tied to the natural environment,
and it is imperative that we continue to strengthen our leadership in addressing
the increasing threats of climate change. Our business and our communities
depend on it.”
The SLL RCF is provided by a consortium of 26 leading global financial
institutions, with ING and Santander acting as Joint Sustainability
Coordinators.
“This major sustainability-linked loan is an important milestone for both AB
InBev and the beverage sector as a whole,” said ING CEO Steven van
Rijswijk. “AB InBev has demonstrated a clear ambition level by
incorporating a broad set of material sustainability targets into this core
lending facility. I'm proud that ING is supporting AB InBev toward their
goals with this sustainable financing structure, and at the same time
implementing our strategy to help our clients to address climate risks and
steer towards a circular economy.”
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Sustainable Brands Staff
Published Mar 1, 2021 1pm EST / 10am PST / 6pm GMT / 7pm CET