Aerospace defense and security company Leonardo, announced today that it has signed a €600 million ESG-linked term loan facility, with terms tied to sustainability objectives, including reductions of CO2 emissions and the promotion of employment of women in STEM.
Sustainability linked loans and securities are an emerging form of sustainable finance instruments, with attributes including interest payments tied to an issuer’s achievement of specific sustainability targets. Under Leonardo’s new facility, a margin adjustment will be activated if specific achievements are made in reducing CO2 emissions through the eco-efficiency of industrial processes, and in the promotion of the employment of women with degrees in STEM disciplines.
According to the company, the objectives linked to these Environmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments. More indicators will contribute to the achievement of the Sustainable Development Goals (SDGs), which are the basis of approximately 50% of the Group’s investments.
Alessandro Profumo, Leonardo CEO, said:
“With the signing of this credit line, 50% of Leonardo’s sources of financing are now ESG-linked. This confirms our commitment to Sustainability, an integral part of Leonardo’s Industrial Plan and Long Term Incentive Plan, and the importance we place on sustainable finance. We are taking advantage of current market conditions to sign this credit line in order to refinance a bond near to the maturity, a further step forward in the Group’s disciplined financial strategy.”
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