JSE-listed woodfibre products and solutions multinational Sappi says its €515-million international revolving credit facility is its first financing facility with sustainability-linked key performance indicators (KPIs) and benefits from the group’s newly developed Sustainable Financing Framework.
The recently renewed international revolving credit facility matures in February 2027 and comprises a consortium of eight relationship banks. It was structured with a margin-adjustment mechanism linked to progress in achieving the KPIs, the company adds.
“The newly adopted Sustainable Financing Framework will be used to guide any sustainability-linked characteristics of future financing solutions,” says Sappi group CFO Glen Pearce.
At the end of July, the company's science-based targets had been verified by the Science Based Targets initiative, or SBTi, building on the strong commitment to the United Nations Sustainable Development Goals.
In a further step, Sappi has moved to create a bridge between its financing and sustainability strategies, thereby confirming the importance of sustainability-linked financing solutions as integral to the company’s overall strategy, Pearce notes.
“Sustainability and moving towards a circular economy underpin Sappi’s business strategy. This first sustainability-linked financing facility is an important strategic step for Sappi and supports our long-term vision to be a sustainable business with an ambitious sustainability strategy,” he says.
The Sustainable Financing Framework was verified by environmental, social and governance (ESG) rating agencies ISS ESG, with a second-party opinion that defines four material sustainability KPIs and provides a basis for future KPI-linked credit and capital market activities.
The KPIs focus on decreasing Scope 1 and 2 greenhouse-gas emissions by 18% by 2025; ensuring that certified fibre supplied to Sappi mills is in excess of 75% every year; reducing landfill solid waste disposal by 15%; and ensuring zero workplace injuries.