First it was green bonds and now we are seeing the emergence green credit.
In February, the French food products company, Danone, announced it had introduced environmental, social and governance (ESG) criteria to its syndicated €2 billion credit facility led by BNP Paribas.
The credit facility now includes a credit line adjustment mechanism based on the ESG criteria provided by third-party providers, Sustainalytics and Vigeo Eiris. It means that if the firm is outperforming on two of its major sustainable goals, its coupon will be discounted and if it underperforms, it will pay a premium.
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