Banks support innovative sustainability-linked loan for Sopra Steria
If the French company cuts greenhouse gas emissions, it will use savings on loan margin to finance sustainability projects: if it doesn’t, its banks will fund them.
Sopra Steria, the European technology, consulting and digital services company, signed an innovative €1.1 billion credit line in April, arranged by Crédit Agricole CIB and LCL, a retail bank subsidiary of the Crédit Agricole group.
The annual margin will be indexed to a single non-financial key performance indicator (KPI) targeting a reduction in greenhouse gas (GHG) emissions across the company’s supply chain.
Many sustainability-linked loans incorporate several KPIs, often spanning social and governance as well as environmental targets.
“Sopra Steria has a very robust corporate social responsibility strategy with many social and governance components,” Nathalie Sarel, head of sustainable banking, SME and mid-cap companies at Crédit Agricole CIB, tells Euromoney. “But with this financing, it wanted in particular to highlight its strategy to reach net-zero carbon emissions by 2028 and its SBTi-approved long-term decarbonization commitments.
“It has set ambitious intermediate targets to reduce scope 1, 2 and 3 emissions per employee over the lifetime of the financing.”
Financial institutions are critical players in driving real-economy emissions reductions through investments and lending activities
The Science Based Targets initiative (SBTi), the global body enabling businesses to set emissions-reduction targets in line with climate science, published its Net-Zero Foundations for Financial Institutions paper in April.