Hempel Linked €1.5 Billion Credit Facilities to Sustainability Goals

Date: 26/04/2022

Hempel amended the company's credit facilities, linking borrowing costs to four sustainability targets. 

On Earth Day 2022, Hempel announced amendments of its EUR 1 billion Revolving Credit Facility and its EUR 500 million Term Loan. From 2022, borrowing costs will be linked to Hempel's sustainability targets.

To help guide efforts to achieve Hempel's sustainability goals, the facility's interest margin will be adjusted based on Hempel's ability to achieve its four sustainability goals, which are:

  • Reduce absolute CO2 emissions for scope 1 and 2 by 90% by 2025 in line with the Science Based Targets 1.5°-degree pathway;
  • Reduce CO2 emissions for scope 3 by 70% by 2025;
  • Reduce landfill waste at production sites by the end of 2025;
  • Reduce and phase out hazardous raw materials (RRMs) by the end of 2025.

“Linking our credit facilities to our ESG KPIs is a further commitment to reaching our CO2 emissions reduction targets. We are proud to have received the support of our banks to rewrite the terms of this facility, incentivising us to achieve our sustainability ambitions,” says Lars Joenstrup Dollerup, Executive Vice President and Chief Finance Officer at Hempel.

“Further to the approval of our science-based targets, we are taking the next step to keep us committed to achieving our sustainability goals. We are integrating sustainability into everything we do at Hempel and tackling our carbon footprint both within our own operations and across the entire value chain,” says Katarina Lindstroem, Executive Vice President and Chief Operating Officer at Hempel. “It’s the natural next step for us to also include sustainability considerations in our financing.”

The following banks have agreed to refinance Hempel’s loans according to the new terms: Nordea, Danske Bank, SEB, HSBC, Unicredit, BNP Paribas, Jyske Bank, BBVA and Commerzbank. Nordea has acted as sole Sustainability Coordinator for the facilities.

“Hempel is taking a leading role in its industry when it comes to sustainability linked financing. The sustainability KPIs that are linked to the loan agreements demonstrate a strong commitment and dedication to sustainability and sets Hempel on a very ambitious trajectory,” says Jacob Michaelsen, Head of Sustainable Finance Advisory at Nordea.

Tags: Hempel