Teknos has signed a finance agreement which for the first time provides a margin linked to its sustainability goals.
Finnish coatings manufacturer Teknos has signed a € 140 million loan agreement with a margin linked to its sustainability targets.
This is the first time that Teknos links the sustainability objectives to the loan margin, which is adjusted based on the performance of the company’s performance in set sustainability targets. This demonstrates the commitment to sustainability, and to growth that takes into account environmental, social and governance aspects.
The three-year loan with two one-year extension options consists of a Term Loan of €55 million and a revolving credit facility of €85 million.
“A loan linked to sustainability targets is a tangible action to tie sustainability to our finances. It supports excellently Teknos Group’s strategy, in which sustainability has a central role. The financial benefits gained from achieving the targets create an additional incentive for us to strive for sustainability and systematically measure our progress,” says Minna Alitalo, CFO of Teknos Group.
Integrating the sustainability targets into the terms of the Teknos Group loan is part of the company's approach towards sustainability. The mitigation of climate change, safety and the management of resource scarcity are fundamental for the sustainability of the Teknos Group.
The three indicators chosen by Teknos to measure performance are consistent with the Corporate Social Responsibility Program of the Finnish Group and are respectively: Lost Time Incident Frequency Rate (LTIFR), share of volatile organic compounds (VOC) in total raw material consumption and an EcoVadis CSR assessment coverage of Teknos Group’s suppliers.
“These indicators measure Teknos Group’s sustainability work in a comprehensive manner. They measure the safety of our employees, the environmental improvement in our offerings, and the sustainability of our supply chain. These are themes that we have identified to have great importance to our stakeholders as well,” continues Alitalo.
“We are expanding our sustainability value chain by including a new partner to our sustainability work – banks. This reflects our view that sustainability can only be achieved together”, concludes the CFO.