This Earth Day, Hempel is “Investing in our planet” and announces amendments to 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 drive efforts to meet Hempel’s ambitious sustainability targets, the facility’s interest margin will be adjusted up or down, based on Hempel’s ability to meet its four sustainability goals.
Hempel’s KPIs linked to its loan agreements are:
- Reduce scope 1 and 2 CO2e emissions - 90% reduction in absolute CO2e emissions for scopes 1 and 2 by 2025 in line with the Science Based Targets 1.5-degree pathway
- Reduce scope 3 CO2e emissions - 70% of direct and indirect spend suppliers screened by 2025 through the Hempel Procurement Sustainability Screening
- Reduce waste to landfill at production sites - Zero waste to landfill from production sites by end of 2025
- Reduce and phase out hazardous (red) raw materials (RRM) - 25% reduction of RRM (kg/1,000L paint produced) by end of 2025
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Nordea has acted as the sole Sustainability Coordinator for the facilities
“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, incentivizing 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.”
Hempel's loans
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 the sole Sustainability Coordinator for the facilities.
“Hempel is taking a pioneering 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.
