Environment & Sustainability
Sappi announces first sustainability-linked financing facility
August 24, 2022 By P&PC Staff
Sappi’s international Revolving Credit Facility (RCF) of EUR 515 million benefits from the group’s newly developed Sustainable Financing Framework.
Sustainability and moving towards a circular economy underpin Sappi’s business strategy. Sappi was included in the JSE SRI Index, the FTSE4Good index, by various ESG rating agencies including the ESG Prime Status from ISS-Oekom as well as third-party forestry and chain-of-custody certification by the Forest Stewardship Council (FSC), Programme for the Endorsement of Forest Certification (PEFC)2 and the Ecovadis Platinum level rating for its North American, European and Southern African regional operations.
Sappi’s science-based targets had been verified by the Science Based Targets initiative (SBTi) recently, building on its commitment to the UN Sustainable Development Goals. As the next step, Sappi is creating a bridge between its financing and sustainability strategies to confirm the importance of sustainability-linked financing solutions as integral to the company’s overall strategy.
“This first sustainability-linked financing facility is an important strategic step for Sappi and supports our long-term vision to be a sustainable business with an ambitious sustainability strategy,” said Glen Pearce, Sappi Group CFO.
He added, “Sappi’s recently renewed international Revolving Credit Facility (RCF) is our first financing facility with sustainability-linked KPIs. The new facility of EUR 515million matures in February 2027 and comprises a consortium of eight relationship banks. The RCF was structured with a margin adjustment mechanism, linked to progress in achieving the KPIs. The newly adopted Sustainable Financing Framework will be used to guide any sustainability-linked characteristics of future financing solutions.”
The framework was verified by ISS ESG with a second-party opinion that defines four material sustainability KPIs and provides a basis for future KPI-linked credit and capital market activities of the group. The KPIs focus on decreasing specific GHG (Scope 1 + 2) emissions by 18 percent in 2025; ensuring that certified fibre supplied to Sappi mills is in excess of 75 percent every year; reducing landfill solid waste disposal by 15 percent; and securing zero workplace injuries (lost time injury frequency rate) for own employees.
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