Kingspan signs for €700m sustainability-linked loan

The facility is linked to the 12 main targets from Kingspan’s ‘Planet Passionate’ sustainability strategy, which was updated this April. Specifically, Kingspan will benefit from lower interest rates if it delivers against targets on energy, carbon, the circular economy and water stewardship.

On energy and carbon, Kingspan’s overarching ambition is to reach net-zero emissions from manufacturing operations by 2030. Focus areas for delivering this target include scaling self-generated renewable energy, supporting suppliers and sourcing zero-emission vehicles, as well as halving the carbon intensity of primary raw materials by 2030.

Kingspan’s circular economy targets include upcycling one billion PET bottles into insulation by 2025 and achieving zero company waste to landfill by 2030. On water stewardship, the firm is aiming to harvest 100 million litres of rainwater this decade and be operating five ocean clean-up projects by 2025.

Kingspan’s new loan matures in 2026, with the option to extend for a further two years. It is being provided by a syndicate of ten banks but the firm has not disclosed names.

“We are very pleased to complete this financing with a top tier of international banks, who can support Kingspan in all of our key markets, regionally and globally,” Kingspan’s chief financial officer Geoff Doherty said.

“When combined with the Green Private Placement bond of €750m completed in December 2020, Kingspan has arranged €1.45bn of sustainable debt funding over the last six months.”

A busy time for green corporate finance

Following the issuance of $378bn of bonds branded as “green” or “sustainable” in the first quarter of 2021, Nordic bank SEB believes that issuance is likely to exceed $1trn by the end of the year.

A similar forecast from the Climate Bonds Initiative has stated that the market for green, sustainability and social bonds is likely to pass the $1trn mark this year.

Businesses to have issued such bonds in recent months include Body Shop owner Natura & Co, Whitbread, Mercedes Benz’s parent company Daimler and Mastercard.

Sustainability-linked loans are also becoming increasingly commonplace. Aside from Kingspan, 2021 has seen major announcements from the likes of AB InBev, Thai Union and Tesco, which is now also supporting suppliers to follow suit.

Sarah George