Coating manufacturer Teknos has signed a €140M finance agreement with margin linked to its sustainability targets. The three-year loan with two one-year extension options consists of a €55M term loan and an €85M revolving credit facility.
For the first time, Teknos Group has linked sustainability targets to the loan margin, which is adjusted according to Teknos Group’s performance in set sustainability targets. With this, Teknos further strengthens its commitment to sustainability, and to growth that considers environmental, social, and governance aspects.
"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,” said Minna Alitalo, CFO of Teknos Group.
Teknos Group has chosen three indicators to measure its performance: 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. The chosen indicators are in line with Teknos Group’s Corporate Social Responsibility Programme.
"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,” Alitalo explained.
Incorporating sustainability targets to Teknos Group’s loan terms is part of the company’s sustainability work. Mitigating climate change, safety, and managing resource scarcity are central to Teknos Group’s sustainability. Teknos Group builds sustainability in co-operation with its customers, suppliers and other stakeholders.
"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,” Alitalo summarised.
OP acted as co-ordinator and sustainability co-ordinator for the agreement. The mandated lead arrangers and bookrunners were Danske Bank, Nordea, OP and SEB.
