Nordic Capital launches ESG-linked credit facility
May 25 2021
Nordic Capital today announced the launch of its first credit facility linked to ESG targets and requirements. The revolving facility strongly underlines Nordic Capital’s ongoing commitment to integrating sustainability into its own business model as well as into its investments. It supports Nordic Capital’s most recent Fund X, which has over EUR 6 billion of investor commitments and the credit facility will now be subject to specific ESG targets. This initiative allows Nordic Capital to take an important stride towards delivering on the key commitments of its Responsible Investment Policy.
Nordic Capital has identified material sustainability Key Performance Indicators (KPIs) and targets in line with the UN Sustainable Development Goals. The new credit facility incentivises strong performance against these KPIs, which cover the material Environmental, Social and Governance (ESG) areas where Nordic Capital has a direct impact, both within Nordic Capital’s own organisation and its portfolio companies. Areas measured include reducing carbon footprint, improving gender equality at board level and demonstrating strong governance.
A penalty/reward mechanism is built into the revolving credit facility such that failure to uphold a top tier UN PRI scoring on ESG performance in the annual UN PRI assessment will increase the cost while conversely achieving ambitious, industry-leading ESG targets reduces the cost of the facility. Nordic Capital’s Fund X portfolio is now subject to these targets.
This syndicated facility is a first for some of the signatory banks. Nordea acted as the Sustainability Coordinator and Citi acted as Arranger. The facility is aligned with the Sustainability Linked Loan Principles, published by the LMA, APLMA and LSTA.
Nordic Capital’s Responsible Investment Policy makes key commitments to its stakeholders to integrate sustainability considerations into the investment process as well as encouraging portfolio companies to strive for long-term continuous improvement on sustainability matters.
Kristoffer Melinder, Managing Partner, Nordic Capital Advisors, comments:
“As a private equity investor and owner of businesses, Nordic Capital enjoys the privileged position of being able to make a strong positive contribution to society at large. We are therefore delighted to announce that Nordic Capital Fund X has launched an ESG Revolving Credit Facility, its first credit facility linked to ESG targets and requirements. With this, Nordic Capital is reinforcing its commitment to building successful and sustainable growing businesses and further integrating sustainability into its own business model and Fund investments.”
Elin Ljung, Director of Communication and Sustainability, Nordic Capital Advisors, comments:
“This first ESG-linked credit facility marks an important milestone in the delivery of Nordic Capital’s responsible investment strategy. The targets have been calibrated to demonstrate and encourage an ambitious and industry-leading approach to sustainability in portfolio companies, directly addressing important areas that impact the world we live in. Sustainability lies at the heart of Nordic Capital and it is great to be working with banking partners to drive ESG ambitions forward.”
Helena Hedman, Director Fund Finance, Nordea, comments:
”We want to congratulate Nordic Capital on demonstrating leadership within sustainable finance. With this Sustainability Linked facility Nordic Capital commits to improving the sustainability performance of the companies they invest into whilst at the same time ensuring a strong internal governance on responsible investments.”
Katarina Janerud, Communications Manager
Nordic Capital Advisors
Tel: +46 8 440 50 50
About Nordic Capital
Nordic Capital is a leading private equity investor with a resolute commitment to creating stronger, sustainable businesses through operational improvement and transformative growth. Nordic Capital focuses on selected regions and sectors where it has deep experience and a long history. Focus sectors are Healthcare, Technology & Payments, Financial Services, and selectively, Industrial & Business Services. Key regions are Europe and globally for Healthcare and Technology & Payments investments. Since inception in 1989, Nordic Capital has invested more than EUR 17 billion in close to 120 investments. The most recent fund is Nordic Capital Fund X with EUR 6.1 billion in committed capital, principally provided by international institutional investors such as pension funds. Nordic Capital Advisors have local offices in Sweden, Denmark, Finland, Norway, Germany, the UK and the US. For further information about Nordic Capital, please visit www.nordiccapital.com
“Nordic Capital” refers to any, or all, Nordic Capital branded funds and vehicles and associated entities. The general partners of Nordic Capital’s funds and vehicles are advised by several non-discretionary sub-advisory entities, any or all of which are referred to as “Nordic Capital Advisors”.