GHG Emissions, Finance - May 16, 2022
SNC-Lavalin Extends Credit Linked to ESG Targets
SNC-Lavalin, a professional services and project management company, announces the closing of an agreement with its lenders to replace and extend its existing syndicated credit facilities.
The replacement will result in reduced overall borrowing costs, contingent upon SNC-Lavalin’s achievement of certain environmental, social and governance (ESG) targets - 100% of the savings realized because of the company’s ESG results will be directed towards initiatives that further advance the company’s ESG strategy.
The revolving credit facility is reduced from $2.6 billion to $2.0 billion and available for cash draws and issuances of letters of credit and will be further reduced to $1.8 billion in April 2023. The term loan is unchanged at $500 million.
The credit facilities are structured to incorporate a sustainability-linked loan framework, to align with SNC-Lavalin’s leading ESG initiatives and resulting in borrowing savings upon achievement of certain sustainability performance targets. The relevant targets are aligned with the enhanced targets from the company’s latest Sustainability Report: Our Vision for Engineering a Sustainable Society.
These targets will be based on the achievement of reducing GHG emissions (including Scope 1, 2 and 3) by 60% by 2025, using 2019 as a baseline year and increasing diversity within the workforce, focusing on achieving 25% of women representation in managerial and senior professional roles by 2025.
“Bank lenders and capital markets are increasingly holding companies accountable on how effectively they integrate and deliver on their ESG objectives,” said Ian L. Edwards, President and CEO of SNC-Lavalin, in a statement. “The renewed Credit Facilities allow us to realign our lending requirements to better meet the needs of our business following the introduction of our Pivoting to Growth Strategy and new operating structure, while simultaneously reducing our borrowing costs. By linking sustainability outcomes with our corporate financing strategy, we continue to demonstrate to our clients and various stakeholders that we are committed and accountable to the goals we’ve set and have fully operationalized our greater purpose—to engineer a better future for our planet and its people.”
SNC-Lavalin’s internal carbon reduction targets are in addition to its Engineering Net Zero blueprint, to help clients reduce their carbon emissions, manage climate risk, and build climate resilience within their portfolios.