Dec 9, 2021 | Weingarten
With support from Helaba Landesbank Hessen-Thüringen, CHG-MERIDIAN has, for the first time, concluded a syndicated loan agreement with a group of savings banks that is linked to ESG criteria. The international technology manager and financing expert, based in Weingarten, Germany, is now applying its commitment to sustainability to the funding of its own operations. The silver rating awarded to CHG-MERIDIAN by sustainability ratings provider EcoVadis forms the basis for the funding model.
The loan is repayable over a period of five years and locks in attractive terms for the refinancing of lease originations by CHG-MERIDIAN. What makes the arrangement special is that the interest rate for this syndicated loan is linked to the company’s EcoVadis sustainability score, which is determined annually based on criteria relating to environmental standards, labor and human rights, ethics, and sustainable procurement.
At present, CHG-MERIDIAN holds a silver rating. This puts the Group in the top 25 percent of all companies assessed by EcoVadis.
“The more sustainably we operate as a funding partner, the lower will be the cost of our loan,” says Ulrich Bergmann, CFO of CHG-MERIDIAN . “Our model combines the best of both worlds and sends a clear message: sustainable business practices are not a burden on business but rather deliver direct benefits.”
Ulrich Bergmann, CFO of CHG-MERIDIAN
CHG-MERIDIAN has close and long-standing relationships with Helaba, the syndicate leader of the transaction, and the participating savings banks in the region in which Helaba operates. In recent years, this network of partners has successfully drawn up and issued similar syndicated loan projects on a regular basis. However, this transaction is the first that takes account of globally applicable ESG criteria.
“The feedback from investors about this new model has been very positive,” says Ulrich Bergmann. “Transitioning to sustainable business practices requires new, creative solutions that integrate sustainability concepts and funding strategies.” Bergmann adds that the significance of this topic for the financial sector was recently highlighted again at the Euro Finance Week, an annual banking industry event that took place in November and featured sustainability as a top agenda item.
Hans-Dieter Kemler, member of the Board of Managing Directors of Helaba, agrees that sustainable funding models provide new incentives: “Issuing and developing loans that are linked to ESG criteria enables us as a bank and funding partner to take on responsibility for the future and promote sustainable business models in a way that serves long-term objectives but is pragmatic at the same time.”
For more than 40 years, CHG-MERIDIAN has been using a business model based on a resource-efficient circular economy. Its wealth of experience informs and inspires the company’s development of sustainable funding strategies. “This is a genuine competitive advantage,” says Ulrich Bergmann. “We are part of the solution and can present ourselves to the capital markets as an innovative partner with a sustainability-oriented mindset.” The provision of this new syndicated loan, and its volume, are a vote of confidence in the company’s sustainability credentials.
At the start of 2021, CHG-MERIDIAN organized its endeavors in this field under a comprehensive sustainability strategy and published its first sustainability report. It has also been operating its own business activities on a carbon-neutral basis since then. In addition, the Group launched carbonZER0 at the start of the year – the first product offering a completely carbon-neutral financing solution for IT infrastructure.