Schroders’ Corporate Credit Facility Linked To ESG

Shanny Basar

Schroders’ corporate revolving credit facility has been converted into an ESG-linked facility, an innovative move which underlines the firm’s commitment to sustainability from a corporate, as well as investment, perspective.

The facility’s pricing will be dependent on Schroders’ performance against three of its ESG Key Performance Indicators (KPIs) which are also disclosed in Schroders’ Annual Report and Accounts.

These include:

  • To reflect Schroders’ membership of the Climate Group and Carbon Disclosure Project RE100 initiative, the percentage of global electricity generated from renewable sources
  • To reflect the Group being a signatory to the Women in Finance Charter, the percentage of women in senior management roles
  • To reflect the Group being a signatory to the United Nations-supported Principles for Responsible Investment (PRI) Initiative, the UN PRI Rating

Schroders will certify its performance against these KPIs on an annual basis, based on disclosures in its Annual Report and Accounts.

If Schroders achieves these objectives, the facility’s borrowing margin will decrease, while the credit facility’s commitment fee will also fall. If Schroders fails to meet these objectives, the borrowing margin and commitment fee will both rise.

Schroders’ Chief Financial Officer, Richard Keers, said:

“Making the revolving credit facility ESG-linked is a further example of our commitment to ESG and further demonstrates how it is embedded in all parts of Schroders where possible.

“Our banks have told us that we are the first asset manager to have reached this type of agreement and are proud to be able to align the credit facility’s ESG KPIs towards our corporate sustainability objectives.

“There is no doubt that ESG is now a vital component of ensuring the success and health of financial markets and business in general.”

The credit facility has also been extended by a year such that it now expires in October 2024. It is available for general corporate purposes and includes six participant banks, with Bank of America being the Agent Bank and Sustainability Coordinator.

Schroders’ commitment to responsible investing has also been recognised with the highest accolade for the fifth consecutive year.

The Principles for Responsible Investment (PRI), an influential United Nations-backed global investor initiative, awarded Schroders with an A+ rating for its overall strategy and governance in relation to sustainable investment. Just 25% of investment managers globally were awarded the A+ rating.

Source: Schroders

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