The refinanced SLL has increased from £300m to £400m, and its maturity has been extended to five years at similar terms to the previous loan that was agreed in October 2021. It is directly linked to the achievement of three of the company’s most material 2030 ESG actions. These are the reduction of its direct carbon emissions (Scope 1 and 2 CO2 emissions), packaging intensity, and the percentage of management that are women.
RS launched its 2030 ESG action plan - For a Better World - in November last year with the ambition to play a key role in helping to address issues around climate change, building engineering and innovation skills, and championing diversity and inclusion. For a Better World has four goals to be achieved by 2030 focused upon: advancing sustainable operations; championing education and innovation; empowering people; and doing business responsibly.
“We are delighted to have realised this sustainability-linked loan once more,” said Andrea Barrett, VP Social Responsibility and Sustainability at RS Group. “Not only does it remove future refinancing risk during these economically volatile times, it also directly supports our 2030 ESG action plan to be a more sustainable and responsible business - both for our company and our industry. We are proud to have made significant progress against the three ESG KPIs related to our sustainability-linked loan.”
The three ESG actions we will be measured against are:
- Reduction of direct carbon emissions (Scope 1 and 2 CO2 emissions): RS’s ambition is to be net-zero in our direct operations by 2030 and in its value chain by 2050. According to the company it is making good progress with a 50% reduction in Scope 1 and 2 CO2 emissions since 2019/20, supported by a shift to renewable electricity and energy management across its sites and through its electrification of company vehicles.
- Reduction in packaging intensity (tonnes / £m revenue): The company’s 2030 goal is to reduce packaging intensity by 30%. In 2021/22 it achieved a 16% reduction from 2019/20 as a result of initiatives to reduce and reuse packaging across RS. These include automated packaging machines to produce made-to-fit boxes, switching to recyclable padded Jiffy envelopes and replacing wooden packaging pallets with reusable, returnable eco-totes for product movements between our European sites.
- Increased gender diversity of our leaders (percentage of management that are women): The 2030 goal is to have 40% of women in leadership roles. In 2021/22 RS reached 32% and is, according to the company, continuing to work on initiatives to attract and develop more women into senior leadership positions across the Group.
The prevalence and importance of sustainability-linked loans has significantly increased over the past few years.
Their purpose is to facilitate and support environmentally and socially sustainable economic activity and growth for businesses by incentivising the achievement of predetermined sustainability performance objectives. These objectives are measured using sustainability performance targets that include key performance indicators or external ratings that can measure improvements in a company’s sustainability profile.