With a $2.4 billion financing package, including a $1.8 billion Secured RCF and Term Loan A-1 tied to its sustainability performance, industrial packaging products and services company Greif recently completed its first sustainable finance transaction.
Greif was evaluated via an EcoVadis ESG score, which focuses on four items: environment, ethics, labor/human rights, and sustainable procurement. In this, Greif was granted a gold rating – the highest ranking – putting the company in the top four percent of companies assessed worldwide. EcoVadis has maintained that same ranking since 2018, but this was the first time that ranking was used to help it finance.
“We see the sustainability linked loan (SLL) as a great example of ‘The Greif Way’ in action,” said Ana Carolina Oliveira, ING America’s head of sustainable finance. “It is Greif’s commitment to sustainability values and standards directly connected to finance. What makes this SLL particularly special is the ability to switch the structure to customized sustainability targets later on. As Greif is continually pushing for greater sustainability performance, the structure allows the loans to evolve and track with that ambition.”
ING Capital LLC worked with Greif as its sustainability structuring agent. Together, they decided to include an option to switch to internally set key performance indicators at later stages of the process to allow the company some flexibility as it advances on sustainability targets.
“We are pleased that ING supported us in securing this innovative finance agreement, demonstrating confidence in our continued commitment to reducing the environmental impact of our products and operations, and contributing towards a more circular economy,” Tony Krabill, treasurer for Greif, said. “Earlier this year, we published our 13th consecutive annual sustainability report and will be announcing our new sustainability targets for 2030 in the near future.”
At about the same time, Greif also received a new MSCI ESG rating: AA. This rating system measures companies’ management of financially relevant ESG risks and opportunities, so investors and customers have some insight into their sustainability performance. Though the scale goes up to AAA, no companies in the containers and packaging industry have achieved that top mark.