Trading and chartering giant Gunvor Group has successfully met sustainability targets linked to a pioneering $725m financing facility.
The company, which also has shipowning interests, became the first commodities group to close such a loan and can now renew for another year, according to auditor PricewaterhouseCoopers (PwC).
The coupon is dependent on the company’s year-on-year improvements in 15 different sustainability criteria.
“We’re proud to have lived up to the challenge set forth by this innovative financing, which Gunvor created with ING Bank,” said Muriel Schwab, Gunvor's chief financial officer.
“Gunvor is already exploring other areas of our operations where we can undertake ‘green’ or ‘sustainability-linked’ financings. There is a lot the trading industry can do in terms of sustainability and the energy transition, and it is a focus of ours at Gunvor.”
Gunvor had to meet key performance indicators that focused on the environment, social impact and governance.
CO2 emissions on the list
These addressed areas like reductions in carbon dioxide emissions, waste and water management, improvements to personnel safety at refineries, and transparency reporting related securing feedstock.
Gunvor received a discount on its interest rate as sustainability targets were met. The rate would have risen had it failed.
The renewal provides for the working capital requirements of the company’s Antwerp and Rotterdam refineries.
"Related savings from the lower interest rate go to supplement funding for Gunvor Foundation, the company’s not-for-profit entity dedicated to philanthropic giving," the trading company said.
Working with ING are DBS Bank, Societe Generale, Credit Suisse, ABM AMRO, Mizuho Bank, KfW IPEX-Bank and China Construction Bank, among others.
Green financing is a growing component of the industry's funding needs.
International Seaways said this week it had become the first New York-listed shipowner to seal a loan package linked to sustainability targets.
Since 2017, Gunvor has amassed a fleet numbering 17 ships through joint ventures.
Its stakes vary from 33% to 50%.
The company has been taking advantage of cheap vessel prices.
In addition, chartering arm Clearlake Shipping has more than 50 tankers on time charter.
