UAE-based retail conglomerate Majid Al Futtaim has signed its inaugural $1.5 billion (AED 5.51 billion) Sustainability-Linked Loan (SLL), a financial instrument secured primarily on environmental, social, and governance (ESG) related performance.
The SLL intends to enable and support ecologically and socially sustainable economic activity as well as growth by incentivizing ambitious, predetermined sustainability performance objectives, in line with Majid Al Futtaim’s pioneering sustainability policy.
With over a dozen banks participating in the syndicate, Majid Al Futtaim’s five-year SLL is structured as a revolving credit facility (RCF) and is the region’s largest corporate, non-government-linked SLL and the largest in the MENA real estate sector.
According to the reports, “The Company’s agreement also includes a gender diversity target for women to constitute 30 percent of board members and senior management roles, aligning with the global aims of the 30 percent Club, a first for the region.”
“Majid Al Futtaim continually strives to become one of the most sustainably considerate companies in the world, and this extends to genuine accountability in how we finance our operational and capital expenditures across the Group. The signing of our first Sustainability-Linked Loan comes as a result of, and in line with, our long-term strategic targets, including the production of more energy and water than we consume, reaching a Net Positive business model by 2040. While a company’s profitability is important, how you contribute to sustainability is becoming more crucial and a filter for investors to decide how much and where they will invest. To ensure that you have access to funding – and at attractive rates – in a world where sustainability is becoming more important, it is imperative to embrace this reality now and not be left behind.”
Mr. Mohamed Salama, regional head of client coverage MENA, Standard Chartered Bank said, “We are delighted to support Majid Al Futtaim in their landmark debut sustainability linked loan by acting as sole sustainability coordinator. Having structured the first-ever loan in the Middle East to incorporate sustainability-linked pricing in 2018, we are proud to have brought another pioneering facility to the market.”
One of Majid Al Futtaim’s core ambitions as part of this SLL is to have all its malls certified LEED Gold or better, which would be another first for the region, as per the statement. Furthermore, Majid Al Futtaim Properties’ hotels were the region’s first to receive LEED Platinum certification across its 13-hotel property portfolio earlier this year.