International private equity firm, Cinven, has agreed its first Sustainability Linked Loan (‘SLL’), comprising a €4bn three-year loan facility with a consortium of banks. The new facility is centred on improving the ESG performance of Cinven Funds’ portfolio companies across a number of Cinven’s ESG focus areas, including climate change, gender diversity and ESG governance. Through the implementation of the SLL, Cinven continues to build on its commitment to ESG and value creation for its investors, portfolio companies and wider society. The SLL is fully aligned with the Loan Market Associate SLL principles. Lloyds Bank is the ESG Co-ordinator of the SLL.

The SLL represents the latest milestone in Cinven’s ESG evolution, which was formalised in 2009 when Cinven became an early private equity signatory to the United Nations’ Principles for Responsible Investment (UNPRI). Cinven has made significant progress in the ensuing years, with recent developments including becoming a founding member to ILPA’s ‘Diversity in Action’ initiative in December 2020, joining the Initiative Climat International (iCI) in March 2021, and, most recently, joining the ESG Data Convergence Project in December 2021. Cinven’s 2021 ESG Review, published in March 2022, sets out a more comprehensive update of key developments in Cinven’s ESG programme.

Allegra Day, ESG Director at Cinven commented:

“We are extremely pleased to have agreed our first Sustainability Linked Loan, which will be vital in helping Cinven’s portfolio companies take their next steps in improving their ESG performance. We believe this is a market leading SLL given its size, its focus on tangible results – such as whether portfolio companies have developed decarbonisation plans aligned to the Paris Agreement – and the broad range of portfolio companies that are within scope of the loan.”

Varun Sarda, Managing Director, Sustainability & ESG Finance at Lloyds Bank added:

“We are delighted we could help Cinven set up their inaugural Sustainable Linked Loan facility. This facility helps Cinven to demonstrate that its ESG strategy is at the heart of how it supports its portfolio companies. This transaction also underlines the pioneering role that the Private Equity sector can play in the sustainable transition, reflecting the growing momentum behind ESG debt in the UK.”