The infrastructure solutions company Costain Group has announced it is “accelerating its ESG( Environmental, Social and Governance) ambitions” after securing an £85 million sustainability-linked revolving credit facility coordinated by HSBC UK and Lloyds Bank.
Crédit Industriel et Commercial and National Westminster Bank are the other participants in the sustainability-linked facility.
The business will receive a margin adjustment on its funding, which is structured in line with the Loan Market Association’s Sustainability Linked Loan Principles, for achieving a set of sustainability targets. These relate to the business’s reduction of greenhouse gas emissions, increasing the amount it spends with small businesses and voluntary, community and social enterprises within its supply chain, and improving gender diversity and inclusion within its workforce.
The company says these targets are all core to Costain Group’s strategy and Climate Change Action Plan, which includes a commitment for net zero operational emissions, including within its supply chain, by 2035. The business has also committed its 3,000-strong car fleet to being electric or hydrogen fuelled by 2030. Costain’s recently completed work on a major new road scheme in Preston (pictured) saved more than 6000 tonnes of CO2 via initiatives such as keeping the removed material on site and reusing it for landscaping around the new roads.
HSBC UK and Lloyds Bank acted as joint sustainability coordinators on the transaction, which is a role that supports an organisation to incorporate sustainability mechanics into its financing. Lloyds Bank acted as the sole documentation coordinator, supporting the company with the structuring and execution of the facilities while managing the bank group to deliver the refinancing.
Clive Marks, group treasurer at Costain Group, said: “We’re committed to creating a more sustainable and inclusive sector and we are pleased to have the support of HSBC UK and Lloyds Bank as we do this. As one of the leading companies in our industry, it’s important that we take a prominent role in tackling key issues around ESG and we look forward to meeting our ambitious targets.”
Max Jones, director in Lloyds Bank’s infrastructure and construction team, said: “One of the construction industry’s biggest challenges surrounds the transition to net zero and we hope that others will make the same great effort as Costain Group to install positive change. We’ve supported Costain Group for more than 80 years and we’re proud to work with them through this next extremely important chapter. We look forward to seeing the positive change they will bring to the industry.”
Since 2014, Costain Group has operated a supply chain academy, delivering more than £800,000 of social value to hundreds of small businesses and nearly 8000 people. The academy provides free training to help small businesses meet the minimum criteria to successfully tender for business opportunities with Costain, and to navigate a complicated contractual landscape.
Costain Group says it strives for a workforce that is inclusive of the communities in which it operates. The business, which boasts 50% female representation on its board, and 62% female representation across its executive team, continues to implement new initiatives to improve representation at all levels.
(Picture – Costain)