Brickmaker lands £170m ESG-linked loan

Northampton-headquartered brick and concrete manufacturer, Forterra, has landed a £170m Sustainability Linked Loan (SLL) coordinated by HSBC UK and funded by a syndicate of five banks.

The new facility refinances Forterra’s existing bank loan as an SLL, which has been jointly funded by HSBC UK, NatWest, Bank of Ireland, Virgin Money and Banco de Sabadell.

The SLL contains specific Environmental, Social and Governance (ESG) targets, which include: the reduction of CO2 emissions in Forterra’s clay brick business; increasing the percentage of employees in “earn and learn” positions, where employees combine study with practical experience to gain the knowledge and skills required to pursue their career; and a commitment to reducing the group’s overall plastic consumption.

Ben Guyatt, CFO at Forterra, said: “We have an ambitious, long-term sustainability strategy in place and this new facility is a very positive step for us in support of our goals. By securing a Sustainability Linked Loan, we have greater liquidity to reinvest in our sustainability initiatives over time, as we focus on reducing our carbon impact and plastic consumption whilst positively benefiting our employees.”

Richard Bacon, rlationship director at HSBC UK, said: “Forterra operates as a market-leader in an industry that relies heavily on energy consumption to deliver its products. This new deal will help Forterra reduce its environmental impact whilst creating new, positive opportunities for its employees.

“Sustainability has become a strategic priority across the construction industry, with many businesses firmly focused on building a more sustainable future. We expect to see greater adoption within the industry as leading construction businesses invest in their sustainability strategies.”

Forterra launched its sustainability pillars of People, Planet and Product in 2019. These include a commitment to becoming net zero carbon by 2050, improving the environmental impact of Forterra products and providing greater opportunities to employees.

Chris Dowling, head of industrials at Bank of Ireland, added: “Bank of Ireland is delighted to continue its support for Forterra with a new Sustainability Linked Loan. The SLL helps strengthen Forterra’s ability to invest in and focus on the delivery of its ambitious long-term sustainability strategy.”

Paul Mitchell, relationship director at NatWest said: “We are really proud and excited to have been able to support Forterra with this new credit facility. This transaction is an example of NatWest’s commitment to supporting companies such as Forterra on their sustainability journey.”

James Oliver, senior director at Virgin Money said: “Virgin Money is thrilled to support Forterra with its ongoing growth ambitions though support with the multi banked Sustainability Linked Loan. The ESG metrics that the Group are putting in place are similarly aligned to own values and purpose which we believe are central to everyone’s role and responsibility.”

Gary Casey, senior banker at Banco de Sabadell said: “We are very happy to support Forterra plc in the next stage of its development. We understand and fully support the group’s wider sustainability strategy and look forward to supporting them as they progress these important goals in the medium term.”