Eurazeo’s €1.5bn credit facility to be linked to ESG

Any savings the Parisian firm makes on fees related to ESG performance will be put into environmental projects, says Eurazeo CFO Philippe Audouin.

Philippe Audouin, Eurazeo
Philippe Audouin, Eurazeo

Eurazeo has secured a €1.5 billion credit line which is “indexed against ESG performance criteria,” the firm announced on Thursday.

This is the first time a credit facility in EMEA has been linked to ESG, although a similar agreement was reached on a much smaller scale last year in Asia between Dutch banking group ING and Singapore-based Quadria Capital. Singapore-based Quadria took up the $65 million facility for its second fund, which required the firm to meet certain sustainability targets in order to have its interest rates reduced.

The conditions of Eurazeo’s credit line require the firm to take the savings it makes by fulfilling certain ESG criteria and put it into projects to reduce greenhouse gas emissions. Equally, failing to reach the sustainability targets agreed upon will result in additional fees for the firm, which the banks will also direct to such projects.

Speaking in a press release, Eurazeo’s CFO Philippe Audouin said, “We are also very proud to see Eurazeo become the first capital investment firm to put in place an agreement to redirect a portion of the fees to ESG projects. Eurazeo has long been a pioneer in its market, having integrated CSR considerations into all stages of its investment process back in 2008. As a catalyst of transformation for business, the capital investment market is ideally placed to make a significant contribution.”

The credit line is a renewal of a facility with a consortium of 13 banks, including JP Morgan, Citibank, Goldman Sachs and BNP Paribas, and has been increased from €1 billion. The €18 billion AUM firm has the option to extend the renewal by an additional two years, subject to lenders’ approval.