Best Arranger of Green and ESG-Linked Loans – Crédit Agricole CIB
Crédit Agricole CIB has long been one of the leading pioneers of sustainable finance. It was the only European bank involved in the creation of the Green Bond Principles in 2014 and has since led more green, social and sustainable bonds than any other investment bank.
Such leadership has its strategic advantages, including CACIB being able to leverage its expertise “on the bond side to talk to our clients about expanding into sustainability on the loan side,” says Lucie Campos Caresmel, head of EMEA corporate loan distribution & global sector coordinator for ESG.
CACIB has done so to great effect, and to such extent it was recognised by the market, winning the Best Arranger of Green & ESG-Linked Loans category in the GlobalCapital poll.
Pivotal to CACIB’s success in helping to grow sustainability products across the bank has been the structure it has put in place. At the core sits the sustainable banking team (SBT), a 16-strong group of experts in the field, while every product – such as corporate syndicated loans – has its own ESG coordinators. The structure, which was put in place in April 2020, means that there are champions for ESG that are steeped in understanding of the products and are able to call on the expertise of the SBT to, for example, advise on the detail of appropriate key performance indicators (KPIs) on a sustainability-linked loan.
It relies on a team effort, but one that has strong buy-in from management, says Campos Caresmel. “I think there is something in the culture at CACIB that is very cooperative and where people are excited to learn and to share.”
But while the momentum behind the sustainability-linked product was building in the early part of 2020, both externally where borrowers were increasingly interested, and internally where CACIB was putting the structure in place, the onset of the Covid pandemic clearly meant that corporates had more urgent priorities.
“It took the wind out of our sails a little,” says Campos Caresmel. “Corporates obviously wanted to focus on liquidity and I wondered what it meant for discussions around sustainability at the time but once we emerged from the initial rush, ESG came back even stronger.”
While more companies are now taking the time to discuss ESG options with their bankers, not all ultimately result in a deal. But that doesn’t mean that the discussions haven’t made an impact. “When a company comes to the loan market it has many objectives other than green,” she says. “The ESG strategy of the company evolves at its own pace – they have to define targets and priorities and that happens on a different timeline to a loan.”
Campos Caresmel adds: “You can’t rush KPIs, but what’s great about working with the syndicated loan product is that it’s flexible – the company can work internally and when it’s ready it can easily come back and amend its existing facility to include the sustainability features.”
Campos Caresmel cites a revolving credit facility for Fluxys, the Belgian natural gas grid and storage operator, as a case in point. Last September, CACIB was sustainability coordinator for the amendment of the €400m revolving credit facility, which introduced a sustainability-linked margin into the loan.
CACIB has also taken sustainability coordinator roles on a raft of some of the year’s biggest transactions across Europe, including the groundbreaking €1.5bn four year social RCF for Association pour la gestion du régime de garantie des créances des salariés (AGS), a French agency that supports employee salaries when employers go out of business.
“What we’re doing is helping clients formulate not just the structuring of the loan but the communication around it,” she says. “Today relationship lenders would most likely still do the loan without the KPIs, but the KPIs, and the communication around them, provide clarity on the sustainability strategy of the borrower. They are very attentive to the choice of KPIs and becoming less shy about asking questions – which is a great development. All in all, lenders increasingly expect such indicators.”