Dealflow | February 18, 2021

Carlyle Group secures ESG-linked credit tied to board diversity goals

Roodgally Senatus
ImpactAlpha Editor

Roodgally Senatus

ImpactAlpha, February 18 — Carlyle Group has secured a $4.1 billion line of credit from a consortium led by Bank of America. The three-year line of credit is one of the largest ESG-linked loans in the U.S.

The interest rate on the credit facility will be tied to Carlyle’s goal of having at least 30% diverse representation on the boards of Carlyle-controlled companies within two years.

Carlyle said companies with two or more diverse board members see annual earnings growth 12% higher than peers without diversity at the board level.

The financing vehicle gives the firm “a significant opportunity to drive both growth and impact in an aligned way,” said Carlyle’s CEO Kewsong Lee

Sustainability-linked loans

The Renewables Infrastructure Group will get a lower interest rate on its three-year, £500 million ($663 million) line of credit if it meets ESG milestones, such as helping more homeowners switch to clean energy, improving worker safety, and supporting community finance. In September,

Dallas-based Aligned closed a $1 billion sustainability-linked credit facility tied to impact targets, including reaching 100% clean energy by 2024 (see, “An incentive for companies that deliver on sustainability: lower-cost capital”).