Nokian Tyres refinances with €100 million sustainability loan
Emit less gas in the workplace, be nice to others, be safe – and save money by doing so. Sound like a good idea? Nokian Tyres thinks it is, so much so that the company has signed a sustainability linked loan agreement with the OP Corporate Bank. The 100-million-euro loan with a five-year term is being used to pay off a similar-sized loan that is due in May.
Sustainable financing is trending rapidly around the world, and Finnish companies are showing increasing interest in this type of loan agreement. Financing that is linked to sustainability goals is a way for companies to match their finance strategies even more closely together with corporate sustainability. This makes the goals of corporate sustainability more concrete.
The margin of the loan will increase or decrease dependent on Nokian Tyres meeting three sustainability key performance indicators:
1. Commitment to the indicators defined according to the Science Based Targets initiative, which has been created to lower greenhouse gas emissions.
2. Auditing the human and labour rights in natural rubber processing plants.
3. Reducing workplace accidents.
”All three areas require more steps forward. Reaching our targets means continuous improvement”, says Teppo Huovila, vice president Quality & Sustainability at Nokian Tyres.
Concrete targets linked to financing also help the financiers to have a meaningful discussion on sustainability and supporting the progress of these targets together with clients.
”The loan agreement of Nokian Tyres is an example of the way the bank and the company can together support the advancement of the sustainability goals. As a financier the banking sector has an essential role in advancing sustainable finance, and OP Corporate Bank is actively involved in supporting its customers in reaching their sustainability targets”, says Katja Keitaanniemi, president and chief executive officer of OP Corporate Bank.