Global industrial packaging firm Greif has signed its first sustainable credit and loan agreement worth $2.4 billion. Its sustainability structuring agent ING Capital helped secure the loans by adding an innovative feature to the facility.
Within the package, a $1.8 billion secured revolving credit facility and term loan A-1 were priced according to Greif’s sustainability performance. This was measured by using an EcoVadis Environmental, Social, and Governance (ESG) score, which looks at the performance of the firm in four key areas: environment, ethics, labor, and human rights, as well as sustainable procurement.
The company has held a Gold Rating by EcoVadis since 2018. It ranks in the top 4% of assessed companies worldwide. In addition, it also recently received a AA rating from MSCI ESG rating agency. MSCI ESG ratings assess how a company is managing its financial risk stemming from ESG issues and challenges. Within that database, Greif is in the top 25th percentile.
The credit facility has an innovative feature built in that allows it to switch to internally set key performance indicators at a later stage, adding flexibility to the transaction.
“What makes this (sustainability-linked loan) particularly special is the ability to switch the structure to customized sustainability targets later on,” said Ana Carolina Oliveira, ING America’s head of sustainable finance.
“As Greif is continually pushing for greater sustainability performance, the structure allows the loans to evolve and track with that ambition.”
Greif makes steel, plastic, and fiber drums, as well as intermediate bulk containers, containerboard, recycled containers, recycled paperboard, tubes, and other specialty products. It also produces packaging accessories, filling, and packaging, as well as manages timber properties in the U.S. Greif operates in 35 countries around the globe.
Its sustainability commitments focus on reducing its global carbon footprint. To that end, it plans to reduce absolute Scope 1 and 2 GHG emissions by 28% by 2030 vs. 2019, and complete a Scope 3 assessment. It also strives to determine the feasibility of a long-term net-zero commitment by 2023.
Regarding supply chain management, by 2025, Greif seeks to reduce raw materials and logistical costs by 1%, as well as move from non-green to green material sourcing if it is economically viable.
The packaging company is also working on water and waste management. By the end of 2025, it plans to divert 90% of waste from its production landfills.
“The majority (approximately 95 percent) of our water use occurs in 13 paperboard mills within our Paper Packaging and Services (PPS) business, as paperboard manufacturing is a water-intensive process,” the company said in its 2021 Sustainability Report. “Consequently, our water management efforts primarily focus on these mills to obtain the largest impact possible. Greif strives to use reclaimed water whenever possible in paper production.”
On the ethics and compliance front, Greif has set out three goals for 2025: train all of its personnel with access to a computer on the company’s Code of Business Conduct and Ethics. It also aims to provide training and information on its Anti-bribery Policy, as well as its Fair Treatment of Others Policy.
Other 2025 goals include those focused on talent attraction and retention, human rights and fair labor practices, diversity, equity and inclusion, and health and safety.
