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Tying Main Credit Lines to ESG Goals Becomes a Norm for Europe

European high-grade companies are increasingly linking their primary credit facilities to environmental, social and governance objectives as businesses come under pressure to disclose their sustainability credentials.

This group of firms -- including the likes of brewer Anheuser-Busch InBev SA/NV, appliance firm Electrolux AB, and building-materials maker Holcim Ltd. -- has been adding ESG components to their conventional revolving credit lines, which are typically used for liquidity buffers or general working capital, since the first such deal in 2017. The borrowers will get a discount on their interest rates if they reach agreed ESG targets, or a penalty if they fail.