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    German RWE sets incentives to meet ESG goals

Summary

Failure to meet its self-imposed targets will benefit non-profit organisations.

by: William Powell

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German RWE sets incentives to meet ESG goals

Germany's RWE has used the extension of its €5bn ($6.1bn) syndicated credit line to link the longer-term €3bn tranche to environment, social and governance (ESG) performance criteria, the company said May 18. The loan conditions were adjusted unilaterally and will hit RWE if it fails to meet its self-imposed targets.

These will reflect the share of RWE's renewables portfolio in the generation fleet; the reduction of the CO2 footprint of RWE’s assets; and the share of sustainable investments in the total investments according to the taxonomy criteria of the European Commission.

If RWE fails to meet its targets, it will notionally incur higher interest payments and commitment fees, half of which will go to non-profit organisations. The syndicated credit line is provided by an international banking consortium of 27 banks. Banco Santander acted as sustainability coordinator for this transaction.