Thursday 19 March 2020

Forestry firm UPM signs €750m climate-linked revolving credit facility

Finnish forest industry company UPM has signed a €750 million (£688m) revolving credit facility with a margin tied to long-term biodiversity and climate targets.

It claims to be among the first companies to have linked the pricing mechanism of a syndicated revolving credit facility to both biodiversity and climate targets - the key performance indicators (KPIs) in question are the achievement of a net positive impact on biodiversity in the company’s own forests in Finland and a 65% reduction in carbon emissions from fuels and purchased electricity by 2030 from 2015 levels.

Tapio Korpeinen, CFO of UPM, said: "Connecting UPM’s sustainability performance to our financing demonstrates the importance of responsible business practises to our long-term value creation. Sustainable forest management plays an important role in mitigating climate change, as it ensures material long-term carbon dioxide sequestration and improves adaptation to global warming.

"Enhancing biodiversity is not only about preserving forests but is also a crucial element in sustainable industrial use, taking into account a wide range of flora and fauna. UPM is committed to achieving a net positive impact on biodiversity and we have developed indicators and methods to monitor it."