Mashreq, a financial institution operating in the MENA region, has reached a significant milestone in sustainable financing by providing its inaugural Sustainability-Linked Working Capital Facility to Chalhoub Group. This development signifies a robust dedication to environmental, social, and governance (ESG) principles and establishes a new standard for sustainable financing in the region.
The sustainable finance product offered by Mashreq is structured around a comprehensive set of key performance indicators (KPIs) for the next three years, encompassing the entire ESG spectrum. It surpasses the objective of achieving net-zero emissions. Chalhoub Group, renowned for its sustainability framework, has received validation of its 10-year science-based targets initiative (SBTi), with the goal of substantially reducing carbon emissions and working towards net-zero by 2040.
Ahmed Abdelaal, the group CEO of Mashreq, has expressed his pride in supporting Chalhoub Group in their sustainability journey and emphasized how linking pricing to ESG performance can encourage more businesses to prioritise sustainable practices. He highlighted that sustainability-linked finance facilities such as this can serve as a catalyst, assisting businesses in aligning their operations with global sustainability standards and driving positive change.
The newly extended facility also includes social and governance KPIs, emphasizing women’s representation in senior leadership and the response rate for the Group’s sustainability supplier scorecard. This exemplifies Chalhoub Group’s strong dedication to ESG and sets a notable precedent for other corporates in the region.
Furthermore, the Group’s commitment is further showcased through strong partnerships with renowned brand suppliers, prime retail locations, efficient logistical infrastructure, and a forward-thinking omnichannel strategy. By strategically investing in brands, new business models, retail technology, and geographical expansion, the Chalhoub Group continues to demonstrate its dedication to sustainable practices.
Joel Van Dusen, the group head of investment banking at Mashreq, emphasized that sustainable finance products are not just the future of financing but are crucial in today’s economic landscape. These solutions champion environmental stewardship and offer corporates a strategic pathway to align with global sustainability benchmarks, creating a ripple effect of positive change across the region. He expressed pride in partnering with Chalhoub Group on their debut sustainability-linked working capital facility, highlighting their commitment to sustainability and setting an admirable example for businesses in the Middle East.
Patrick Chalhoub, group president at Chalhoub Group, expressed pride in the collaboration with Mashreq, stating that it aligns with their long-standing commitment to sustainability and their Net Zero targets. Through this sustainable finance facility, they aim to create additional accountability and drive positive environmental and social impact, emphasizing the importance of collective efforts to achieve ambitious targets.
Mashreq’s commitment to sustainable financing is evident in its target to finance and facilitate $30 billion in sustainable financing by 2030, having already made significant strides by facilitating $1.3 billion in water-related projects. Additionally, the bank aims to drive broader awareness of sustainability-linked financing across various industries, further emphasizing its commitment to sustainable practices.
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