Pact Group, a leader in packaging, reuse and recycling, has converted $420 million of loan facilities into a sustainability-linked loan (SLL), the first transaction of its kind in Australia’s manufacturing sector.
Charles Davis, CBA’s Managing Director Sustainable Finance and ESG, said “We are proud to support Pact coming to market with the first sustainability-linked loan in Australia’s manufacturing sector, and one that looks to drive meaningful change, not only within Pact’s own operations, but also across the manufacturing sector more broadly.”
“Pact’s transaction is a great example of how multiple targets under one KPI theme can be used by a company to drive internal and external outcomes. Pact's recycling target not only focuses on increasing recycled content in Pact's portfolio, but also seeks to increase the amount of recycled material processed on an industry-wide basis, helping to further develop the local circular economy.”
The SLL incentivises four key performance indicators: increasing the percentage of recycled content in Pact packaging; increasing the amount of recycled material processed and distributed to the external market, reducing scope 1 and 2 greenhouse gas emissions and gender pay equality.
Pact Chief Financial Officer Paul Washer said: "Sustainability underpins our overall vision to lead the circular economy and shapes our corporate strategy and day-to-day business decisions.”
The financing will help Pact continue to expand its manufacturing capabilities in Australia, while also making both its own operations and that of the broader industry more circular and sustainable. Commonwealth Bank of Australia (CBA) served as joint lead arranger and joint sustainability coordinator for the SLL.
CBA has previously supported Pact Group with its joint venture to construct Australia’s largest polyethylene terephthalate (PET) recycling facility in regional Australia.