L&T inks $700 mn sustainability trade facility, expands ESG financing

Larsen & Toubro has tied the $700 mn trade facility to emissions and water-use KPIs, reinforcing its carbon neutrality by 2040 and water neutrality by 2035 goals

The Indian multinational conglomerate Larsen & Toubro (L&T) has secured a Sustainability-Linked Trade Facility (SLTF) worth $700 million with Standard Chartered, a global banking group.

 

Earlier in June this year, the company had issued India’s first listed sustainability-linked bond, worth $60 million, under the Securities and Exchange Board of India’s (Sebi) ESG Bond Framework.

 

KPIs tied to emissions and water use

 

The SLTF is linked to key performance indicators (KPIs) such as greenhouse gas emission intensity and fresh-water withdrawal. It is also aligned with the Loan Market Association's Sustainability-Linked Loan Principles, ensuring adherence to market standards for sustainability-linked financing, L&T noted.

 

 

“By securing this SLTF, L&T reaffirms its leadership in driving sustainable business practices. Our long-term targets of carbon neutrality by 2040 and water neutrality by 2035 are strategic imperatives that underpin innovation, operational efficiency and resilience,” an L&T spokesperson said.

 

The spokesperson added that sustainability is integral to the company’s ethos, guiding investments in low-carbon technologies, resource optimisation and biodiversity conservation. “Our robust environmental, social and governance (ESG) performance has bolstered investor confidence, facilitating access to sustainable finance and reinforcing our position as a leader in responsible growth and long-term value creation.”

 

Third-party assurance and market validation

 

The KPIs and targets associated with the SLTF have received a second-party opinion from DNV, a global independent expert in risk management and quality assurance. As part of this structure, performance against the KPIs will be disclosed annually and assured by an independent third party.

 

“Through this financing instrument, Standard Chartered will support L&T on their decarbonisation journey, coming alongside the conglomerate to help facilitate the delivery of key sustainability targets,” said Shobana Chawla, head – sustainable finance origination at Standard Chartered, India. “Sustainability is a strategic focus for Standard Chartered, and we continue to play a role in supporting the development of a more sustainable economy in India.”

 

Commitment to sustainable growth

 

The development underscores L&T’s commitment to sustainable business practices and its continued efforts to expand its sustainable business portfolio, the company said.