G15 landlord agrees £75m loan with targets linked to diversity of leadership team
A large G15 housing association has signed up to a £75m loan that will see the cost of borrowing reduced if the organisation makes its leadership team more ethnically diverse and improves the environmental performance of homes.
Peabody made the five-year deal with the UK branch of Dutch bank ABN AMRO.
The housing association, which manages more than 104,000 homes since a merger with Catalyst in April, will have interest on the loan reduced if it meets specific environmental, social and governance objectives, including improving the environmental performance of existing homes and building new social and affordable homes to rent.
It must also increase the ethnic diversity of Peabody’s leadership team, representing the first time the housing association has agreed an employee-focused target with a lender.
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The deal follows Peabody’s 12-year, £350m sustainability bond issue in February and is its fourth sustainability-linked facility.
In September the social landlord signed a deal with NatWest that renewed an existing tranche of funding and will see the cost of borrowing reduced if it meets targets that focus on improving the average Standard Assessment Procedure rating, which indicate how energy-efficient a property is, within its stock.
The deal with Peabody is ABN AMRO’s first sustainability-linked transaction in the UK social housing sector.
Anthony Marriott, director of treasury and corporate finance at Peabody, said: “The metrics agreed in this transaction closely align with our new strategic priorities following our merger with Catalyst.
“We are all about people, placing equality, diversity and inclusion at the core of our culture in the new organisation.
“We will take positive steps to ensure the ethnic diversity of our leadership team better reflects the communities we serve in the years to come, and this is reflected in the agreement.”
He added that the organisation is “passionate” about its “sustainability journey”.
“The partnership with ABN AMRO will help us accelerate this as well as supporting the delivery of more affordable homes and placemaking activities in London and the Home Counties,” he said.
Gerben Dragt, UK country executive at ABN AMRO, said: “This new loan includes both sustainability and socially linked metrics that also align perfectly with ABN AMRO’s strong ongoing commitment to sustainability and having a positive social impact.
“The UK social housing sector faces challenges that go to the heart of society in terms of the quality and safety of housing as well as reducing carbon footprint.
“Like in the Netherlands, ABN AMRO can help UK providers improve the sustainability of their existing portfolios and support their journey to net zero.”
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