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RS Group Increases ESG Credit
In November 2021, RS launched its ESG Action Plan 2030, “For a Better World.” The goal is to use it to play a key role in addressing some of the world’s biggest challenges – from combating climate change to building engineering skills and innovation potential to promoting diversity and inclusion. RS Group aims to be at net zero in operations directly belonging to the Group by 2030
RS Group signed a sustainability-linked loan (SLL) a few days ago. It is intended to support the company’s commitment to its Environmental, Social, and Governance (ESG) action plan, which extends into 2030.
The distributor has increased an existing refinanced sustainability-linked loan from $362.4 million (£300 million) to $483.6 million (£400 million). Its term has been extended to five years on similar terms to the previous loan, which was agreed upon in October 2021.
The loan is directly linked to the achievement of three targets in the company’s ESG action plan. Specifically, these are the reduction of direct CO2 emissions (Scope 1 and 2 CO2 emissions), packaging spending, and the proportion of women in management.
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RS is pursuing these goals with its ESG action plan
In November 2021, RS launched its ESG Action Plan 2030, “For a Better World.” The goal is to use it to play a key role in addressing some of the world’s biggest challenges – from combating climate change to building engineering skills and innovation potential to promoting diversity and inclusion. “For a Better World” has four goals to be achieved by 2030, focusing on the following: Promoting sustainable operations, advancing education and innovation, empowering people, and acting responsibly.
“We are excited about this sustainability-linked loan,” said Andrea Barrett, VP Social Responsibility and Sustainability at RS Group. “Not only does it eliminate future refinancing risks in these volatile economic times, but it also directly supports our ESG action plan to become an even more sustainable and responsible company. We are proud to have made significant progress against the three ESG KPIs of our sustainability-linked loan.”
The Group will be measured against these three ESG measures.
1. The reduction of direct CO2 emissions (CO2 emissions scope 1 and 2): RS aims to be at net zero in operations directly belonging to the Group by 2030 and across the value chain by 2050. RS has made very good progress with a 50% reduction in Scope 1 and 2 CO2 emissions since 2019/20. These efforts are supported in particular by the use of renewable energies and consistent energy management at the sites. In addition, RS relies on electric mobility solutions for the company fleet.
2. The reduction of packaging intensity (tons/£ million sales): RS aims to reduce packaging intensity by 30% by 2030. In 2021/22, the distributor achieved a 16% reduction compared to 2019/20 as a result of initiatives to reduce and reuse packaging across the group. Key among these are automated packaging machines to produce customized boxes, a switch to recyclable padded Jiffy envelopes, and the replacement of wooden packaging pallets with reusable, environmentally friendly returnable containers for the movement of goods between our European locations.
3. The increased gender diversity of management (percentage of women in management): The 2030 target is to achieve 40% female representation among managers. In 2021/22, RS was 32%. The company is continuously working on initiatives to increase the percentage of women in management positions throughout the Group.
What is a sustainability-linked loan
The prevalence and importance of sustainability-linked loans has increased significantly in recent years. Their purpose is to facilitate and support environmentally and socially sustainable business and growth for companies by providing incentives for achieving predefined sustainability targets.
These targets are measured using sustainability indicators that include key performance indicators or external ratings to demonstrate improvements in a company’s sustainability profile.
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(Featured image by geralt via Pixabay)
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First published in Industrie anzeiger, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
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