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Majid Al Futtaim, the region’s leading shopping center and leisure pioneer, has signed its second Sustainability-Linked Loan (SLL), structured as a US$1.25 billion Revolving Credit Facility (RCF) linked to the company’s Environmental, Social and Governance (ESG) ) related goals.
First Abu Dhabi Bank (FAB), the largest bank in the UAE, led the transaction as sustainability coordinator and agent. In line with Majid Al Futtaim’s ambitious sustainability strategy, the company has established Sustainability Performance Targets (SPTs), which will be measured annually throughout the life of the plant.
SLL aims to contribute to reducing Majid Al Futtaim’s carbon footprint by reducing its Scope 1 and 2 emissions and implementing LEED certification for its buildings, as well as improving gender diversity within the organisation, to demonstrate its commitment to being a socially responsible employer environmental commitment.
The loan makes Majid Al Futtaim the largest SLL borrower in the region, and the company remains the only “penalty-only” borrower in the region, demonstrating the company’s commitment to real, tangible sustainability goals.
Ziad Chalhoub, Chief Financial Officer of Majid Al Futtaim Holding, said: “Sustainable financial options are an important solution to ensure that the private sector creates a resilient economy and supports development that meets current needs without compromising the future. Today’s announcement continues the continuation of Majid Al Futtaim’s A longstanding commitment to being one of the most sustainable companies in the region and globally.
“With the new SLL, we have further expanded our responsibility for how we finance operations and capital expenditure across the Group. As the second SLL of its kind we have signed in as many years, we are aligning our actions with our long-term strategic objectives Aligned to achieve a net positive business model by 2040.”
Mustafa Al Khalfawi, Head of Global Banking and Global Head of Government, Sovereign and Public Sector, FAB UAE, said: “We are proud to lead this transaction with Majid Al Futtaim and to support a key UAE entity in its ambitious sustainable Development goals. FAB is a leading bank in the region to pioneer innovative sustainable financial solutions, issued the first green bond in the GCC in 2017, and was the first in the UAE to commit to implementing greenhouses across our operations and portfolio A bank with net-zero gas emissions.
“Demand for sustainability-related banking facilities is strong and growing among UAE and GCC businesses, and we are working closely with our clients to drive positive environmental outcomes.”
The structure of the facility is based on three key performance indicators (KPIs), which will be independently assessed annually. The facility’s ambitious KPIs, which are at the core of Majid Al Futtaim’s operations, comply with the Sustainability Linked Lending Principles issued by the Loan Market Association (LMA), as follows:
• Reduce the Scope 1 and 2 emissions intensity of the Majid Al Futtaim portfolio, measured in tCO 2 e/m² managed, in line with the company’s Science Based Target (SBTi) to achieve net positive growth by 2040
• Achieve LEED Gold or equivalent or higher certification for all of its malls by 2026.In addition, the company has set a target to increase the number of shopping malls in Majid Al Futtaim’s portfolio that are LEED Platinum or equivalent by 2027
• Achieve 32% representation of women at the top 3 seniority levels (Board, Executive and Senior Management) by 2027, exceeding the previous 30% target set by the company’s existing SLL – trade arab news agency
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