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Fund Finance Friday | Industry Conversations

EQT Discuss Their ESG Capital Call Facilities

Feb 12, 2021
EQT Managing Director Adam Larsson and Debevoise & Plimpton Partner Thomas Smith discuss the implementation and challenges of ESG capital call facilities. Topics include negotiating KPIs, managing ESG compliance, retrofitting ESG financing, and predictions for the future of ESG financings.
29:39

Podcast summary created with Snipd AI

Quick takeaways

  • EQT implemented market-leading ESG-linked subscription line financing with KPIs focused on gender equality, renewable energy, and sustainable governance.
  • EQT's decision to implement ESG-linked financing aimed to drive positive change in portfolio companies and align financing with their values and strategy.

Deep dives

Overview of the Financing with ESG Links

Adam Larson, managing director at EQT, and Tom Smith, a partner at Debevoise & Plimpton, discuss the market-leading ESG-linked subscription line financing implemented by EQT. The financing includes two credit facilities: one for the equity fund and another for the infrastructure business line. These credit facilities have KPIs focused on gender equality on boards, renewable energy, and sustainable governance. The pricing mechanism of the financing is designed to incentivize portfolio companies to improve their ESG performance.

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