Green finance approach to drive sustainability action at Buro Happold

Buro Happold has signed a Sustainability-Linked Loan (SLL) with its banking partner HSBC that links, for the first time, finance costs to performance against a set of sustainability indicators aligned to the company’s near-term greenhouse gas emissions reduction targets.

The UK Green Finance Strategy includes an objective to align global financial flows with climate and nature objectives. The UK Government estimates that to meet the county’s 2050 net zero commitment, an additional £50-60bn of investment will be needed each year.  SLLs are increasingly being used by banks and their corporate borrowers to drive action on climate and other environmental, social and governance (ESG) targets. 

An SLL includes a discount on the interest rate payable which is applied when the organisation meets a set of annual key performance indicators associated with specific ESG targets relevant to the borrower. Buro Happold has worked with HSBC’s UK Sustainable Finance team to agree a set of ambitious annual KPIs that are directly linked to our global sustainability targets.

The targets relate to emissions intensity from business travel and commuting, Scope 1 and 2 emissions from our offices (gas and electricity use), and engagement with suppliers and sub-consultants to support the reduction of supply chain emissions. A condition of the SLL is that Buro Happold will provide an annual performance report to HSBC, verified by an independent third party, to confirm the achievement of the KPIs.

Sustainable finance

The SLL will provide additional focus on and incentive for action on reducing our operational and supply chain emissions in pursuit of our goal to be net zero by 2045.

The setting of annual KPIs against our near-term targets provides milestones to drive and track performance. The SLL supports our recently launched net zero routemap, ensuring that carbon management underpins all our work and embeds carbon considerations in our finance strategy.

Our experience in working with our banking partner to align financial and sustainability strategies and devise appropriate reporting processes helps us to provide practical advice and support to our clients as part of our ESG advisory services.

Duncan Price, Buro Happold’s global lead for sustainability and climate change, said, “In signing this new Sustainability-Linked Loan we have demonstrated our commitment to aligning our business with our Net Zero and sustainability commitments. This brings our near-term science-based targets to life through the setting of annual KPIs and incentivising action across Buro Happold. We look forward to utilising this experience to support our clients to do the same.”