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Mashreq Sets a New Benchmark for Sustainable Financing in MEA With Working Capital Facility

Mashreq, a financial institution in the MENA region, has extended to Chalhoub Group its first Sustainability-Linked Working Capital Facility. This debut bilateral facility highlights both entities’ commitment to environmental, social, and governance (ESG) principles. It also sets a new benchmark for sustainable financing in the region.

The Mashreq sustainable finance product is structured around a comprehensive set of key performance indicators (KPIs) for the next three years, spanning the entire ESG spectrum, beyond achieving net-zero emissions.

Chalhoub Group, known for its sustainability framework, received validation of their 10-year science based targets initiative (SBTi), aimed at significantly reducing carbon emissions and paving the way for net-zero by 2040.

Ahmed Abdelaalm mashreq Argentina sponsor
Ahmed Abdelaal, group CEO of Mashreq

Ahmed Abdelaal, group CEO of Mashreq, commented: “This transaction is a testament to Mashreq’s continued commitment to ES­G and sustainable financing. We are proud to support Chalhoub Group in their sustainability journey and believe that linking pricing to ESG performance will encourage more businesses to prioritise sustainable practices. Sustainability-linked finance facilities like this can serve as a catalyst, assisting businesses in the region to align their operations with global sustainability benchmarks and drive meaningful change.”

Chalhoub Group’s dedication to ESG

The facility also includes social and governance KPIs. This emphasises women’s representation in senior leadership and the response rate for the Group’s sustainability supplier scorecard. This move showcases Chalhoub Group’s dedication to ESG as well as setting a precedent for other corporates in the region.

Furthermore, strong partnerships with renowned brand suppliers, prime retail locations, efficient logistical infrastructure, and a forward-thinking omnichannel strategy also exemplify the Group’s commitment. It is strategically investing in brands, new business models, retail technology, and geographical expansion.

Joel Van Dusen, group head of investment banking at Mashreq
Joel Van Dusen, group head of investment banking at Mashreq

Joel Van Dusen, group head of investment banking at Mashreq, added: “Innovative sustainable finance products, such as the one extended to Chalhoub Group, are not just the future of financing; they are pivotal in today’s economic landscape. These solutions champion environmental stewardship while offering corporates a strategic pathway to align with global sustainability benchmarks, creating a ripple effect of positive change across the region. We are proud to partner with Chalhoub Group on their debut sustainability-linked working capital facility, which highlights their commitment to sustainability and sets a commendable example for all businesses in the Middle East.”

Patrick Chalhoub, group president at Chalhoub Group
Patrick Chalhoub, group president at Chalhoub Group

Patrick Chalhoub, group president at Chalhoub Group, stated: “Our partnership with Mashreq marks our first sustainability linked finance facility. We are proud of this collaboration that aligns with our long-standing commitment to sustainability and our Net Zero targets. Our dedication to fostering responsible practices and driving positive environmental and social impact is at the core of our strategies. Through this sustainable finance facility, we are creating additional accountability on our side, founded on our belief that it takes concerted collective efforts to achieve on ambitious targets.

Commitment to sustainable financing

Mashreq’s commitment to sustainable financing is evident in its target to finance and facilitate $30billion in sustainable financing by 2030. The bank has already made significant strides, facilitating $1.3billion in water-related projects.

Additionally, recognising the importance of sustainability-linked financing across various industries, the bank aims to drive broader awareness among manufacturers, retailers, and businesses.

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