Prudential Financial announced that it is more deeply integrating its environmental, social and governance (ESG) commitments into the company’s liquidity framework through the renewal of its five-year $4 billion credit facility, which now links the company’s borrowing costs directly to its progress in achieving its sustainability targets. The credit facility is provided by a consortium of 22 leading global financial institutions, with BNP Paribas and Bank of America serving as Co-Sustainability Structuring Agents and JPMorgan Chase as Administrative Agent.

The credit facility, the first of its kind for a major U.S. insurer, includes a pricing structure which adjusts Prudential’s borrowing cost based on the company’s success in reducing greenhouse gas emissions as well as increasing the diversity of its senior leadership.

“We are committed to ensuring that sustainability runs through everything we do,” said Margaret “Peggy” Foran, chief governance officer and corporate secretary for Prudential Financial. “This transaction is another important step forward to integrate our ESG and liquidity framework, and to ensure greater accountability around our commitments for all of our stakeholders.”

The sustainability-linked revolving credit facility includes terms which incentivize Prudential to achieve previously stated commitments including:

•     Reducing domestic greenhouse gas emissions.
•     Increasing the diversity of senior leaders.

These targets align directly with Prudential’s Global Environmental Commitment to reduce domestic emissions, and with one of three inclusion & diversity (I&D) talent goals outlined in the 2021 Proxy Statement. Furthermore, the company’s I&D goals drive progress toward the Nine Racial Equity Commitments announced one year ago.

“We continually look for opportunities to align our liquidity framework with Prudential’s broader commitment to sustainability,” said Nandini Mongia, treasurer of Prudential. “This credit facility is the natural next step in our journey.”

The transaction extends Prudential’s industry leadership position in sustainable finance transactions. In March 2020, the company issued an inaugural green bond of $500 million, representing the first green bond issuance of its kind by a major U.S. life insurer.