At the end of 2020, Hg was successful in creating and completing a pioneering, diversity-linked financing package to support the acquisition of a recent portfolio company.
Since recent ESG financings have focused on greenhouse gas emissions and Hg’s portfolio companies typically have a relatively low environmental impact, Hg worked alongside lenders to create sustainability criteria more aligned with the firm’s values in diversity, inclusion and other governance items.
The result was a broadening of the traditional definition of ESG to become ESGD (Environmental, Sustainability, Governance and Diversity), thereby including diversity-linked criteria to promote diversity and that, if met, will reduce the annual interest cost for the company.
These criteria include:
- the implementation of internal policies to ensure balanced and inclusive recruitment processes at all levels of the organisation;
- the tracking of diversity statistics including gender, ethnic and LGBTQ+ across all levels of the organisation;
- increasing the ratio of female employees year-on-year;
Goldman Sachs and PSP Investments were the lenders, Goldman Sachs was the arranger.