UAE-based retail giant Majid Al Futtaim (MAF) has raised a USD 1.25 bn sustainability-linked loan (SLL), the company said yesterday. This is the company’s second second SLL and will be linked to sustainability performance targets set by the company through a revolving credit facility.

Advisors: First Abu Dhabi Bank led the transaction and acted as the company's sustainability coordinator and agent for the SLL.

Where’s the money going? MAF will use the loan to implement measures to reduce Scope 1 and Scope 2 emissions and achieve LEED certification standards across all its malls. The Leadership in Energy and Environmental Design (LEED) is a global standard awarded to energy-efficient and environmentally-friendly buildings.

It’s not the first SLL for Majid Al Futtaim: The retail giant raised USD 1.5 bn for its first sustainability-linked loan back in August 2021, according to a company statement.

REMEMBER- Sustainability-linked bonds may not always push ESG standards forward: We’ve mentioned previously that a majority of sustainability-linked bonds currently on the market in Europe and the West are tied to weak, irrelevant or already-achieved climate targets, according to Bloomberg analysis. If firms fail to meet the targets they set out for themselves, they repay the capital they amassed from investors with financial penalties on top. Companies get cheaper financing and a green reputation while not really holding up their end of the bargain.