This week, Nokia took a step further and signed a “revolving credit facility with its pricing mechanism linked to the company’s sustainability targets.” In simpler terms, Nokia took a loan which terms are linked with company’s performance in terms of pledged reduction of greenhouse gas emissions.
Nokia’s targets include a 41% greenhouse gas emission reduction of its own operations and a 75% greenhouse gas emission reduction arising from the use of sold products by 2030 compared to the 2014 baseline. The margin of the RCF will increase or decrease depending on Nokia’s progress towards reaching these targets.
If Nokia fails to meet the goals, the interest rate will rise, but if they do meet the goals, the interest rate will be lower. The €1.5 billion five-year multicurrency revolving credit facility (“RCF”) will replace the €1.579 billion revolving credit facility agreement dated 26 June 2015, says the press release.