To ensure that its environmental commitments are met, Tata Communications has implemented a sustainability-linked loan (SLL) framework for all upcoming long-term debt financing.
The initiative, which is the first of its kind in India, demonstrates the company’s commitment to sustainability leadership and ethical business practices.
Loans that follow the SLL framework, as opposed to conventional loans, have margins that are linked to particular carbon emission reduction targets (or non-financial covenants), which encourages ongoing sustainability performance improvement.
In a communique to the BSE, Tata Communications said that it hopes to bring about significant change and strengthen the integration of the Tata Group’s overall sustainability goals with its own capital structure by directly connecting its loan margins to environmental impact.
Additionally, the approach’s transparency and accountability are meant to draw capital from investors who share the company’s commitment to environmental responsibility and sustainability.
By linking SLL margins to measurable targets, it demonstrates a commitment to quantifiable results, allowing stakeholders to track progress and recognize milestones.
Kabir Ahmed Shakir, Chief Financial Officer, Tata Communications said: “Sustainability isn’t just a buzzword for us — but a core principle that drives our business decisions. Adopting a holistic approach through the SLL framework underscores our commitment to making tangible progress towards a more sustainable future while driving responsible growth in our industry.”
It must be noted that Tata Communications’ broader commitment to promoting positive change throughout its supply chain and operations is reflected in its adoption of the SLL framework.
The Science Based Targets initiative (SBTi) has validated the company’s emissions reduction targets, and the company has committed to becoming Net Zero by 2035 across its global operations.
