Women in Boardroom Count Toward Companies’ Borrowing Costs

By Jacqueline Poh | Bloomberg | September 3, 2021

Companies around the world are increasingly willing to link their borrowing costs to gender equality, as they face pressure to lift the number of women in management.

Dubai-based mall firm Majid Al Futtaim Holding LLC signed a $1.5 billion sustainability-linked loan last week, agreeing to pay extra in interest rates if it failed to increase the share of women on its board or in senior roles to 30%. That followed Australian supermarket chain Coles Group Ltd. taking a similar step with its A$1.3 billion ($1 billion) loan.

Sales of loans with terms tied to gender goals have surged to $19 billion so far this year, more than four times 2020’s total, according to BloombergNEF data. That kind of growth is exceptional even within the booming market for ethical debt, reflecting the push to factor in social justice taking off since the pandemic and the #MeToo movement.

“Companies are using these products to help drive performance and cultural change in line with their corporate strategies,” said Tania Smith, director of sustainable finance at Australia & New Zealand Banking Group Ltd., which led the deal for Coles. “Improved workplace diversity can enhance staff retention, improve collaboration, enrich decision making and enable access to a wider talent pool.”

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