Carlyle secures $4.1 billion ESG-related credit facility

Carlyle Group has obtained a first-of-its-kind $4.1 billion ESG-related credit facility for its private equity funds, linking the price of debt to Carlyle’s goal of having 30% diverse directors on portfolio-company boards within two years of the firm’s ownership, spokeswoman Brittany Berliner said in an email.

During the past three years, the average earnings growth of Carlyle portfolio companies with two or more diverse board members was about 12% greater a year than portfolio companies that lack diversity, underscoring the correlation of board diversity with strong financial decisions and performance, Carlyle said Wednesday in a news release.

The pricing mechanism for the credit facility is designed to incentivize the performance of portfolio companies in the areas of i) gender equality on the board of directors and ii) renewable energy transition, supported by iii) a fundamental sustainability governance platform.

“Carlyle has long held the belief that diverse perspectives lead to great investment decisions, and this facility marks a tremendous milestone in our strategy to find opportunities at the intersection of financial performance and impact,” Kara Helander, Carlyle’s chief diversity, equity and inclusion officer, said in the news release.

Bank of America led the credit facility.

Source: Pensions & Investments