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Legal insights & industry updates

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Clyde Munro boosts war chest with £25m sustainable linked funding.

It is great to see investors have confidence in the Scottish dental sector but what is also of significance is the type of funding selected by Clyde Munro Dental Group.  

COP26 shone the spotlight on sustainable funding and highlighted the opportunities for lenders, investors and borrowers alike and Investec and Clyde Munro have obviously harnessed that momentum to engage and incorporate 'Environmental, Social and Governance' (ESG) standards into their funding package and with it help to promote sustainable finance. 

The premise behind sustainable linked lending is to incentivise the borrower to achieve ambitious, predetermined sustainability performance targets by developing and maintaining ESG standards. 

The most obvious benefit for Clyde Munro will be the fact that the ESG related margin ratchet will provide for a reduction in the interest rate, depending on it's performance against pre-agreed ESG-related criteria and targets.    Although sustainable finance provides more than just liquidity; improved credit worthiness is available to those who put ESG standards at the forefront of their business. For investors, SLL will increasingly be at the core of their investment strategy (or even a requirement for some) and may increase returns on investment — they help strengthen relationships with stakeholders throughout the communities in which they and the companies in which they invest operate.  

As we have seen those involved in sustainable finance also benefit from positive reputational impact and increased brand awareness while helping to promote an ever-growing awareness and commitment to long-term sustainable growth, diversity and inclusivity, and environmental protection. 

Hopefully the Clyde Munro and Investec deal is one of many sustainable funding transactions that will take place in the Scottish market during 2022.

The innovative funding package also includes an “ESG ratchet” which will reduce interest repayments on the funding as Clyde Munro achieves its sustainability performance targets.


banking and finance, climate change, healthcare