Gold Fields granted sustainability loan

A group of 16 international banks that include ING Bank and MUFG Bank have put forward stringent conditions to Gold Fields in granting it a R23bn credit facility, including improving its gender representation and reducing its emissions.

The $2.3bn five-year loan is Gold Fields’ first sustainability loan in its history.

It could be seen as the miner’s attempts to demonstrate its commitment to environmental, social and governance (ESG) factors that are becoming more important for fund managers in picking stocks.

The gold producer stands to benefit from lower interest rates if it reaches the agreed ESG targets, but will be liable for a premium if these are not met. This reflects the banks’ serious stance on social justice and climate change issues, as they reward or punish borrowers based on their ESG achievements.

Like its peers, Gold Fields has an ESG strategy in place. This includes minimising gas- and coal-fired electricity with renewables to achieve its 2030 goals. “This is Gold Fields’ first sustainability-linked loan and relates to our second strategic pillar, namely to ‘build on our leading commitment to ESG’. It illustrates how ESG has become fully integrated into our business,” CFO Paul Schmidt said in a statement on Monday.

Gold Fields aims to improve women’s representation in its total workforce from the current 23% to 30% by 2030.

It is also looking to increase the amount of recycled water from 75% to 80%.

Through renewable energy projects, it is targeting to reduce scope 1 and 2 carbon emissions.

Two-thirds of Gold Fields’ current greenhouse emissions emanate from electricity usage. More than half of the emissions (54%) are scope 2 emissions, with South Deep the highest emitter, deriving most of its electricity from coal-based power supplied by Eskom.

To reach the 2030 target, the company’s focus will be on replacing most of the gas- and coal-fired electricity with renewable energy.

In 2022, the electricity consumed from renewable energy

sources was about 14% of the total compared with 4% two years earlier.

In a separate development, Gold Fields has also completed four five-year revolving credit facilities worth R2.5bn with FirstRand, Nedbank, Absa and Standard Bank.

This will be used to fund capital expenditure as well as general corporate and working capital requirements.

Shareholders have been increasingly vocal about companies coming up with credible ways to reduce their emissions.

Financial services group Old Mutual in April took on Sasol over its strategy to reduce its carbon emissions, which are second only to Eskom’s.

“Sasol is the single biggest emitter of carbon emissions in the SA listed market,” Old Mutual said. “While it is a large employer and a key contributor to SA’s GDP, we remain concerned about the long-term implications of its climate impact and its stranded asset risks.

“We feel the company has failed to communicate a clear strategy that would resolve or improve its current climate metrics and carbon emissions,” Old Mutual said.

Old Mutual owns about 3% of Sasol.

R23bn

is the total credit facility that Gold Fields has been granted by 16 banks