NatWest will assess Clarion against its two ‘social key performance indicators’, the first measuring the social value in the group’s supply chain, whilst the second measures the number of apprentices hired on their construction Sites.
Should Clarion reach the agreed target for both of these KPI’s, NatWest will award them with a lower interest rate margin on the £100m loan. This funding forms part of NatWest’s recent commitment to support Housing Associations with ‘£3bn of new funding by the end of 2022”.
Clarion, who own and manage 125,000 homes, was one of the first backers of the Sustainability Reporting standard that launched last year and the loan is the Clarion’s first facility linked to the Sterling Overnight Index Average (SONIA), which will replace the London Interbank Offered Rate (LIBOR) by the end of the year.
Patrick Minjauw, Interim Director of Treasury and Corporate Finance at Clarion said “We can maximise the amount of social value we deliver and help communities to really thrive by working with our partners.
“Our social value programme mobilises our suppliers to help us realise our social objectives. We are delighted that banks such as NatWest are recognising the impact of this programme and provide funding at a lower interest rate.”
Hedley Hadfield, Director of Housing Finance at NatWest, said: “Providing a sustainability-linked loan is an excellent way for the bank to help Clarion with its priority of supporting the communities it works with. Having two separate KPIs is something we are starting to see more of in the social housing sector, ensuring that any benefits we can pass on to borrowers are maximised.”