Foreign Exchange
Published  8 MIN READ

Drax Highlights Core Sustainability Credentials with Novel ESG-linked FX Solution

Many treasurers are trying to find their feet in helping their companies deliver on sustainability. Having led the successful execution of an innovative project to implement ESG-linked FX derivatives for her organisation, Lisa Dukes, Director, Corporate Finance & Derivatives, Drax Group, encourages them to be bold, determined and not shy away from thinking outside the box.

Power generators are under intense investor scrutiny over their sustainability credentials with fossil-fuel players, not surprisingly, a major focus. But the sector’s greener contingent is by no means resting on its laurels, with the UK’s leading renewable energy supplier Drax notably proactive on the sustainability front with initiatives that include a trailblazing ESG-linked foreign exchange (FX) derivatives initiative.

Lisa Dukes
Director, Corporate Finance & Derivatives, Drax Group

This is by no means the first ESG feather in Drax’s cap, however. In 2019, the firm secured a £125m ESG CO2 emission-linked loan facility – a global first for a power generator. That same year, the company also announced its ambition to be carbon negative by 2030 using bioenergy with carbon capture and storage (BECCS) – another global first. Drax also rolled out the first sustainable CO2 emission-linked deferred letter of credit facility. And in late 2020, the group refinanced its existing revolving credit facility (RCF), replacing it with a new £300m ESG RCF, now enshrining ESG methodology across the full corporate finance spectrum.