Sberbank of Russia : opens RUB10 bln line of credit for Sistema with rate pegged to sustainability performance

Sberbank and PJSFC Sistema have signed an agreement entitling the company to a RUB10 bln framework facility with the option of pegging the interest rate on each loan to its sustainability performance, which is known as Sustainability Improvement Loans. The funds obtained will be used for general corporate needs.

Alexander Vedyakhin, First Deputy Chairman of the Executive Board, Sberbank:

'ESG - Environmental, Social, and Governance - is a global development trend behind effective and sustainable businesses. It's hard to overestimate its importance for investors, customers, and the country in general. Sber is set out with the aim to become an ESG leader. Therefore, the loan agreement with our partner, the diversified corporation PJSFC Sistema, is extremely important as a precedent for the evolution of market products that allow stakeholders to capitalize on the principles of responsible business development across verticals. We are going to keep developing ESG lending for our customers who are introducing sustainable development approaches pro-actively.'

By entering this agreement, Sistema has committed to adopting its Environmental Policy and integrating responsible investment principles into its investment process and business model. Sustainable development as an integral part of Sistema's strategy will be established as one of the key benchmarks for investment decision-making and asset management.

Vladimir Travkov, Vice President for Finance (CFO), PJSFC Sistema:

'The new agreement with Sberbank confirms our commitment to the principles of sustainability and our readiness to promote the ESG agenda in Russia. This is the first ESG loan deal between a Russian company and a Russian bank, and we are pleased to be setting a new standard for responsible investment in the country's economy.'

In 2019, Sistema launched a comprehensive review of its sustainability and responsible investment management. The Board of Directors of the Corporation approved an ESG action plan to improve the sustainability of the investment portfolio based on indicators of corporate governance, social and environmental responsibility. In 2020, a new version of Sistema's Corporate Governance Code, developed in line with international best ESG practices, has been approved. The same year, Sistema has adopted its first Sustainability Policy, providing clear guidelines for corporate responsibility​.

The transformation in Sistema's approach to its sustainability performance has led to its improved standing in ESG ratings and indices. Since 2016, Sistema has been one of the leaders in the sustainability indices of the Russian Union of Industrialists and Entrepreneurs (RSPP) and, since 2019, the Corporation's securities have been included in the composition of the Moscow Exchange - RSPP ESG indices. Sistema has also been promoted to the FTSE4Good index, upgraded its MSCI ESG rating to 'BB,' and has secured its position in a number of other ratings.