Multinational building systems group johnson controls has linked the pricing of US$3bn in environmental, social and governance loans to a pricing structure that is more reminiscent of the European model, in that it impacts both drawn and undrawn pricing. The company is not only one of the first industrial companies to tie pricing to specific sustainability metrics. It is also the first in the US to offer price cuts to borrowers regardless of whether the loans are used or not. Sustainability-linked loans, which generally backstop commercial paper programs, include incentivised pricing structures based on interest rates reductions or increases depending on their borrower's ability to meet or exceed preset ESG performance targets.
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