ESG: Epsilon Carbon Secures INR 100 Crore Sustainability-Linked Funding

Sustainability-linked finance mobilizes capital to support improved environmental, social, and governance performance, thereby playing a crucial role in achieving sustainability goals.’

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MUMBAI (India CSR): Epsilon Carbon Pvt. Ltd., a global leader in carbon-based products, has secured INR 100 crore sustainability-linked working capital funding from Standard Chartered Bank, India. This move underscores Epsilon Carbon’s commitment to Environmental, Social, and Governance (ESG) goals and supports its transition to a low-carbon ecosystem.

Sustainability-Linked Funding

The funding is linked to predetermined sustainability performance indicators and targets, which are core to Epsilon Carbon’s business. These include the reduction of greenhouse gas emission intensity and the reduction of disposal of hazardous waste to landfill.

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Recognition of Commitment to Sustainability

In 2023, Epsilon Carbon achieved a Silver Rating from EcoVadis, acknowledging its commitment to sustainability. This places it among the top 25% of all EcoVadis rated companies and the top 5% within the non-metallic minerals industry.

Proactive approach to sustainable growth

Vikram Handa, Managing Director of Epsilon Group, expressed his pleasure at partnering with Standard Chartered Bank in this transformative initiative. He said, “As leaders in the chemical industry, we recognize the importance of integrating ESG considerations into our operations, and this sustainability-linked funding exemplifies our proactive approach to sustainable growth. The funding not only strengthens our financial position but also demonstrates our dedication to sustainability and responsible business practices.”

As such, Epsilon Carbon’s fully integrated carbon black & specialty carbon facility in Bellary, Karnataka, is aligned with the Government of India’s mission to achieve Net Zero emission by 2070.

Vikram Handa, Managing Director of Epsilon Group

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Playing a key role in Epsilon Carbon’s sustainability progress

Shobana Chawla, Executive Director, Sustainable Finance, Standard Chartered Bank, India, expressed pride in playing a key role in Epsilon Carbon’s sustainability progress. She said, “Sustainability is one of the strategic priorities at Standard Chartered Bank and we are committed to helping our clients transition to net zero and accelerate the Bank’s journey towards building a green economy.”

Epsilon Carbon

Established in 2017, Epsilon Carbon is a leading global player in the carbon industry, committed to delivering innovative and sustainable solutions. It is one of the largest exporters of specialty carbon & carbon black globally. Its operations have achieved 100% backward integration, utilizing captive feedstock and raw materials from the steel industry.

Standard Chartered Bank

Standard Chartered Bank has been operating in India with a continuous presence of 170 years, making it one of the oldest foreign banks in the country. It is a leading international banking group, with a presence in 53 of the world’s most dynamic markets and serving clients in a further 64.

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What is Sustainability-Linked Funding?

Sustainability-Linked Funding is a form of financing designed to incentivize the borrower’s achievement of environmental, social, or governance targets. It emerged in 2017 and has become the fastest-growing sustainable finance instrument.

Here are some key features:

Incentives: The pricing of these financial instruments, usually through interest rates, is tied to the achievement of sustainability targets.

Sustainability-Linked Bonds (SLBs): These are a type of sustainability-linked finance that aim to improve climate and environmental outcomes. Unlike other forms of sustainability-linked debt financing, SLBs do not earmark funding for a particular project. Instead, the financial or structural characteristics of a bond (e.g., interest rates) are conditional on whether or not the issuer meets predetermined Key Performance Indicators (KPIs).

Growth: The market for private SLBs grew from US$9 billion to $100 billion between 2020 and 2021. However, these instruments are still nascent in emerging markets, which represent only 5 percent of total issuance to date.

Sovereign SLBs: These link sovereign debt with national climate and environmental commitments. For example, in 2022, Chile and Uruguay issued the world’s first sovereign SLBs.

(India CSR)