CitizenM raised $500 million (€480 million) from HSBC UK, HSBC Continental Europe, ABN AMRO Bank N.V., and Aareal Bank with a sustainability-linked loan, becoming one of the first European hospitality companies to adopt such financing arrangements.
The new funding incorporates specific environmental, social and governance (ESG) goals as part of the push for greener travel. For CitizenM, this will target reducing operating carbon emissions and improving green building certifications for its European-owned hotel assets.
“We’re very proud to have completed this deal with citizenM,” said Elizabeth Davies, head of hotels at HSBC UK. “With its high profile in the hospitality sector, we expect that CitizenM’s relatively early adoption of the sustainability linked loan will help to drive further market adoption, as hospitality groups seek to demonstrate a serious commitment to creating positive impacts on the environment.”
Accor announced a similar refinancing arrangement in November 2021 with a bond issue indexed to the group’s sustainable development goals.
Many large hotel companies have set or submitted plans for improving sustainability by reducing their greenhouse gas emissions. Hotel investors are increasingly turning their attention to climate risks and carbon-reduction efforts in their portfolios.