Sustainable financing woven into Umicore’s fabric
With sustainability woven into the fabric of Umicore and our entire corporate strategy, every part of the business has an important part to play. For Finance, this includes increasingly managing and reporting ESG data, and driving a growing shift towards ‘green’ financing.
“Umicore’s focus is on integrated value. That means creating value for all stakeholders, not just shareholders, and positive environmental and societal impact as well as financial.
Our financial targets and sustainability targets are intrinsically linked.”
Filip Platteeuw, CFO
Our Finance function is traditionally known for its capacity and skills in compiling, processing and reporting financial data. Nowadays, it employs this expertise and its infrastructure for non-financial information, working with colleagues in other departments to monitor operational key performance indicators (KPIs) and sustainability data.
Green financing
In parallel, Umicore is increasingly shifting towards ‘green’ financing, where financing costs are directly linked to sustainability performance. In February 2022, we issued our first ever sustainability-linked loan (SLL). Underwritten by a pool of 13 international banks, the five-year €500 million loan specifically measures progress towards our carbon neutrality and gender diversity goals.
The loan dovetails with our ambitious Let’s go for Zero ESG strategy, which commits our company to reaching carbon neutrality in 2035. Our intermediate targets are to reduce Scope 1 & 2 greenhouse gas emissions by 20% in 2025 and by 50% in 2030. We also aim to reach gender parity as soon as possible, with 35% of women in management by 2030.
“Up until a few years ago, the topic of sustainability was less top-of-mind with investors. Now it has become an integral part of our dialogue. Capital flows are increasingly ESG-minded, creating opportunities for Umicore, including in terms of funding.”
Filip Platteeuw, CFO
Monitoring impact
Recent years have seen a growing push by investors and society at large for companies to address environmental and social issues such as climate change, human rights and diversity. Finance departments can play a key role in monitoring companies’ performance in such areas, measuring this impact and making it transparent to stakeholders.
Umicore’s Finance function, for example, has a central role in managing the KPIs we use to monitor our CO2 emissions. This includes not just tracking progress in reducing emissions, but also progress on associated projects and costs. “The operational departments implement the project, while we take care of the financial side, making sure this sustainability work is done efficiently and profitably for all our stakeholders,” Filip explains.
Finance creates insight into the data, helping Umicore be sure of achieving our sustainability targets. And it’s not just about traditional reporting of historical figures; it’s also about future plans and projections. “These are core competences of the Finance department, so this role makes perfect sense. Still, it remains a shared responsibility and we work closely with our Sustainability department, which collects operational data and delivers it to us,” says Filip.
All hands on deck
This cross-disciplinary team approach is vital to success. Umicore has an ESG committee made up of representatives from departments including finance, communication, health & safety, and environment.
Within Group Finance, senior consolidation manager Mélanie Servais also serves as ESG finance manager. She coordinates with and supports other departments on sustainability issues and KPIs. That said, all Finance professionals at Umicore are expected to play their part in helping promote and implement the company’s sustainability focus.
Transforming for the future
Technology also plays an important role. As time goes on, automation will increasingly replace manual processes to help us measure and manage large quantities of data, and ensure the quality of that data.
The transformation of Finance to make sustainability an ever-more integral part is set to continue and intensify in coming years. That costs money, but it is the basis for our future competitiveness and profitability, Filip notes. “The cost of working in an unsustainable way in the future will be much higher than the costs of this transformation now.”