BNP Paribas, JetBlue Close Industry-First ESG-Linked Loan

The growth of environmental, social and governance (ESG) initiatives are making its way into the aviation sector as international banking group BNP Paribas has closed a sustainability-linked loan (SLL) with JetBlue Airways, via an amendment to its existing Senior Secured Revolving Credit Facility (RCF).

“Our owners, many of whom are also crewmembers, want to see how ESG initiatives are connected to our financials,” said Sophia Mendelsohn, Chief Sustainability Officer for JetBlue. “As the first airline to accomplish this type of transaction, we are directly linking our commitment to addressing environmental and social issues with our bottom line. We are proud of what we have accomplished, but also understand we have more to do in reducing our carbon footprint and meeting the needs of our stakeholders.”

This isn’t JetBlue’s first foray into ESG as the company has already partaken in similar ventures, including a partnership with The Nature Conservancy last year to examine the connection between natural resources and tourism in the Caribbean. In addition, JetBlue became the first U.S. airline to announce that it was increasing its efforts on carbon offsets to achieve carbon neutrality for all of its domestic flights.

“We couldn’t be happier to continue our partnership with JetBlue as the Company progresses on its sustainability journey. JetBlue’s SLL is just one element of the airline’s comprehensive ESG and sustainable finance strategy, which is incredible to see. BNP Paribas is dedicated to working with our corporate clients to identify tailored solutions that align with their specific efforts and commitments toward achieving their ESG goals,” said Florence Pourchet, Co-Head of Global Banking Americas at BNP Paribas, who also oversees the Bank’s Sustainable Finance strategy in the Americas.

A Pair of ESG ETFs to Look At

An ETF to consider for ESG exposure is the MSCI ACWI ex USA ESG Leaders Equity ETF (NYSEArca: ACSG). ACSG seeks investment results that correspond generally to the performance of the MSCI ACWI ex USA ESG Leaders Index, which is a capitalization-weighted index that provides exposure to companies with high ESG performance relative to their sector peers.

For ETF investors looking for fixed income exposure with an ESG component attached, they can look to the iShares ESG U.S. Aggregate Bond ETF (NYSEArca: EAGG). EAGG seeks to track the investment results of the Bloomberg Barclays MSCI US Aggregate ESG Focus Index, which has been developed by Bloomberg Barclays Capital Inc. with environmental, social and governance (“ESG”) rating inputs from MSCI ESG Research LLC pursuant to an agreement between MSCI ESG Research and Bloomberg Index Services Limited or an affiliate.

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