Interest margin on $2 billion Ericsson credit line is tied to sustainability KPIs
Sustainability, aspects like power consumption of 5G networks and the applications those networks support that can boost environmental outcomes, is quickly emerging as a key messaging point for the telecoms and technology set. Swedish network equipment provider Ericsson, which is by no means a stranger to this tact with its long-running Technology for Good initiative, has renewed its focus on sustainability with a refresh to its corporate vision.
Announced Sept. 27, Ericsson’s new vision is of “A world where limitless connectivity improves lives, redefines business and pioneers a sustainable future.” That vision complements the updated company purpose: “To create connections that make the unimaginable possible.”
Citing the company’s century-and-a-half technology pedigree and looking forward to a networked future where “almost anything and everything” is online, CEO Börje Ekholm said in a statement, “This era of hyper connectivity is going to help to address major global challenges like climate change and digital inclusion…We remain steadfast in our efforts to foster a culture of integrity by embedding our values into all ways of working. This important work continues, and we are committed to creating greater accountability, trust and respect with our people, customers and stakeholders, while ensuring sustainable success for the company in the future.”
So what does that look like in practice? For starters, Ericsson last month secured a $2 billion “revolving credit facility” that is tied to the company’s sustainability KPIs, including a goal of reaching carbon neutral operations by 2030 and working with “suppliers setting 1.5 C° aligned climate targets,” according to a company statement. Ericsson Vice President of Sustainability and Corporate Responsibility Heather Johnson said, “We are delighted that we now also can link our climate action targets to our Ericsson financial activities. Taking this step fully reflects our company purpose, where sustainability is fundamental to the way we do business.”
Another proof point is situated in Lewisville, Texas, where Ericsson has invested $100 million in a 5G Smart Factory. The facility has received Global Lighthouse accreditation by the World Economic Forum. The 5G Smart Factory makes 5G equipment for customers in North America and is powered by renewable electricity, uses sensors to “proactively monitor energy usage,” and uses 24% less energy and 75% less indoor water than comparable buildings.
WEF’s Francisco Betti, head of shaping the future of advanced manufacturing and value chains, said the Lighthouse designations “make it clear that by realizing the potential of [Fourth Industrial Revolution] technologies in manufacturing, companies can unlock new levels of sustainability in their operations and explore a win-win solution: greater operational competitiveness while simultaneously making commitments to environmental stewardship, leading in a cleaner, more sustainable future as a result.”
