Global insurance and financial services company Prudential Financial has joined the ranks of companies tying the cost of capital to progress on ESG goals, with the introduction of a sustainability-linked credit facility.

The new credit facility was created with the renewal of its prior $4 billion facility with the addition of terms linking borrowing costs to the company’s greenhouse gas emissions targets and initiatives to increase the diversity of senior leaders.

Margaret Foran, Chief Governance Officer and Corporate Secretary for Prudential Financial, said:

“We are committed to ensuring that sustainability runs through everything we do. This transaction is another important step forward to integrate our ESG and liquidity framework, and to ensure greater accountability around our commitments for all of our stakeholders.”

Prudential’s announcement marks another step in the surging use by companies globally of sustainability-linked debt instruments. In a study released earlier this week, credit ratings, research, and risk analysis provider Moody’s Investors Service reported that that sustainability-linked loans reached record levels in Q2, with loan volumes reaching $156 billion, up 54% over the prior quarter.

Nandini Mongia, Treasurer of Prudential, added:

“We continually look for opportunities to align our liquidity framework with Prudential’s broader commitment to sustainability. This credit facility is the natural next step in our journey.”