Member Article

North East firms receive £34m of inaugural Lloyds Bank ESG bond

Firms in the North East have received £34 million from a total of £250 million that has been allocated to eligible borrowers nationwide, six months after Lloyds Banking Group became the first UK Bank to issue an Environmental, Social and Governance (ESG) bond.

Nationally, 1,371 small and medium sized businesses across 17 industrial sectors have benefited from 1,468 loans extended under the bond.

Underpinned by the Group’s Helping Britain Prosper plan, the bond reinforces the Group’s commitment to the UK economy.

The proceeds, raised predominantly from socially responsible investors, have been allocated to loans to businesses across the UK with strong social and environmental qualities.

Nationally, more than 96 per cent of loans have been made to borrowers in the most economically deprived areas of the UK, including a significant proportion in Birmingham, Manchester and Newcastle Upon-Tyne.

Information on the use of proceeds has been made available to bond investors via a unique and transparent reporting framework and also verified by an external auditor.

Proceeds from the bond have been used to finance small-scale renewable energy companies (0.3%), manufacturers (7.4%) and healthcare providers (7.7%). By way of example, more than £19 million was allocated to 79 healthcare providers located in disadvantaged areas.

Leigh Taylor, Area Director for SME Banking in the North East, Lloyds Bank Commercial Banking, said: “Investor appetite across the North East was very strong for Lloyds Bank’s first Environmental, Social and Governance bond, demonstrating the growing importance of socially responsible lending and investing.

“That we have been able to directly attribute the creation or safeguarding of more than 358 jobs to the bond, with many more benefiting indirectly, is a resounding endorsement of our commitment to Helping Britain Prosper.

“Having successfully launched and allocated the first ESG bond by a UK bank, we will look at options to bring further ESG bonds to market in due course.”