Eiffel Investment Group's sustainability-linked loan (SLL) to SB Italia – which has since rebranded to be Havant – stands out for embedding sustainability targets at the heart of a strategic cross-border acquisition.

Structured alongside the Italian solutions provider's purchase of Archive-IT – a Dutch provider of enterprise content management software solutions – the financing demonstrates how sustainability-linked instruments can be incorporated into merger and acquisition (M&A) contexts.

It was this innovative context that caught the attention of the judges, with one commenting: "It is impressive that the deal is structured as an SLL despite its complexity, incorporating elements of refinancing and cross-border M&A".

The transaction is underpinned by two key performance indicators (KPIs). The first targets an increase in the share of employees with disabilities, going beyond regulatory requirements in Italy and extending best practices into the Netherlands.

"The KPI associated with employees with disabilities is not an aspect that gets much attention in the sustainable finance space," commented one judge. "It is much appreciated that the issuer is putting this forward as their first KPI, since it is an important social inclusion issue."

The second KPI focuses on reducing carbon intensity across Scope 1, 2, and 3 emissions. By incorporating Scope 3 and linking performance to revenue, the loan incentivises improvements in energy efficiency, procurement and supplier engagement, aligning sustainability with growth.

One of the judges commended the structure of the second KPI for its inclusion of Scope 3 emissions and an intensity basis measure that "goes beyond minimum market standards", adding, "as does the application of the inclusion KPI to the Netherlands, where there is no regulatory requirement to do so".

The ESG margin ratchet embedded in the loan pricing includes an upside and downside, depending on performance. This structure reinforces credibility, ensuring that sustainability commitments translate into tangible economic consequences and are not merely declarative, according to Eiffel, which also won the award for Sustainable Lender of the year – fund/asset manager in this year's Sustainable Debt Awards.