Auto Trader is the UK’s largest digital automotive marketplace. The company aims to change how the UK buys and sells cars by providing the best online car buying experience, while at the same time providing a highly efficient digital sales channel to retailers. 

Today, the company, which is listed on the London Stock Exchange and has been a member of the FTSE 100 since 2019, offers consumers access to over 80% of the UK’s automotive retailers. In FY2024, monthly average visits across all Auto Trader platforms totalled 77.5 million, with an average of 445,000 cars being offered each month.

Auto Trader has both near- and long-term Science-Based Targets initiative (SBTi) validated targets aligned with the most stretching 1.5°C scenario. Apart from its commitment to reduce its company emissions and use its voice and influence to drive more environmentally friendly vehicle choices, Auto Trader is determined to create a diverse and inclusive culture and partner with charities, community groups and industry bodies to make a positive difference to the communities where Auto Traders operates.

NatWest has been a longstanding banking partner for Auto Trader and is a Tier 1 lender, primary cash management bank, and strategic financing partner of choice for the company. As a result, Auto Trader turned to us when looking to extend an existing £200 million Revolving Credit Facility (RCF) and to include a sustainability-linked element to reflect the core pillars of their sustainability strategy.

In the role of Sustainability Coordinator, the NatWest team advised Auto Trader on the choice and definition of ESG key performance indicators (KPIs) for the sustainability-linked loan (SLL). The KPIs focus on 1) increasing female diversity in leadership roles, 2) increasing ethnic diversity at all levels within the organisational, and 3) Scope 1, 2 and 3 emissions reduction. Depending on the respective targets being met or missed, the borrower will receive a discount or premium to the margin they pay.

As part of the structuring role, the NatWest team worked closely with Auto Trader to produce an evidence-based ESG Lender Presentation, an ESG legal rider, and managed all ESG lender Q&A throughout the process – working to a very tight timescale. The transaction received very positive feedback from existing and new lenders, and this outcome was a reflection of the close collaboration throughout the process. NatWest has continued to work closely with the Auto Trader team since, to provide ongoing support with the next phase of their journey.

Kaye Lee, Director of Group Finance, Auto Trader Group, commented: “We are very happy with the outcome of our sustainability-linked loan process, with NatWest’s TMT sector coverage and ESG Advisory teams bringing invaluable insight and expertise to the transaction. Their deep understanding of our sustainability strategy enabled us to successfully integrate ambitious ESG KPIs into our RCF that focus on our material ESG topics and build on our existing governance structures.”  

Ali Morris, Relationship Director from NatWest’s TMT Coverage & Sector Content team, said: “We are delighted to have been able to support Auto Trader with their sustainability-linked loan. This not only represents a key transaction in the TMT sector, but also stands out in the market, given their focus on both gender and ethnic diversity, reflecting the importance of Diversity & Inclusion across the business. This debt package is also an example of NatWest’s determination to help accelerate the UK’s own sustainability journey by providing £100 billion Climate and Sustainable Funding and Financing to our customers, such as Auto Trader, by the end of 2025.”