View all newsletters
Receive our newsletter - data, insights and analysis delivered to you
  1. Asset class
  2. Fixed income
February 28, 2022updated 01 Mar 2022 11:51am

Keolis deal reflects gender diversity drive in European rail

A push by European train operators to attract more female staff is gathering pace, in light of the sector’s first sustainability-linked loan to set a target of hiring more women, taken out by a French transport company. 

By Adrian Murdoch

Time to board: Europe’s rail industry is trying to increase the proportion of women in its workforce. (Photo by SolStock / iStock)

  • Europe’s rail sector is steadily increasing the number of women it employs, which currently stands at 21% of the total workforce.
  • In an industry first, Keolis has signed a €600m ($681.4m) five-year sustainability-linked syndicated loan linked to gender equality. 
  • Keolis aims to raise the proportion of women on its staff, but does not disclose the target figure. 

Rail is a notoriously male-dominated industry – consider the Fat Controller of Thomas the Tank Engine fame or the 19th-century US financier Cornelius Vanderbilt. Today, just one-fifth of the workforces of European railway companies is female, according to the Brussels-based Community of European Railway and Infrastructure Companies (CER). But change is under way and momentum is building in respect of gender diversity.  

In November, after three years of negotiations, CER – whose members include most of Europe’s major national train operators – signed the Women in Rail agreement. It aims to attract more women to the sector, give them more protection, and guarantee equal treatment in the workplace. The deal gives European rail companies 12 months to establish a gender and diversity policy and then a further two years to implement it.  

This comes on the back of positive results from diversity programmes implemented by rail operators in several European countries.  

Last year, German national rail operator Deutsche Bahn committed to increasing both the female share of its 300,000-strong workforce to 30% by 2024 from 23% now, and the 20% of female managers it has to the same level. Its freight operating subsidiary DB Cargo has gone even further: in April 2020, it became the first of the group’s business units to have a management board with a 50/50 gender split.  

Similarly, Austrian Federal Railways (ÖBB) aims to have women making up 17% of its workforce by 2026, up from 14% now. 

Content from our partners
Green for go: Transforming trade in the UK
The challenges – and opportunities – of developing renewables at scale
Collaboration along the investment value chain will bolster effective ESG strategies

France’s national rail company was an even earlier starter on improving gender diversity. Of SNCF’s 275,000 staff, 22.8% are women (up from 10% in the 1980s), and 29% of managers are women, following a diversity programme initiated in 2004.  

Gender imbalance

It is appropriate, then, that an SNCF subsidiary is leading its peers in seeing sustainability-linked financing as a way to address the gender imbalance.

Paris-based Keolis, which operates public transportation systems in 17 countries, said in late January it had signed a €600m ($681.4m) five-year sustainability-linked syndicated loan (SLL). In a first for the sector, one of the key performance indicators (KPIs) is linked to gender equality, as was the case in a refinancing by French construction company NGE in December. There have been other SLLs in the rail sector, but none with such a target (see chart below).

Thomas Cuingnet, head of financing and treasury at Keolis, tells Capital Monitor that the impetus for the SLL was new management making ESG core to its strategy. Marie-Ange Debon was made group executive chair in August 2020 and Christelle Villadary became chief financial officer in April last year.  

Yet Keolis, an SNCF subsidiary, already had form in sustainability. In 2020, it launched the largest electric bus network in Europe, putting 246 such vehicles in the Netherlands. It has also been promoting gender equality since 2010. In 2016, it was the first public transport operator globally to achieve Gender Equality European and International Standard (GEEIS) certification.  

Created in 2010 in France to promote gender equality worldwide, GEEIS certification is managed by French testing, inspection and certification company Bureau Veritas. It is granted for four years, with an audit done after two years. 

The GEEIS label applies to 87% of Keolis employees, across its businesses in nine countries: Australia, Belgium, Canada, France, India, the Netherlands, Norway, the UK and the US. The company is also working to achieve certification in its remaining countries of operation – namely China, Denmark, India, Côte d'Ivoire, Qatar, Senegal, Sweden and the United Arab Emirates.   

Attracting female drivers

The rail company's SLL has four KPIs, one of which is linked to gender diversity, two to the environment and one to safety.  

The first of these incentivises the company to increase the number of women in its workforce, which currently stands at 21.7%, while 37.6% of its managers are female. To put those figures into context, 22.8% of SNCF’s employees and 29% of its managers are women. 

Keolis does not disclose the target percentage, but Cuingnet says it will require almost 25% of annual hires to be female. Recruiting women to drive trains is a challenge, he adds. The company is following a two-pronged approach: using programmes such as partnerships with schools to encourage more women to consider the profession and considering different approaches to hiring.  

Emissions target

Of the SLL’s two environmental KPIs, the first is linked to the proportion of employees working in subsidiaries covered by the ISO 140011 environmental management system certification, which measures environmental performance. Keolis did not disclose details on the targets. 

“Having a view on what our CO2 emissions could be in two years, when we don’t yet know what the client will want as a transport strategy, is complicated,” Cuingnet says. The group wanted more time to estimate what those emissions might be. Keolis will work with the loan-arranger banks to agree a CO2 trajectory by the end of this year. 

The loan's other KPI is based on the proportion of employees covered by international safety management accreditation ISO 45001 or BS ISO 39001.  

NGE had set a KPI based on reducing the accident rate on its building sites, but Keolis rejected that approach because its employees work in environments outside its control. A third of accidents across Keolis's businesses, Cuingnet says, are caused by third parties.  

The second KPI is based on reducing greenhouse gas emissions, starting from 2023 because Keolis’s business model relies on winning project concessions. The company instead chose to commit to safety procedures, Cuingnet adds. “This forces subsidiaries to put in place the right routines where they operate.” 

The loan is structured with a margin reset every year, Cuingnet says, and a yet to be confirmed third-party provider will assess the performance of every KPI annually. 

Deal scarcity value

There are not many examples of sustainability transactions in the rail sector, especially SLLs, says Alexis Collonge, sustainable finance coordinator for European capital markets at BNP Paribas, which was the sustainable development coordinator for the deal.  

That scarcity value helped drive demand from the 14 banks that financed the loan, leading it to be increased from €500m to €600m. 

There have only been five SLLs from rail companies previously in Europe, raising a total of €8bn, according to Capital Monitor figures. In all cases they target CO2 emissions, the use of electric technology and station accessibility.  

The deal has been a financial success for Keolis, says Cuingnet. The company has not publicised details of the margins on the loan nor its precise targets, but says the SLL has extended the average maturity of its debt. 

Keolis’s debt last year stood at just over €1bn, which the SLL goes a long way to refinancing. And more such transactions are on the way: the plan is to replace all of the group’s debt with sustainable funding by 2026, Cuingnet adds. 

But the importance of the latest deal goes beyond the financing aspect, Collonge says: it showcases what the company is doing to mobilise people internally in respect of gender diversity and to align management with those objectives.  

Along with its rail industry peers in Europe, Keolis certainly seems to be on the right track in terms of improving gender diversity. 

Websites in our network
Select and enter your corporate email address To receive our weekly newsletter – to your inbox, simply send us your work email.
  • Chief executive officer
  • Chief investment officer
  • Portfolio manager
  • Chief operating officer
  • Chief financial officer
  • Treasurer
  • Chief technology officer
  • Chairperson
  • Managing director
  • Director
  • Group or senior manager
Visit our privacy policy for more information about our services, how Progressive Media Investments may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

Thank you for subscribing to Capital Monitor.