London CNN Business  — 

The world’s largest asset manager could soon be paying less to borrow money if it meets diversity goals and boosts its sustainable investing.

BlackRock has for the first time linked the cost of tapping bank lending to three metrics: how many women are in senior roles, Black and Latino employment, and how much it invests in assets that benefit society and the environment.

The interest rate and fee that BlackRock pays lenders on any amounts it draws from its primary credit facility, worth $4.4 billion, will rise or fall annually from 2022 depending on the number of targets it meets. The Wall Street Journal was first to report the story.

BlackRock (BLK) is targeting a 30% increase in Black and Latino employees in the United States by 2024, it said in a statement to CNN Business. It also aims to increase the percentage of women in senior leadership positions globally, currently at 30%, by 3% a year.

In his annual letter to shareholders on Wednesday, CEO Larry Fink acknowledged that the company’s culture is “not perfect.”

“Just as we ask of other companies, we have a long-term strategy aimed at improving diversity, equity and inclusion at BlackRock,” he said. Fink added that part of the strategy includes “mitigating bias” in its hiring and talent management.

The firm’s progress in boosting investments into companies with high environmental, social and governance (ESG) ratings could further affect its borrowing costs. It wants to be managing sustainable assets worth $1 trillion by 2030, up from $200 billion currently.

“The ESG-linked credit facility enhances BlackRock’s commitment and accountability to achieving certain sustainability goals,” the company said.

It will need to meet at least two of its three objectives and cannot “meaningfully underperform” on the third in order for a pricing benefit to kick in, according to a spokesperson. “If BlackRock meaningfully underperforms on two of three, a pricing penalty kicks in,” the spokesperson added.

The rate on the loan, which is a reserve facility not used regularly by the company, could also stay flat if it only narrowly misses its targets.

BlackRock’s commitment could deliver a major boost to sustainability-linked loans, which have risen in popularity in recent years as companies face mounting pressure from shareholders to embrace business practices that are better for society and the environment.

Last year, Britain’s largest supermarket group Tesco (TSCDF) linked interest payments on a £2.5 billion ($3.5 billion) revolving credit facility to environmental goals, including emissions reduction, renewable energy use and its management of food waste.

BlackRock — which ended 2020 with nearly $8.7 trillion in assets — sharpened its focus on ESG investing last year. It committed to exiting assets that present high sustainability risks, such as thermal coal, and launched new products that screen for fossil fuels and enable clients to invest in companies with the best ESG ratings.

Earlier this year, BlackRock said it will ask companies to disclose plans for how their business models will be compatible with a “net zero economy” and it will publish the proportion of its assets that are aligned to net zero greenhouse gas emissions.

Fink reaffirmed this commitment on Wednesday and said the company aims to have net zero emissions across all its assets under management by 2050.