Global pharmaceuticals, consumer healthcare and vaccines company Sanofi announced today the launch of its inaugural sustainability-linked bond issuance, with the pricing of €650 million of notes with the cost of debt tied to the company’s performance towards achieving its goals to improve access to essential medicines in low- and lower-middle-income countries. The offering forms part of a €1.5 billion bond issuance by the company.
Sustainability-linked securities, which are designed to incentivize issuers to deliver on sustainability goals with terms tied to the performance towards the targets, are the fastest growing segment of the sustainable finance market. According to a recent report by Moody’s ESG Solutions, the sustainability-linked bond market surged 10x in 2021 to $90 billion of issuance, with 2022 volumes anticipated to more than double to $200 billion.
The bond marks Sanofi’s second time accessing the sustainability-linked finance market, following the signing by the company of €8 billion of sustainability-linked credit facilities in late 2020.
Sanofi CFO Jean-Baptiste de Chatillon said:
“A year after pioneering sustainable finance with our sustainability-linked revolving credit facilities, we further contribute to the development of the sustainable finance market through the successful pricing of our first sustainability-linked bond. We continue to make progress in our Environmental criteria consider how a company performs as a steward of nature., Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. and Governance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights. activities that are an essential part of our strategy and embedded into our business.”
The offering follows the release by Sanofi in December of its new Sustainability-Linked Bond Framework, detailing the sustainability goals and performance indicators to be tied to financings under the framework. The framework enables the company to issue bonds aligned with a range of sustainability goals, including reducing scope 1 and 2 or scope 3 GHG emissions, providing access to essential medicines and to and healthcare programs targeting chronic diseases in low income and lower middle-income countries.
For the current bond, Sanofi has chosen to tie terms to its access to medicine target to reach at least 1.5 million patients with essential medicines for the treatment of non-communicable diseases in 40 of the world’s poorest countries, between 2022 and 2026. Reaching this target would represent a 300% yearly increase in patients reached by 2026, compared to the company’s 2019 baseline.
To help achieve its access to medicine goals, Sanofi recently launched Sanofi Global Health, a non-profit business unit providing 30 (at onset) of the company’s most essential medicines including treatments for cardiovascular diseases, diabetes, cancer, malaria and tuberculosis, for patients in some of the least developed regions of the world.
Sandrine Bouttier-Stref, Global Head of Corporate Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. Responsibility of Sanofi, said:
“Linking the cost of financing to the achievement of concrete targets in terms of access to medicines confirms our determination to put Social criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. responsibility at the center of our ambitions.”
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