Power management technology provider Eaton announced today the completion of its first-ever sustainability-linked bond issuance, closing a $1.3 billion 2033 bond with terms tied to the company’s performance towards its emissions reduction goals.
Sustainability-linked securities are the fastest growing form of sustainable finance instruments, with attributes including interest payments tied to an issuer’s achievement of specific sustainability targets.
The interest rate on Eaton’s new sustainability-linked notes is subject to the achievement of a goal to achieve at least 40% reduction in absolute Scope 1 and 2 GHG emissions by the end of 2027, from a 2018 baseline.
Eaton set a series of climate goals in 2020, including a target to cut carbon emissions from its operations by 50%, enabling the company to be carbon neutral at that time, and to reduce scope 3 emissions by 15%, from a 2018 baseline. The targets were approved by the Science Based Target Initiative (SBTi). The company also set plans to invest $3 billion in R&D for sustainable solutions by 2030.
Harold Jones, Chief Sustainability Officer and Executive Vice President, Eaton Business System, said:
“Achieving our sustainability goals is as critical to our business as meeting our financial commitments, and this financing aligns both strategies. Tackling climate change requires innovative solutions, and this offering will enable us to invest in energy efficiency, renewable energy and other emissions-reduction efforts.”
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