Global mining company Anglo American announced today the launch of its first sustainability-linked bond, with a €745 million offering of 10-year notes, with terms tied to the company’s performance on its climate, water and job creation 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 coupon on Anglo American’s new bond will be tied to the achievement of a series of 2030 goals by the company, including reducing Scope 1 and 2 greenhouse gas (GHG) emissions by 30%, reducing the abstraction of fresh water in water scarce areas by 50%, and supporting 5 jobs offsite for every job onsite.
The coupon on the bond will increase by 40 bp from 2031, for each of the goals that are not reached.
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