Avon, Natura, The Body Shop and Aesop brand owner Natura & Co announced today that it has issued a $1 billion sustainability linked bond, with interest rates tied to the company’s performance on its emissions and sustainable packaging goals.
According to the Brazil-based company, the offering marks the largest Sustainability Linked Bond issuance to date in Latin America.
Sustainability linked securities are an emerging form of sustainable finance instruments, with attributes including interest payments tied to an issuer’s achievement of specific sustainability targets. The instruments have been gaining significant popularity by issuers and investors.
Natura’s new bonds mature on May 3, 2028 and carry an interest coupon of 4.125% per year. The sustainability goals tied to the bond include targets to reduce scopes 1, 2 and 3 of greenhouse gas emissions intensity by 13%, and to reach 25% of post-consumer recycled (PCR) plastic in plastic product packaging by 2026. If Natura does not reach these goals, interest on the bond will increase by 65 basis points as of November 2027.
Roberto Marques, Executive Chairman and Group CEO of Natura &Co, said:
“The successful raising of US$1 billion in bonds linked to sustainability targets is a milestone for Natura &Co and for Natura, and is the largest-ever single issuance by a Brazilian issuer. The strong demand for the securities is a recognition by the market of the Group’s solid capacity to deliver socialSocial criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates., environmentalEnvironmental criteria consider how a company performs as a steward of nature. and financial results. Natura already has a long and consistent history of commitment to sustainability and is now taking a further step connecting and aligning financial and environmentalEnvironmental criteria consider how a company performs as a steward of nature. targets.”
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