Multinational pharmaceutical company Teva Pharmaceutical Industries announced today the completion of its $5 billion sustainability-linked bond issuance, the largest offering of its kind from any sector, and the first sustainability-linked bond from a generic pharma company. The offering also marks Teva’s debut into the sustainable finance market.
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.
According to a recent report from Moody’s ESG, sustainability-linked bonds are the fastest-growing segment of the sustainable finance market, with year-to-date (through September 2021) global issuance of $62 billion eclipsing 2020’s full year $9 billion, and full-year volumes anticipated to reach $100 billion.
For the newly issued bond, Teva has tied the interest rate paid to three of the company’s 2025 sustainability targets, including its goals to achieve a 25% reduction in Scope 1 and 2 GHG emissions and increase in access to essential medicines for patients in low-and middle-income countries (LMICs) by 150%.
Kåre Schultz, CEO of Teva, said:
“A key part of our environmentalEnvironmental criteria consider how a company performs as a steward of nature., socialSocial criteria examine how it manages relationships with employees, suppliers, customers, and the communities where it operates. and governanceGovernance deals with a company’s leadership, executive pay, audits, internal controls, and shareholder rights. (ESGEnvironmental, social, and governance (ESG) criteria are a set of standards for a company’s operations that socially conscious investors use to screen potential investments.) efforts is helping the world in ways we’re uniquely positioned to deliver. For Teva, that means leveraging our extensive portfolio of essential medicines to expand access for patients in low- and middle-income countries, as well as engaging our global operations to reduce greenhouse gas emissions. This effort demonstrates Teva’s commitment to society and accelerates our impact.”
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