French-Swiss building materials giant LafargeHolcim has successfully launched an €850 million industry-first sustainability-linked bond with a coupon of 0.5% maturing in 2031.
With this first bond of its kind in the building materials industry, the company says it is confirming its sustainability leadership in the sector.
Géraldine Picaud, LafargeHolcim chief financial officer, said: “We are proud to be the first in our industry to launch a sustainability-linked bond. The order book of €2.6 billion demonstrates the confidence of investors in the company’s financial strength, strategy and ability to deliver on its sustainability targets.”
Magali Anderson, chief sustainability officer at LafargeHolcim, added: “This announcement demonstrates the company’s commitment to reach the most ambitious CO2 reduction target of the industry for 2030. Today’s bond issuance brings our ESG related funding agreements to CHF 6 billion.”
Bond investors will be entitled to a higher coupon should the company not meet its objective, incentivising LafargeHolcim to reach its target of 475kg net CO₂ per tonne of cementitious material by 2030. LafargeHolcim reports on its performance against this key objective in its Sustainability Report, which includes a limited assurance report by an external verifier.
ISS ESG, a leading ESG consultancy organisation, gave a second-party opinion validating the robustness and relevance of the company’s CO₂ reduction target in the context of this bond. ISS ESG’s experts confirmed the alignment of LafargeHolcim’s Sustainability-Linked Financing Framework with the Sustainability-Linked Bond Principles, which are published by the International Capital Markets Association (ICMA).
LafargeHolcim is rated by ISS ESG #4 out of 95 companies in the same sector (C+, Prime), qualifying its bonds as a responsible investment, and #1 out of 115 companies in the construction materials industry by Sustainalytics.
