Anglo American plc this week issued its first sustainability-linked bond, including performance targets to reduce greenhouse gas emissions and fresh water abstraction, and to support job creation in host communities.
This €745 million bond is the first instrument issued following the publication of Anglo American’s Sustainability Financing Framework and bond investors will be entitled to a higher final coupon payment should the company not meet these targets:
- Reduce absolute greenhouse gas emissions (Scopes 1 and 2) by 30% by 2030, compared to 2016
- Reduce the abstraction of fresh water in water scarce areas by 50% by 2030 compared to 2015
- Support 5 jobs off site for every job on site by 2030
The financing mechanism will see a coupon increase of 40bps accruing from September 2031 for each of the selected KPIs that do not achieve its target or if the verification of the target being achieved has not been published.
Anglo American’s Sustainability Financing Framework has been established in accordance with the Sustainability-Linked Bond Principles (SLBP) 2020 administered by ICMA (International Capital Market Association) and the Sustainability-Linked Loan Principles (SLLP) 2022 administered by the LMA (Loan Market Association). These are voluntary guidelines that outline best practices for financial instruments to incorporate forward-looking sustainability performance outcomes and promote the development and preserve the integrity of the sustainability-linked bond and loan markets.
Anglo American’s Sustainability Financing Framework covers bonds, loans and other financing instruments and links the company’s funding requirements to stretch goals set out in its Sustainable Mining Plan.
