As part of its efforts to incorporate climate action, water preservation, and safety in its strategy, leading building materials company Holcim announced today a commitment to reach 40% of sustainable financing by 2024.
The announcement follows a series of sustainable finance deals recently completed by the company, including two new sustainability-linked financing transactions worth over CHF 3 billion. 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.
Last year, Holcim became the first company in the building materials industry to launch a sustainability-linked bond, with an €850 million offering tied to the company’s target to reach 475 kg net CO2 per ton of cementitious material by 2030.
Holcim has also joined the UNGC CFO Taskforce, a coalition including 60 companies representing $1.7 trillion in market capitalization, committed to aligning finance strategies with the United Nations Sustainable Development Goals (SDGs).
The use of sustainable financing instruments has surged in recent years, with Moody’s forecasting annual sustainable bond issuance to pass the $1 trillion mark this year, with green bond issuance expected to exceed $500 billion, and social and sustainability bond volumes of $200 billion each. The fastest-growing segment is sustainability-linked debt, with issuance anticipated in the $100 billion range, more than 10x the $9 billion issued in all of 2020.
Holcim’s commitment is part of an emerging movement by companies, many in sectors with hard-to-abate emissions profiles, to align their ESG and climate goals with their financing strategies. Energy company Iberdrola, for example, stated earlier this year that it expects green and sustainable products to account for 63% its debt by 2025.
Holcim CFO Géraldine Picaud said:
“Sustainability is at the core of what we do. That’s why we set ourselves some of the most ambitious goals in our industry. Walking the talk, we are putting climate, water and safety at the heart of our financing strategy. To make a bigger impact, I am delighted to be a member of the UNGC CFO Taskforce to move this agenda forward with my peers.”