Diversified miner Anglo American issued its first sustainability-linked bond on Thursday, which includes performance targets for the group to reduce greenhouse gas emissions and freshwater abstraction and to support job creation in the communities where it operates.
The London- and JSE-listed miner said in a statement the €745m, 10-year bond is the first instrument to be issued after the publication of its sustainability financing framework.
Bond investors will be entitled to a higher final coupon payment should the company not meet certain targets. The yield is set at 4.75%, but the financing mechanism will see a coupon increase of 40 basis points accruing from September 2031 for each missed target or if the verification of the target being achieved has not been published.
The group has set itself a target of a 30% reduction in absolute greenhouse gas emissions (scopes 1 and 2) by 2030 when compared to the 2016 output. The abstraction of fresh water in water-scarce areas will reduce 50% by 2030 when compared to 2015. The company also plans to support five jobs off-site for every job on-site by 2030. These jobs, according to Anglo’s sustainability-linked financing framework published earlier in 2022, can be supported through enterprise and supplier development, targeted procurement, agricultural development, innovation-related jobs that are created in non-mining activities, or through household livelihoods support measures.
These targets reflect the three focus areas of the group’s sustainable mining plan, which are “tackling climate change, protecting our natural environment (specifically water), and playing [a] role in society”.
Once these initial targets have been achieved, Anglo aims to reach complete carbon neutrality of scope 1 and 2 emissions by 2040, as well as reduce its scope 3 emissions footprint by 50%.
The group put in place its sustainability-linked financing framework to link certain funding requirements to the sustainability objectives that have been set for the business.
The framework covers bonds, loans and other financing instruments that are linked to one or more of its sustainability performance targets.
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