Henkel concludes 5-year plastic waste reduction obligation of $ 70 million


Henkel, a Düsseldorf-based manufacturer of diversified products, has become “the first company in the world” to enter into a plastic waste reduction obligation.

The company said to achieve this it combined attractive corporate finance instruments with sustainability advancements to close the bond, a private placement with Japanese insurance companies Dai-ichi Life and Dai- ichi Frontier Life, which will be specifically allocated to projects and expenses. related to Henkel’s activities to reduce plastic waste. The bond has a total volume of $ 70 million and a term of five years.

The obligation to reduce plastic waste underlines Henkel’s commitment to promote a circular economy and reduce plastic waste and therefore to Sustainable Finance. At the same time, it provides the opportunity to learn more from financial products that include sustainability characteristics. In 2018, Henkel was the first company in Germany to conclude a Syndicated “loan linked to sustainable development”, a credit facility linked to Henkel’s performance in three independent sustainability ratings.

Sustainability goals
“Sustainability is not only firmly anchored in our strategic framework for the future, but also increasingly relevant for investors and financial markets, ”said Henkel CFO Marco Swoboda. “We are proud to be the first issuer of a plastic waste reduction bond, once again demonstrating our ability to enter into innovative sustainable investment instruments at attractive terms. By linking financing concepts to our plastic waste reduction initiatives, the Finance team shows its continued commitment to actively contribute to our sustainability program. “

“Plastic waste is one of the biggest environmental challenges globally. We reaffirmed our clear commitment to accelerate our actions in favor of sustainable development and aim for ambitious objectives of reducing plastic waste and promoting a circular economy ”, added Sylvie Nicol, member of the Henkel management committee responsible for resources. human rights and sustainable development. “This plastic waste reduction link is a strong signal of our belief that, especially at times like these, in the midst of the current COVID-19 crisis, we must step up our efforts to promote sustainable solutions and concepts. throughout the organization and throughout the entire value chain.

“Dai-ichi Life promotes ESG investments and actively invests in green and social bonds. This is the very first corporate bond whose product is exclusively dedicated to reducing plastic waste. As the bond is issued by a manufacturer, the impact goes directly into the supply chain where Henkel develops more sustainable packaging solutions, for example by increasing the amount of recycled plastic ”, commented Kenjiro Okazaki, Managing Director , Global Fixed Income Investment Dept. at Dai-ichi Life. “We expect the plastic waste reduction obligation to help foster a sustainable economy and reduce plastic waste. “

Initiatives and partnerships
Proceeds from the bond will help finance key projects and activities in line with Henkel’s strategy packaging targets for 2025. By then, 100% of the company’s packaging will be recyclable or reusable *, the amount of virgin fossil-based plastics will be reduced by 50% and Henkel wants to help prevent waste from being thrown into the environment.

In addition to the development of sustainable packaging solutions, Henkel is engaged in several partnerships and cross-sector initiatives that aim to stimulate innovation in packaging development and the transition to a circular economy. For example, the company is a founding member of the Alliance to End Plastic Waste (AEPW) and partner of Plastic Bank.

HSBC acted as Green Structuring Advisor and Lead Manager on this transaction.

No other financial details of the transaction were disclosed.

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