LafargeHolcim ties bond yield to carbon performance in financing first

Sources: LafargeHolcim Ltd., Zurich; CP staff

LafargeHolcim is breaking new ground in financing instruments among heavy building materials operators. Investors in its 850 million-euro ($1.03 billion) sustainability-linked bond will earn a higher coupon upon 2031 maturity should the producer not meet a primary objective—cutting net carbon dioxide emissions per ton of cementitious material output—by the end of the decade. 

“This demonstrates the company’s commitment to reach the most ambitious CO2 reduction target of the industry for 2030,” says LafargeHolcim Chief Sustainability Officer Magali Anderson. “[The] bond issuance brings our Environmental, Social and Governance related funding agreements to CHF 6 billion [$6.74 billion].”

Leading Environmental, Social and Governance consultancy ISS ESG gave a second-party opinion validating robustness of the producer’s CO2 target in the bond’s context. Officials confirmed alignment of LafargeHolcim’s Sustainability-Linked Financing Framework with the International Capital Markets Association Sustainability-Linked Bond Principles. Maryland-based ISS ESG ranks LafargeHolcim #4 out of 95 companies in the same sector, qualifying its bonds as responsible investment.

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