Towards lower carbon cement

11/01/2021

LafargeHolcim partners with Societe Generale for the first sustainability-linked bond in the building materials sector

The global production of cement, the world’s most important building material, shows no signs of abating.1 Recognizing its responsibility as a global leader in building solutions to address the industry’s carbon footprint, LafargeHolcim stands at the forefront of initiatives for a transition towards low-carbon construction. 

The company has joined the Business Ambition for 1.5°C, becoming the first global building materials company to sign the pledge with intermediate targets for 2030, validated by the Science Based Targets initiative (SBTi). This commitment builds on LafargeHolcim’s leadership in green construction, with cutting-edge solutions such as ECOPact, its green concrete, and Susteno, its leading circular cement, pushing the boundaries of green construction.

“ We are proud to be the first in our industry to launch a sustainability-linked bond. The order book of EUR 2.6 billion demonstrates the confidence of investors in the company’s financial strength, strategy and ability to deliver on its sustainability targets. Societe Generale’s expertise and experience with green and sustainability-linked bonds helped make this transaction a landmark success. ”

Géraldine Picaud
Chief Financial Officer, LafargeHolcim

LafargeHolcim issued its first sustainability-linked bond for EUR 850 million in November 2020, demonstrating the strength of its long-term climate commitments and investors’ confidence in the firm’s strategy. The bond’s coupon is linked to a target to reduce emissions to 475 kg CO2 per ton of cementitious material by 2030. If the company does not meet this objective, bond investors will receive a higher coupon. LafargeHolcim's Sustainability-Linked Financing Framework is in line with the International Capital Market Association's Sustainability-Linked Bond Principles, and has been reviewed by ISS ESG.

“ The financial community is at the heart of an essential shift to more sustainable development. With this transaction, Societe Generale once again shows that it is a pioneer of banking’s response in this field. ”

Thierry Bastos,
Senior Banker, Societe Generale

“ We have continuously accompanied our clients in the sustainable bond market and are especially proud to support LafargeHolcim in issuing the first sustainability-linked bond in the building industry. ”

Martin Wagenknecht,
Head of Debt Capital Markets Germany, Austria & Switzerland, Societe Generale

Societe Generale acted as ESG Structuring Advisor and Active Bookrunner on the transaction, the first bond of its kind in the building materials industry. It was the second sustainability-linked bond the bank has worked on this year in Switzerland, further underscoring Societe Generale’s leading role in sustainable and positive impact finance.

 

 

1- “Global Cement Production, 2010-2019.” IEA – International Energy Agency, 29 May 2020, https://www.iea.org/data-and-statistics/charts/global-cement-production-2010-2019. Accessed 2 December 2020.