Mastercard issues $600m sustainability bond to help finance net-zero transition

Mastercard has issued a $600m sustainability bond and is planning to make use of proceeds to additional its alignment with the UN’s Sustainable Growth Objectives (SDGs) and ship its 2050 net-zero pledge.

The enterprise mentioned in an announcement that the Sustainability Financing Framework that can be used to allocate bond proceeds has been verified externally by Sustainalytics, consistent with the Inexperienced Bond Ideas, Social Bond Ideas, Sustainability Bond Pointers and Inexperienced Mortgage Ideas – all frameworks designed to unify best-practice on this area.

The Framework is designed to advance funding in eleven areas, every referring to a number of of the SDGs. The areas are inexperienced buildings; power effectivity; renewable power; environment friendly and round merchandise, manufacturing applied sciences and processes; air pollution prevention and management; sustainable useful resource and land administration; local weather change adaptation; the Mastercard Impression Fund; the Covid-19 response; advancing inclusion and equality and commercially sustainable impression. This final space pertains to abilities, schooling and help for workers, clients and communities.

Mastercard’s overarching sustainability targets embrace pledges to deliver one billion people and 50 million small companies into the digital economic system by 2025 and to achieve net-zero emissions throughout all scopes by 2050. On this latter pledge, the firm has developed Science-Based Targets for 2025, aligned with 1.5C. It has already switched to 100% renewable electrical energy globally, that means that main remaining emissions sources embrace heating, cooling and the provision chain.

Mastercard’s chief govt officer Michael Mielbach mentioned the targets, and the bond designed to help their supply, have been created in recognition of the truth that the enterprise “can not achieve a failing world”.

“Irrespective of the place you’re employed or reside, we’re all within the sustainability enterprise; the way forward for folks, our planet and the economic system are inextricably linked,” he mentioned.

“To ship constructive social and environmental impression at scale firms must spend money on the know-how, insights, and partnerships to make packages commercially sustainable for the long run. Our Sustainability Bond will help each social and inexperienced initiatives to drive inclusive and sustainable development for our firm and the communities we serve around the globe.”

The brand new bond has a ten-year interval and a set price of 1.9%. It was issued concurrently a  separate, non-sustainability-related $700m bond, which has a 30-year interval.

Final 12 months, edie spoke to Mastercard’s chief sustainability officer Kristina Kloberdanz as a part of our ongoing #SustyTalk series of video interviews. You possibly can watch that interview, in which she discusses the need for partnership and collaboration for the SDGs, here.

Inexperienced company finance

Mastercard is one in every of a number of big-name companies to have issued new monetary choices with sustainability hyperlinks for the reason that new 12 months.

January noticed Asian actual property big Metropolis Developments Restricted (CDL) confirming a new green revolving credit facility totalling $470m that can be used to refinance its Republic Plaza business property and future low-carbon initiatives.

Then, in February, Anheuser-Busch InBev (AB InBev) announced what it claims is the world’s largest company sustainability-linked mortgage up to now, priced at $10.1bn, whereas Thai Union announced a new $400m loan package with curiosity funds linked to local weather, sustainability and due diligence targets.

Equally, Premier Inn owner Whitbread priced two main inexperienced bonds at £300m and £250m respectively, and  EN+ Group’s Metals business confirmed that it has raised $200m beneath a brand new sustainability-linked pre-export finance facility. The ability’s rate of interest is topic to a reduction if the enterprise meets its decarbonisation targets; it’s notably striving for net-zero by 2050, with an interim goal to scale back absolute emissions by 35% by 2030.

Vogue big H&M Group moreover issued a €500m sustainability bond in February and can use proceeds to extend recycled materials sourcing and cut back emissions throughout the enterprise.

There has additionally been motion within the sovereign inexperienced bond area. After profitable issuance from nations together with Germany and Sweden final 12 months, UK Chancellor Rishi Sunak used this week’s Budget speech to substantiate that the UK will challenge at the very least £15bn of inexperienced gilts this monetary 12 months. Additionally this week, Italy has issued the largest sovereign green bond to date, priced at €8.5bn.

Sarah George