Major chemical and consumer goods company Henkel has become the first company to conclude a plastic waste reduction bond.
The proceeds from the $70 million (€62.2 million) bond – a private placement with Japanese insurance companies Dai-ichi Life and Dai-ichi Frontier Life – will be specifically allocated to projects and expenditures related to Henkel’s activities to reduce plastic waste.
The bond proceeds will contribute to financing key projects and activities in line with the firm’s packaging targets for 2025. By then, the company aims to have 100% recyclable or reusable packaging and reduce the amount of fossil-based virgin plastics by 50%.
The plastic waste reduction bond underlines Henkel’s commitment to foster a circular economy and increase sustainability. Marco Swoboda, Henkel’s CFO, said: “Sustainability is not only firmly embedded in our strategic framework for the future, but also increasingly relevant for investors and the financial markets.
“We are proud to be the first corporate issuer of a plastic waste reduction bond, once more demonstrating our ability to conclude innovative sustainable investment instruments at attractive terms.
“By linking financing concepts to our plastic waste reduction initiatives, the finance team shows its continuous commitment to actively contributing to our sustainability agenda.”
Sylvie Nicol, member of the Henkel management board responsible for human resources and sustainability, commented: “Plastic waste is one of the biggest environmental challenges globally. We have reaffirmed our clear commitment to accelerate our sustainability actions and are working towards ambitious targets for reducing plastic waste and fostering a circular economy.
“This plastic waste reduction bond is a strong signal of our conviction that especially in times like these, in the midst of the current COVID-19 crisis, we need to step up our efforts to promote sustainable solutions and concepts across the whole organisation and along the entire value chain.”
Dai-ichi Life, one of the largest private life insurance companies in Japan, said it was the first-ever corporate bond to have proceeds exclusively allocated to plastic waste reduction. The general manager of the company’s global fixed income investment department, Kenjiro Okazaki, said: “As the bond is being issued by a manufacturer, the impact goes directly to the supply chain where Henkel is developing more sustainable packaging solutions, for example by increasing the amount of recycled plastic.”