Clariant, a Swiss multinational speciality chemical company, has announced that it has successfully priced its first green bond. The coupon on the CHF 175 million ($roughly $181 million) green bond is 2.717 %, and it matures in 2027. There were two joint lead managers for this green bond issue, UBS Investment Bank and Skandinaviska Enskilda Banken (SEB). The Green Bond, which is denominated in Swiss francs, has its settlement date slated for September 26, 2022.
How Clariant intends to use the bond’s funds
Clariant says that it will channel the bond proceeds towards funding new investments in “Eligible Assets”. Also, part of the funds will refinance existing investments, in accordance with the company’s Green Financing Framework. The top ESG data and rating source, ISS ESG, provided an independent assessment of the framework’s conformity to the Green Bond Principles, the Green Loan Principles and sustainability principles.
Company leadership sees this environmentally friendly financing option as a major step toward achieving Group-wide sustainability. This is because it gives bond investors with a focus on environmental responsibility a chance to back the company’s position as an industry leader in this area. The world is increasingly prioritising environmental sustainability. Therefore, in the coming years, most investors will likely prefer companies that have the “green” agenda in their growth strategies.
Clariant is the one that decides which assets qualify as eligible. However, these assets are generally those that advance the transition toward a a more eco-sensitive society. That means less carbon emissions and environmentally-responsible development. Renewable energy and energy efficiency, pollution prevention and control, circular economy adopted products and products certified as eco-efficient are all examples of what falls into that class of assets.
Green bond funds used to finance or refinance an Eligible Asset will help Clariant get closer to its ambitious goals. One major goal is to cut greenhouse gas emissions in scopes 1 and 2 by 40% and those in scope 3 by 14%. Both emission reduction goals are for purchases of goods and services between 2019 and 2030.