HP and JBS issue sustainability-linked bonds to drive towards net-zero

More and more companies are linking the performance against sustainability targets to loans and bonds

Earlier this year, JBS announced its intention to ringfence $1bn to reach net-zero emissions across its value chain by 2040, while also aiming to eliminate illegal deforestation.

The target will see JBS reduce its global Scope 1 (direct) and 2 (power-related) emissions intensity by at least 30% by 2030 compared to 2019 levels. The target will cover the company’s global operations and a supply chain that spans South America, North America, Europe, the UK, Australia and New Zealand.

The $1bn investment will be issued in incremental capital expenditure over the next 10 years, primarily focused on emissions reduction projects. It has been confirmed today (9 June) that Santander, Barclays, Bradesco BBI, BTG Pactual, Mizuho and XP have all signed on to the issuance of the bond. Global Capital reports that the $1bn sustainability-linked bond has attracted orders totalling $4.8bn, with coupons linked to the performance of the Scope 1 and 2 reduction targets.

JBS has already earmarked $100m of investment into research projects that will enable regenerative farming practices, including carbon sequestration and on-farm emission mitigation technologies.

JBS has also committed to eliminating all cases of illegal Amazon deforestation from its supply chain by 2025 and across other Brazilian regions by 2030. The wider ambition is to achieve zero deforestation across its global supply chain by 2035.

The company has faced criticism on deforestation and bailouts in the past. Mighty Earth lists that agricultural firms had received $30bn in subsidies in the last two years, including $67m for JBS. The company has also been heavily linked to deforestation in Brazil and has been listed as one of the worst polluters of US waterways.

HP

In related news, technology giant HP has announced the release of its sustainable bond framework, which will help the company build towards its climate targets. HP confirmed that the pricing of its inaugural bond notice totalled $1bn, as part of a $2bn overall debt offering to investors.

HP intends to allocate the proceeds of the sustainability notes to fund projects across eight key areas including: renewable energy, green buildings, energy efficiency, clean transportation, pollution prevention and control, the circular economy, natural resources and land use and socio-economic advancement and empowerment.

Earlier this year, the company confirmed it will transform parts of its business from a transactional model to a services-based proposition, as part of a sweeping climate strategy that will see the business’s value chain reach net-zero by 2040 and embrace closed-loop materials.

“The long-term success of our business will be inextricably linked to our ability to help solve the challenges facing the planet and society as a whole,” HP’s chief financial officer Marie Myers said.

“HP has long been a purpose-driven brand that’s anchored in strong corporate values. This offering is an important part of our overall approach to aligning the needs of our business with the needs of the world around us.”

Matt Mace