How Henkel Finances Its Sustainability Goals
Henkel has issued a “Plastic Waste Reduction Bond” – as the first company worldwide, as the DAX group points out. The proceeds of the bond are intended to contribute to the financing of projects and activities aimed at achieving the packaging targets for 2025.
The “Plastic Waste Reduction Bond” is a private placement that Henkel is implementing with the Japanese insurance companies Dai-ichi Life and Dai-ichi Frontier Life. The bond has a total volume of 70 million US dollars and a term of five years. The capital is to flow exclusively into projects that Henkel is setting up to reduce plastic waste. “This is the first bond issue whose proceeds will be used exclusively to reduce plastic waste,” said Kenjiro Okazaki, General Manager Global Fixed Income Investment Department at Dai-ichi Life. “As it is issued by a manufacturer, it has a direct impact on the supply chain – by enabling Henkel to develop more sustainable packaging solutions, for example through the increasing use of recycled plastic“.
Testing innovative financing
“Sustainability is not only an integral part of our strategic framework for the future, but at the same time the topic is becoming increasingly relevant for investors and the financial markets,” emphasizes Henkel CFO Marco Swoboda. “We are proud that we were the first company to agree a ‘Plastic Waste Reduction Bond’, thus once again combining innovative sustainable financing instruments with attractive conditions. Almost as a sideline, the DAX Group wants to gain experience with financial products that place sustainability aspects in the foreground. In 2018, Henkel became the first German company to agree a syndicated “Sustainability linked Loan”. This is a credit line whose terms are linked to Henkel’s performance in three independent sustainability ratings.
Ambitious goals
“Plastic waste in the environment is one of the biggest challenges worldwide,” says Sylvie Nicol, member of the Henkel Management Board responsible for Human Resources and Sustainability. “We have made a clear commitment to accelerate our sustainability activities. And we are pursuing ambitious goals to reduce plastic waste and promote a recycling economy”. By 2025, 100 percent of Henkel’s packaging should be recyclable or reusable. This excludes adhesive products, where residues can impair recyclability or contaminate recycling streams. The quantity of new plastics from fossil sources is to be reduced by 50 percent. In addition, the company wants to contribute to ensuring that no plastic waste ends up in the environment.
