Deutsche Post DHL Group integrated sustainability targets intoits business strategy at an early stage and is now taking it a stepfurther by allowing to link the Group’s sustainability targets toits future long-term financial instruments, hence further expandingits commitment to sustainability. To this end, the company has nowintroduced a framework which allows it to issuesustainability-linked bonds in the future.
With its "Sustainability-Linked Finance Framework”, DeutschePost DHL Group created a direct relation between its sustainabilitystrategy and its financing strategy. The framework enables theissuance of debt instruments (e.g. bonds), whose coupons are linkedto the achievement of the Group’s aspirational C02 emissionsreduction target. Depending on the Group’s performance towardsnet-zero emissions logistics, the interest rates of thesustainability-linked debt instruments can change.
“I am very happy about today's announcement, as I truly believethat integrating our sustainability targets into our financingstrategy accelerates the green transformation of Deutsche Post DHLGroup. The Sustainability-Linked Finance Framework is an importantmilestone that shows our commitment towards permanently reducingour company’s carbon footprint. Furthermore our framework isdesigned to serve as a financial incentive to deliver on ourenvironmental ambitions. This creates trust and transparency forour customers and investors”, said Chief Financial Officer MelanieKreis.
For the issuance of sustainability-linked debt instruments,Deutsche Post DHL Group will use its absolute annualCO2 emissions as a key performance indicator to determineinterest payments. In doing so, the Group is stressing the urgencyto decarbonize the entire logistics sector and underscores itscommitment towards reducing the Group’s greenhouse gas emissions tobelow 29 million tonnes of CO2e by 2030. This emissions target isin line with the Paris Agreement and was validated and approvedthrough the Science-Based Targets initiative (SBTi) in October,2022. In 2017, the company announced its goal to reduce alllogistics-related emissions to net zero by 2050. In doing so,Deutsche Post DHL Group is contributing to the Paris climateprotection agreement's goal of limiting global warming 1.5 degreesCelsius and also supports the United Nations' Agenda 2030.Goingforward, the framework can be used for long term debt issuances.Missing its ambitious interim environmental target by 2030 willresult in higher interest rates to be paid to debt investors. Theconcrete terms and conditions will depend on individual debtissuances. SEB (Skandinaviska Enskilda Banken AB (publ)) acted asadvisor for the development of the framework.