Crédit Agricole CIB Closes $1.2B Sustainability-Linked Loan with Suzano
Crédit Agricole CIB has successfully closed a landmark $1.2 billion Sustainability-Linked Export Prepayment Facility with Suzano International Finance B.V. The transaction highlights Crédit Agricole CIB’s role as the Sustainability Structuring Agent, Joint Lead Arranger, and Bookrunner, further solidifying its commitment to sustainable finance and biodiversity conservation.
Suzano’s Leadership in Sustainability and Pulp Production
Suzano, a Brazilian multinational corporation, is globally recognized for its leadership in the pulp and paper industry. It stands as the world’s largest producer of pulp and one of Latin America’s foremost paper manufacturers. Suzano’s products are derived from responsibly grown, renewable sources, reinforcing the company’s commitment to environmental sustainability.
Over the years, Suzano has positioned itself as a sustainability pioneer, integrating environmental, social, and governance (ESG) principles into its operational framework. The company has established a series of ambitious goals aligned with global sustainability standards, particularly in addressing biodiversity conservation, climate change mitigation, and responsible resource management.
Key Features of the Sustainability-Linked Export Prepayment Facility
This $1.2 billion facility is uniquely structured around a single Key Performance Indicator (KPI) that focuses on increasing the number of hectares of priority areas connected through biodiversity corridors constructed by Suzano. These corridors play a critical role in preserving and restoring the ecological balance across three major Brazilian biomes: the Cerrado, Atlantic Forest, and Amazon.
The selection criteria for these biodiversity corridors and habitat fragments are meticulously designed to maximize environmental benefits. The process involves:
- Identifying larger land areas that support greater biodiversity and resource diversity.
- Ensuring high connectivity value to strengthen the resilience of the broader landscape.
- Utilizing a resistance matrix to guide corridor placements, favoring land uses that are more permeable to wildlife movement.
Suzano’s sustainability framework sets 2030 as the target for achieving substantial progress in these conservation efforts. The framework has been reviewed and validated by S&P, which provided a positive Second Party Opinion (SPO), reinforcing the robustness and credibility of Suzano’s sustainability-linked financing mechanisms.
Crédit Agricole CIB’s Commitment to Sustainable Finance
As one of the leading financial institutions in sustainable finance, Crédit Agricole CIB has continuously worked to bridge the financing gap for environmental conservation and climate action. By structuring this innovative sustainability-linked facility, the bank aims to set a precedent for how corporates can integrate biodiversity conservation into financial transactions.
Romina Reversi, Head of Sustainable Investment Banking for the Americas at Crédit Agricole CIB, emphasized the importance of such initiatives, stating: “Financing for nature falls short of what is needed to halt and reverse biodiversity loss, and few corporates have the capacity to make a direct impact in this area. Through this facility, Suzano sets a clear example of how biodiversity commitments can be structured as sophisticated KPIs to support companies in achieving ambitious biodiversity goals. We hope this paves a path for other issuers to adopt similar approaches.”
Jean Baptiste Goethals, Head of Brazil Coverage at Crédit Agricole CIB, highlighted Suzano’s trailblazing role in sustainable finance: “In 2020, Suzano became the first-ever issuer of a Sustainability-Linked Bond in the Americas and has continued to reinforce its position as a sustainable finance pioneer through the development of innovative structures and an iterative sustainability-linked financing approach. This facility, the second of its kind where Crédit Agricole CIB acts as Sustainable Structuring Agent, further demonstrates Suzano’s ambition to put sustainability at the center of its strategy. It also reflects our commitment to supporting one of our prime clients within our Brazilian portfolio in such meaningful developments.”
The Impact of Biodiversity Corridors on Environmental Conservation
The biodiversity corridors funded through this facility will play a significant role in mitigating habitat fragmentation, one of the most pressing threats to wildlife in Brazil. The Cerrado, Atlantic Forest, and Amazon biomes are home to a vast array of plant and animal species, many of which are endangered due to deforestation and habitat loss.
By connecting fragmented habitats, Suzano’s biodiversity corridors will:
- Enhance genetic exchange between wildlife populations, reducing the risk of inbreeding and species decline.
- Strengthen ecosystem resilience against climate change by maintaining ecological balance.
- Improve carbon sequestration by facilitating the regeneration of native vegetation.
- Provide alternative livelihood opportunities for local communities engaged in conservation efforts.
These biodiversity corridors align with global environmental commitments, including the United Nations Sustainable Development Goals (SDGs), particularly Goal 15 (Life on Land), which focuses on protecting terrestrial ecosystems and preventing biodiversity loss.
The Growing Role of Sustainability-Linked Financing in Corporate Strategy
Suzano’s transaction underscores a broader trend in corporate finance, where sustainability-linked instruments are increasingly being adopted by companies across industries. Unlike traditional green bonds, sustainability-linked financing ties funding conditions to specific environmental or social performance targets. This ensures that borrowers are financially incentivized to meet their sustainability commitments.
Crédit Agricole CIB has been at the forefront of this transition, leveraging its expertise to develop financial structures that align corporate growth with sustainability objectives. The bank has supported numerous companies in designing KPIs that drive meaningful impact while ensuring transparency and accountability in sustainability reporting.
Future Implications for Sustainable Finance and Biodiversity Conservation
The successful closure of this facility serves as a blueprint for future sustainability-linked transactions, particularly in sectors where environmental impact is a critical consideration. It demonstrates how financial institutions and corporations can collaborate to drive measurable environmental outcomes while ensuring business continuity and profitability.
Looking ahead, more companies are expected to integrate sustainability-linked financing into their capital structures. As investor demand for ESG-aligned investments continues to grow, sustainability-linked instruments will play a pivotal role in shaping the future of corporate finance.
Crédit Agricole CIB’s partnership with Suzano exemplifies the power of financial innovation in addressing pressing global challenges. By aligning economic incentives with environmental stewardship, such initiatives create a win-win scenario for businesses, investors, and the planet.
