Cementing a milestone for emerging markets and sustainability targets - BNP Paribas CIB
 
Thursday 15 October 2020

CEMEX's $3.2bn Sustainability-Linked Loan (SLL) targets CO2 reduction and is the largest SLL to date in Latin America and the emerging markets.


Mexico's CEMEX, one of the largest cement producers in the world, issued its first sustainability-linked loan (SLL) in October, with five rigorous key performance indicators (KPIs) that will help the company meet stringent CO2 emissions-reduction standards under the Paris Climate Accord.

The $3.2 billion SLL is the largest to date in Latin America and emerging markets. BNP Paribas served as a Mandated Lead Arranger and the Sole Sustainability Coordinator.

Leading the way in low carbon cement

Among CEMEX's more ambitious goals is a 35% reduction in CO2 emission per ton of cement, which the company sees as a crucial step toward achieving net zero CO2 concrete production by 2050. CEMEX's move is leading the way in an industry that accounts for 8% of the world's total CO2 emissions.

Here is the full list of all the CEMEX's KPI objectives:

  • Reduction of net CO2 emissions
  • Increased use of green energy sources by 2025
  • Implementation of water-management plans for arid regions
  • Boosting biodiversity and third-party certification of active quarry sites
  • Reduction in the percentage of average clinker content in cement

A vital industry in transition

With an estimate of more than 4 billion tonnes produced annually, cement is the world's most commonly used manufactured material, and its carbon emission is largely due to limestone calcination during the production process, as well as fossil-fuel consumption for both kiln heating, mining and transportation.

Cementing its reputation

The company's SLL is the latest move in CEMEX's sustainability commitment. Since helping launch the Cement Sustainability Initiative in 1999, which subsequently issued a global methodology for cement companies to calculate and report on CO2 emissions, CEMEX has maintained a leadership role in ESG, from emissions standards and climate change activity to biodiversity, and health and safety.

Sustainability research agency Sustainalytics recently named CEMEX the leader in carbon-reduction commitment as well as the firm with the lowest Carbon – Own Operations risk rating.

"It was an honor for BNP Paribas to be the Sole Sustainability Coordinator for this SLL on behalf of CEMEX, a sustainability pioneer for the cement industry," said Anne Van Riel, Co-head, Sustainable Finance Capital Markets, Americas, BNP Paribas Americas. "As the leader in the SLL market, we continue to solidify our position as a bank that works toward accelerating the transition to a lower-carbon economy."

Sustainable finance in Latin America
Sustainable finance continues to evolve in Mexico and across Latin America. In September, BNP Paribas acted as Joint Bookrunner and Billing & Delivery agent for Mexico's 7-Year €750 million Sovereign Sustainable Development Goals Bond, the first of its kind in the world, which seeks to finance eligible SDG-oriented programs across the country.

In August 2020, Chilean pulp and paper company Empresas CMPC S.A. (CMPC) launched the most comprehensive SLL in Chile to date, a $100 million syndicated revolving credit facility (RCF) structured as an SLL. BNP Paribas served as Joint Lead Arranger and Sole Sustainability Coordinator for CMPC's financing as well as administrative agent of the facility.



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