DHL introduces Sustainability-Linked Finance Framework

DHL introduces Sustainability-Linked Finance Framework

Deutsche Post DHL Group has introduced a framework to issue sustainability-linked bonds in a bid to create sustainable financing.

With the “Sustainability-Linked Finance Framework”, DHL aims to create a direct relation between its sustainability strategy and its financing strategy.

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The framework enables the issuance of debt instruments (e.g. bonds), whose coupons are linked to the achievement of the Group’s CO2 emissions reduction target.

Depending on the Group’s performance towards net-zero emissions logistics, the interest rates of the sustainability-linked debt instruments can change.

“I am very happy about today’s announcement, as I truly believe that integrating our sustainability targets into our financing strategy accelerates the green transformation of Deutsche Post DHL Group,” said Chief Financial Officer Melanie Kreis.

“The Sustainability-Linked Finance Framework is an important milestone that shows our commitment towards permanently reducing our company’s carbon footprint.

“Furthermore, our framework is designed to serve as a financial incentive to deliver on our environmental ambitions. This creates trust and transparency for our customers and investors.”

READ: Port of Hamburg to welcome Germany’s first green ammonia import terminal

For the issuance of sustainability-linked debt instruments, DHL will use its absolute annual CO2 emissions as a key performance indicator to determine interest payments.

Going forward, the group said the framework can be used for long term debt issuances.

Missing its interim environmental target by 2030 will therefore result in higher interest rates to be paid to debt investors.

The concrete terms and conditions will depend on individual debt issuances.

SEB (Skandinaviska Enskilda Banken AB (publ)) acted as advisor for the development of the framework.

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