Green Financing Framework
Advancing climate change, the growing global population, increasing urbanization, and new forms of mobility are enormous global challenges. Covestro faces and wants to drive solutions for these challenges, thus bringing together economic success and sustainability. The goal is to realize Covestro’s purpose: To make the world a brighter place. We are convinced that our long-term strategy of pursuing a circular economy will bring us closer to achieving our purpose.
For Covestro, becoming fully circular also includes the transition to climate neutrality. Circularity and climate neutrality are two sides of the same coin in our endeavor to build a sustainable future and economy. Since 2005, we have been successful in consistently increasing our energy efficiency and subsequently lowering our specific Scope 1 and Scope 2 greenhouse gas emissions. In the year 2022, we updated our global climate targets to align our goal of reducing greenhouse gas emissions with our new corporate vision, regulatory requirements as well as stakeholder expectations. In order to contribute in meeting with the 1.5 degree goal under the Paris Agreement ahead of the year 2050, we are determined to reach net zero Scope 1 and Scope 2 GHG emissions by the year 2035. As an intermediate goal we plan to deliver on a 60% emissions reduction for Scope 1 and 2 emissions by 2030, compared to 2020 levels.
We integrate sustainability into our business activities, while at the same time ensuring adequate focus on the issues of greatest relevance to us and our stakeholders. In addition to our responsibility for the environment, we also engage on our social responsibility within the society in accordance with our purpose. Sustainability criteria are also part of our compensation system. Starting in 2022, these will be applicable to the compensation of not only the Board of Management but to all employees. We apply a comprehensive approach to our sustainability goals, defined as early as 2016, which covers the entire product life cycle, including social, environmental, and economic aspects. Our sustainability goals contribute to achieving the United Nations’ Sustainability Development Goals (“SDGs”).
The Green Financing Framework (“GFF”) supports these strategic goals and enables Covestro to finance green projects with green financing instruments. Covestro has established this GFF under which we intend to issue green bonds and other green debt instruments to finance and/or refinance green products or projects with a clear benefit to environment and/or society. This GFF is based on the International Capital Markets Association’s (“ICMA”) Green Bond Principles (“GBP”) in their 2021 version . These ICMA GBP constitute a set of voluntary guidelines that recommend transparency and disclosure and promote integrity in the development of green financing instruments. The proposal for an EU Green Bond Standard has also been considered where possible.
Covestro obtained an independent verification assessment from ISS ESG to confirm the alignment of the Framework with the ICMA’s Green Bond Principles. The Second Party Opinion document is available on this website , together with the GFF.