PORTUGAL - Sonae Arauco, one of the world's largest wood solutions companies, has subscribed its first funding linked to its sustainability performance (Sustainability-Linked Loan), amounting to 184 million euros.

The interest rate may vary according to two ESG (Environmental, Social and Governance) indicators: increase in the purchase of recycled wood and decrease in work accidents with sick leave.

According to António Castro, Chief Financial Officer at Sonae Arauco: “This funding is in line with Sonae Arauco's strategy and demonstrates that we are committed to sustained growth of our business, in which the health and safety of our employees is our top priority.”

“Linking Sonae Arauco's sustainability performance to its financial performance is a natural step on the path we have been taking to realise our vision of creating wood solutions that improve people's lives and play a relevant role in the climate change challenge”, he adds.

With this funding, Sonae Arauco commits to increase the volume of recycled wood incorporated in its products by 19% by 2026 and also establishes as a target a significant reduction in work accidents with sick leave.

The performance indicators defined have been validated by S&P and are aligned with the Sustainability-Linked Loan Principles issued by the Loan Market Association.

The operation was led by CaixaBank and also involved ABANCA, Caixa Geral de Depósitos, Export Development Canada and The Bank of Nova Scotia.