Newmont becomes first miner to sell sustainability-linked bonds

Newmont Corp has sold US$1 billion of sustainability-linked bonds that will give it a financial incentive to cut emissions and improve corporate governance, in a first for the global mining sector.

The world’s largest gold miner by production will pay investors in the 10-year bonds a higher interest rate if it fails to cut emissions, or fails to sufficiently boost the percentage of women in its senior leadership positions by 2030.

Sales in sustainability-linked bonds have surged in recent months to reach a record $105 billion for the year, compared to just $10 billion in the whole of 2020, according to Bloomberg data.

Sustainability-linked bonds allow companies to tap into the ESG bond market to fund just about anything provided they pledge to meet certain social or environmental thresholds. That flexibility is attracting companies that don’t have specific green ventures to fund, including corporations in the largest carbon-emitting industries. The energy-intensive metals and mining sector produces about a quarter of the reported emissions of the world’s 12,000 largest companies.

Denver-based Newmont aims to reduce scope 1 and 2 greenhouse gas emissions by 32% by 2030 based on a 2018 baseline, and slash indirect (scope 3) emissions – including from waste, business travel and employee commuting – by 30% in the same period. It also plans to achieve 50% representation of women in senior leadership positions by 2030.

If the company fails to reach these 2030 targets, the interest rate payable on the bonds will be increased.