Project Details
Project
Coca-Cola FEMSA Sustainability-Linked Bond Framework Second Party Opinion (2021)
Client
Coca-Cola FEMSA
Project Type
Sustainability Linked Bond or Note
Industry Group
Food Products
Use of Proceeds
N/A
Location
Mexico
Evaluation Date
Sep 2021
Evaluation Summary
Sustainalytics is of the opinion that the Sustainability-Linked Bond Framework of Coca-Cola FEMSA aligns with the Sustainability-Linked Bond Principles 2020. This assessment is based on the following:
Selection of Key Performance Indicators (KPIs)
Sustainability-Linked Bond Framework of Coca-Cola FEMSA includes one KPI: Water efficiency (see Table 1). Sustainalytics considers the KPI to be strong given that it addresses a material environmental issue with a very high scope of applicability while following a clear and consistent methodology. Sustainalytics further considers the KPI to directly measure performance on the material environmental issue of resource use while following an externally recognized definition.
Calibration of Sustainability Performance Targets (SPTs)
Sustainalytics considers the SPTs to be aligned with the Issuer’s sustainability strategy. Sustainalytics further considers the SPTs to be ambitious based on alignment with a beyond business-as-usual trajectory and a favorable comparison against the performance of industry peers.
Bond Characteristics
Coca-Cola FEMSA will link the bond’s financial/ structural characteristics to the achievement of the SPTs, namely, a coupon rate step-up provision for failing to achieve the SPT. To avoid triggering the coupon rate step-up, the SPTs need to be achieved at the relevant target observation date along with the reporting and verification commitments.
Reporting
Coca-Cola FEMSA commits to report on an annual basis on its performance on the KPI in its integrated annual report available on its website. The Company commits to disclose relevant information that affects the KPI performance, such as any re-assessments of the KPI, restatement of the SPTs, or adjustments of the baseline. The reporting commitments are aligned with the SLBP.
Verification
Coca-Cola FEMSA commits to having limited external assurance conducted on its KPI performance by the communicated SPT deadline, aligned with market expectations.