Sustainable Industry

Suzano is a pioneer in the Americas and in the pulp and paper industry to issue sustainable bonds

Suzano reached a key milestone as it issues Sustainability-Linked Bonds (SLBs) in the capital markets and links the use of funds to the achievement of socio-environmental goals

As an important player in the domestic industry, Suzano – the world leader in the eucalyptus pulp market – has been playing a leading role in this agenda and in advocating for regulation of carbon markets.

In the run-up to COP-26 in October-November 2021, the company announced its decision to bring forward the goal of removing 40 million tons of carbon (CO2) from the atmosphere from 2030 to 2025. In addition, its long-term goals – known as ‘Commitments to Renew Life’ – include interconnecting half a million hectares of priority areas for the conservation of biodiversity in the Cerrado, Atlantic Forest and Amazon, and generating cleaner energy while increasing renewable energy exports by 50%.

The concept of ‘green bonds’ emerge against this backdrop of long-term socio-environmental goals. The term refers to fixed-income securities designed to raise funds for projects that can generate positive environmental impacts. The domestic financial market trades in several instruments that could be described as green – including debentures. Green debentures (i.e., debt securities, or a sort of loan for companies that issue them) are key instruments in this market.

In 2020, Suzano expanded and strengthened its operations in the realm of sustainable finance. Suzano issued a Sustainability-Linked Bond (SLB) in the capital markets, and became a first-mover in the Americas and in the pulp and paper industry. Based on the principles of SLBs, Suzano linked the use of funds to the achievement of the goal of reducing greenhouse gas emissions by 15%. In the following months, other issues were tied to targets for reducing water use in industrial operations and improving the representation of women in leadership positions.

“It is quite clear that the world is moving towards a more sustainable future, and the green finance market obviously is following suit – the first sustainable bonds we issued in our industry and in the Americas were an important milestone for our company,” says Marcelo Bacci, Chief Financial, Investor Relations and Legal Officer at Suzano.

According to Marcelo, there have been four issues since 2020 in a total of US$ 2.75 billion. “Today, 39% of our debt is linked to these sustainability instruments – and sustainability now cuts across Suzano’s strategy,” he says.

Sustainability agenda – According to Suzano, in 2020 and 2021, the company managed to remove 8,896,258 tons of CO₂ from the atmosphere. This was the result of increased planted and native forest areas in the company’s forest base, as well as improved yields in eucalyptus crops.

Suzano also offers products from renewable sources, which can replace plastics and other oil-derived products, with a goal of making 10 million tons available by 2030.

The company – Suzano is a global reference in the development of sustainable and innovative solutions from renewable sources, and its goal is to renew life based on trees.

As the world’s largest producer of eucalyptus pulp and one of the largest producers of paper in Latin America, Suzano serves more than two billion people from eleven plants in operation in Brazil, in addition to the Veracel joint operation.

The company has been around for 98 years, with an installed capacity of 10.9 million tons of market pulp and 1.4 million tons of paper per year. It exports to more than one hundred countries. Its performance is driven by innovability – innovation at the service of sustainability – and by socio-environmental and corporate governance practices, with shares traded on Brazil and U.S. stock exchanges.