Green Financing

To support Klabin’s growth plan, the financial strategy includes an approach to debt linked to favorable market conditions integrated with performance and social and environmental commitments. In this sense, the issuance of associated financial instruments has increased progressively, reflected in the 37% of current debt linked to sustainability, as shown in the chart below. Access Klabin's first Sustainable Finance report. 

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Sustainable Finance report
Company's total gross debt
 

Several eligibility criteria were met to issue Klabin’s green bonds, respecting the four pillars that comprise the Green Bond Principles of the International Capital Markets Association (ICMA), and were certified by Sustainalytics, acting as the Second Party Opinion (SPO).

The funds originating from the issuances must be allocated to the financing and/or refinancing, in whole or in part, of investments and/or costs related to eligible “Green Projects”, which in turn are evaluated by Klabin’s sustainability governance bodies.

In 2019, Klabin became the first Brazilian company to issue securities in this category with a 30-year maturity (Notes 2049). In September 2017, the company had already issued a security, in the amount of US$ 500 million, with a term of ten years. Finally, in January 2020, a reopening (retap) of the issuance of Notes 2049 was carried out, for additional funding of US$ 200 million, totaling US$ 1.2 billion in debt of this type.

In 2023, Klabin fully verified its first green bond, issued in 2017 with a ten-year maturity, worth US$ 500 million. Currently, of the total US$ 1.2 billion issued, only US$ 272 million remains to be verified.

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Report Green Bond 2022
(tax year 2022)
Report Green Bond 2021
(tax year 2021)
Report Green Bond 2021
(jul/20 to jun/21)
Report Green Bond 2020
(jul/19 to jun/20)
Report Green Bond 2019
(jul/18 to jun/19)
Fund allocation  USD MM %
Issuance 1,200 100
Verified 1,179 98.22
Balance 21 1.78

Resorce distribuition 2017-2024 (USD MM)

 
ELIGIBILITY CRITERIA Environmental benefits Accumulated amounts (2017-2023) Unit
Native Forest Restoration and Conservation of Biodiversity Areas covered by exotic control activities in native áreas 41.868 hectares
Renewable Energy Total emissions avoided by harvested biomass 307.973 tCO2 eq/ton
Solid Waste and Wastewater Management Waste avoided being sent to a landfill 32.900 ton
Clean Transportation Total emissions avoided 67.813 tCO2 eq/ton
Energy Efficiency Total emissions avoided 13.438 ton
Sustainable Forest Management Total áreas owned by certified small and medium-sized rural producers 254.576 hectares
Sustainable Water Management Reduction of specific water consumption 11 %
Products, Technologies and Production Processes that are Eco-Efficient and/or Adapted to the Circular Economy Reduction of energy consumption 12,5 %
Adaptation to Climate Change Percentage of área monitored by a property security method 100 %

 

FRAMEWORK

Klabin’s green finance strategy has been strengthened not only through the issuance of use-of-proceeds bonds, but also through debt issuances whose financial benefits are linked to the performance of sustainability goals. These targets derive from the company's commitments in its Agenda 2030, which comprises 23 targets distributed across 23 material themes, covering areas such as building a renewable future, contributing to a sustainable economy, prosperity for people, and technology and information security.

Financial Instrument Issued Amount (USD) Validity Mechanism Linked Target 2024 Result
Sustainability-Linked Bond 500 million 2030 12.5 bps penalty if not achieved by 2025 Water – Reduce by 3.68 m³ per ton of production 3.17 m³/ton
6.25 bps penalty if not achieved by 2025 Waste – Reuse/recycle at least 97.5% of solid waste 99.35%
6.25 bps penalty if not achieved by 2025 Biodiversity – Promote the reintroduction or population reinforcement of at least two native species into the ecosystem 2 species
Sustainability-Linked Loan 800 million 2027 6.25 bps penalty (3.125 bps per target) if not achieved in 2025 and 2027 Biodiversity – Reintroduce or promote the population increase in the ecosystem of 2 extinct or endangered species by December 2025 and 3 species by December 2027 2 species
Revolving Credit Facility 500 million 2026 2.5 bps interest rate discount if the target is achieved Waste – Reuse/recycle at least 97.5% of solid waste 99.35%
Receivables Anticipation Not applicable - 5 bps interest rate discount if the target is achieved Waste – Reuse/recycle at least 97.5% of solid waste 99.35%

The following are the fiscal year results for each financial instrument linked to sustainability performance, issued and still valid for the Company.

Klabin priced a USD 500 million issuance of senior unsecured notes, linked to sustainability performance targets with a final maturity of 2030, with 2025 as the trigger for the pricing of the next interest rate.

The Key Performance Indicators (KPIs) are aligned with three targets of Klabin’s Sustainable Development Goals (KSDGs) which, in turn, are linked to the Company’s growth plan. The bonds referring to this issuance are susceptible to coupon (interest) readjustments depending on whether the targets set by the Company are reached in 2025, as defined by the Sustainability Performance Trigger (SPT).

The goals selected by Klabin in this operation – in the areas of water, waste and biodiversity – identify the Company’s ambition to increase the resilience and rationality of its model of extraction, transformation, reuse and regeneration of resources. Klabin’s influence on these three topics has a direct impact on its cost-efficiency, its ability to maintain constructive relationships with society and, ultimately, the very capacity of the ecosystem where the Company operates to respond positively to the stimuli of greater productivity, both for forest and industrial operations.

It is important to highlight that, one year before the deadline for compliance with the triggers established for 2025 and the consequent reassessment of the interest rate, the Company has achieved or exceeded the targets agreed with the market during the issuance of the bond.  

However, the early achievement of these objectives does not mean the end of efforts to meet the targets. The company's challenge remains over time, considering the execution of its growth plan and its commitment to maintaining gains.
 

Sustainability Performance Triggers (2025)

  • Water: reduction to a value equal to or below 3.68 m³ per ton of production (a 16.7% reduction compared to 2018). 2024 result: reduction to 3.17 m³/ton.
  • Waste: minimum of 97.5% reuse/recycling of solid waste. 2024 result: 99.35% reused.
  • Biodiversity: promote the reintroduction or population reinforcement of at least two species native to the ecosystem. 2024 result: 2 species reintroduced.

 

In 2022, Klabin made an amendment to the financing agreement linked to the execution of the Puma II Project, totaling USD 800 million. This financing consists of A-Loans and Co-Loans with IDB Invest, IFC, and JICA, as well as B-Loans with commercial banks ("Financing"). The amendment extended the average maturity from 3.1 years to 6.9 years while maintaining the original financing cost. Notably, the cost of the financing is now contingent upon the Company's achievement of sustainability goals. 

Linked biodiversity goal: reintroduce or promote the population increase of 2 extinct or threatened species by December 2025, and 3 species by December 2027, within the ecosystem. 2024 result: 2 species reintroduced.

If Klabin fails to meet these goals, there will be a potential increase in the financing rate of up to 6.25 basis points (bps), with 3,125 bps applied if the first goal is not met and an additional 3,125 bps if the second goal is not met.

 

Klabin has contracted a revolving credit line linked to sustainability (RCF) of US$ 500 million with nine financial institutions, maturing in October 2026. This line is linked to the sustainability indicator below, which is part of the company’s sustainable goals until 2030 in line with the UN Sustainable Development Goals (SDGs).

Waste: Minimum of 97.5% reuse/recycling of solid waste;

To learn more details about the evolution of this goal, access Sustainability-Linked Bond

In 2023, Klabin started a Sustainability-Linked prepaid receivables program. This will enable the cost of the program to be reduced by 5 bps. The annual measurements of the waste goal will be integrated into the receivables program, mirroring the measurements already established for the RCF.

 

Linked Waste Target (annual): a minimum of 97.5% of solid waste reused/recycled. 2024 Result: 99.35% reused.

 

2030 Goal: reduce specific industrial water consumption by 20%.

Sustainability Performance Target Trigger: water consumption equal to or below 3.68 m³ per ton of production (reduction of 16.7% over 2018)

(12.5 bps increase in SLB interest rate if goal is not met)

 

Rational:The calculation for specific water consumption is done by the difference between water withdrawn and water returned to the environment, divided by the Company's total production.

 

Actions Taken
  • Water Management Working Group, an internal forum composed of members from all Klabin businesses and responsible for governance, planning and
  • implementation of actions to reduce/reuse water and reuse effluents, especially in areas of water stress;
  • Engagement in watershed committees in regions of significant consumption (Paraná and Santa Catarina) and in the Goiana region (Pernambuco), an area classified as water stressed by the WRI Aqueduct tool, with active participation in water resource plans, including discussions on shared use and water use charging mechanisms;
  • Participation in the Intermunicipal Consortium of the Piracicaba, Capivari, and Jundiaí River Basins (PCJ), composed of municipalities and companies, which aims to recover the water sources in its coverage area (in the state of SP);
  • Periodic monitoring of the company's new projects with the aim of identifying initiatives with the potential to reduce water use or consumption. Monitoring is carried out through the Project Panel, a tool that allows greater visibility and control of water efficiency actions in industrial units;
  • Implementation of an internal water price at Klabin's industrial units. This value is now considered in the calculation of the Net Present Value (NPV) of projects with water saving potential, promoting more sustainable decisions aligned with the efficient management of natural resources.
  • Conduct monthly critical analysis of indicators and action plans, involving all industrial operations, including assessment of indicators related to the specific use and consumption of water at each unit, identification of deviations, opportunities for improvement, and proposal of corrective and preventive actions.
Future Actions
  • Execution of actions related to increasing water reuse and improving processes for water efficiency in all of Klabin’s plants, prioritizing initiatives at sites located in areas of water stress and in plants with high water use.
  • Continuing to hold bimonthly meetings with the Water Reduction Working Group for advances in managing the resource, in addition to critical analyses to monitor the indicator and define actions to improve results in the industrial units.
  • Development of the Klabin Water Resources Management Plan, with the participation of the sectors involved and internal (forestry and industrial units) and external (supply chain, community and public management) coverage.
Challenges
  • Maintenance of water consumption optimization, considering the production increases expected with the Company’s expansion in the next few years
Connections with other KODS 2030 targets

2030 Goal: Zero destination of industrial waste to landfills.

Sustainability Performance Target Trigger: reuse/recycling of solid waste of at least 97.5%

(6.25 bps increase in SLB interest rate if goal is not met)

Rational: goal calculated based on the proportion of solid waste reused, recycled and co-processed compared to the total solid waste generated in operations (in tons). 

In 2024, Klabin maintained its significant solid waste reuse and recycling rate at 99.35%, with the Otacílio Costa and Monte Alegre units achieving annual results of over 99.9% industrial waste reuse/recycling. In addition, the PUMA unit achieved positive results, with 99.78% recycling and reuse of industrial waste throughout the year. Once again, this result was largely due to the performance of the Puma Unit’s Waste Processing Center, where most of the unit’s waste is reused/recycled. 

The waste from the purification of strands and scraps, resulting from the production process of our recycling operations, continues to be one of the main challenges for this compromise, representing approximately 40% of the total amount of waste not reused/recycled in 2024.

 

 

Actions Taken
  • Otacílio Costa Unit (SC): Consolidation of the co-processing contract for energy recovery from non-recyclable waste, ensuring outstanding performance in the percentage of recovery/recycling of industrial solid waste throughout the year. Educational activities also helped to promote waste separation with a focus on material recycling.
  • Monte Alegre (PR), Puma (PR), and Rio Negro (PR) plants: use of dregs (Monte Alegre and Puma) and sludge (Rio Negro) waste for ceramic production.
  • Monte Alegre (PR) and Puma (PR) plants: start of operation of biological (MA and Puma) and tertiary (Puma) sludge drying systems for energy recovery.
  • Rio Verde (GO) unit: since February 2023, the unit has been reusing, recycling, and/or co-processing 100% of its industrial solid waste and operated throughout 2024 without sending any industrial waste to landfill.
  • Lages Unit (SC): disposal of sludge waste for composting and hazardous waste for co-processing. This increased the recycling and reuse rate to 86.37% in 2023 and 93.73% in 2024.
  • Manaus I (AM) and Manaus II (AM) factories: disposal of waste from the printing process for composting and hazardous waste for co-processing.
  • Conducting monthly critical analyses to monitor the indicator and define actions to improve the results of all industrial units.
Future Actions
  • Puma Unit (PR): Maintenance of the waste co-processing initiative and piloting of an alternative disposal action aimed at producing agricultural inputs from a mixture of dregs + grits + lime sludge (industrial process waste). 
  • Continuation of studies with the Research & Development area for the processing/reuse/recycling of dregs waste.
  • Goiana Unit (PE): Testing phase for the incorporation of sludge generated at the Effluent Treatment Plant in the production of ecological bricks by the regional ceramics industry.
  • Goiana Reciclados (PE), Paulínia (SP) and Piracicaba (SP) plants: Continuation of studies on the disposal of waste generated in the paper recycling process (braids and scraps) for co-processing, in collaboration with the industrial operations, sustainability and R&D areas.
  • Correia Pinto Unit (SC): Development of partnerships with companies for blending non-recyclable Class I waste to enable its co-processing, as well as the completion of studies on the agricultural use of dregs.
  • Studies on composting and/or co-processing of sludge from wastewater treatment plants at packaging units, such as Feira de Santana (BA), Jundiaí DI (SP), and Jundiaí TP (SP).
Challenges
  • Reuse of waste from purifying residual waste in recycling plants: evaluations of the use of this material in reuse/repurposing processes. In 2024, this waste represented approximately 40% of the total volume of unused materials.
  • Maintenance and ongoing development of new business models that enable the absorption of the products generated by the waste reuse initiatives.
Connections with other KODS 2030 targets

2030 Goal: reintroduce two species that are proven to be extinct and promote the population reinforcement of four more threatened species.

Sustainability Performance Target Trigger: reintroduction or population reinforcement of at least two species native to the ecosystem.

(6.25 bps increase in SLB interest rate if goal is not met)

 

                                                        Progress for the goal: 2/2 species.

 

Position of the goal in the mitigation hierarchy:

 

1. Avoid 2. Minimize 3. Restore 4. Offset
▼

 

Reintroduction of fauna

In 2024, two monitoring campaigns were carried out on the jacutinga (Aburria jacutinga), assessing its survival, dispersion, and reproductive pairing capabilities. The initiative continues the work of reintroducing the species carried out in 2022, when 30 individuals were released.  

The VHF radios that assist in monitoring the animals are reaching the end of their battery life, which was expected and is part of the process. During the last two campaigns carried out in 2024, the radios were functional. For the new monitoring stages to be carried out in 2025, in order to identify the species' adaptation and dispersion in the forest, the technical team will carry out monitoring using contemporary methods such as linear transect, direct observation, playback, camera traps, and citizen science. 

The species was selected for its ability to aid forest restoration, taking into account its home range, which can reach up to 1,000 hectares, and for being a major seed disperser, feeding on at least 46 types of native fruits.
 

Population reinforcement

In 2024, three purple-breasted parrots (Amazona vinacea) reached the final stage of the population reinforcement project in Paraná. They went through all stages of the project's rehabilitation, including new pre-release training, and may be released as early as the first quarter of 2025. The completion of the project depended on the issuance of a new Authorization for the Release of Endangered Species by the Water and Land Institute (IAT).   
The purple-breasted parrot was chosen for the population reinforcement project because it is on the list of endangered species in the region compiled by the IAT during the cumulative impact study (a condition of the Puma II Project). This species is of great ecological importance because it helps with forest restoration by dispersing seeds, mainly from araucarias, which are also an endangered species.

Actions Taken
  • Monitoring to track the dispersion of jacutingas in the forest, with analysis of feeding and reproductive behavior;
  • Participation in the workshop on the Population Management Plan (PMP) for cracids, which includes jacutingas and mutuns, organized by the Chico Mendes Institute for Biodiversity Conservation (ICMBIO). The institute organizes actions aimed at the conservation of individuals of these species, both in the wild and under human care;
  • Release of three parrots that have reached the final stage of rehabilitation.
Future Actions
  • Continuous monitoring of jacutingas using contemporary linear transect methods, direct observation with the aid of playback, and citizen science;
  • Analysis and negotiations to obtain new batches of jacutingas for the continuation of the project, reinforcing the population of the reintroduced species when necessary;
  • Monitoring, using the VHF radio system, of rehabilitated purple-breasted parrots to track their dispersion in the forest and analyze their feeding and reproductive behavior.
Challenges
  • Evaluating the success of the reintroduction of the black-fronted piping-guan, receiving new individuals of the vinaceous-breasted amazon, as well as their rehabilitation or release, which can vary according to the response of the ecosystem and includes factors such as the animals' failure to adapt and the risk of being killed by hunting or being run over. The results will be analyzed by monitoring area use by the species and further analysis of this data.
Connections with other KODS 2030 targets

Other goals regarding the Biodiversity topic:

  • Donate 1 million seedlings of native trees for the recovery of areas.

  • 100% of wildlife roadkill points with initiatives to reduce accidents.

  • Maintain or increase the number of bird species dependent on high-quality forests; and establish six partnerships or research collaborations annually in the fields of nature conservation and biodiversity studies.

Updated and verified on: 08/05/2025