SOURCE: Arcos Dorados Holdings
SUMMARY:
The Company is the first in its industry in Latin America to link its financing strategy to its sustainable development goals, with specific targets related to reducing greenhouse gas emissions across its operation.
DESCRIPTION:
MONTEVIDEO, Uruguay, May 4, 2022 /3BL Media/ - Arcos Dorados Holdings, Inc. (NYSE: ARCO) (“Arcos Dorados” or the “Company”), Latin America’s largest restaurant chain and the world’s largest independent McDonald’s franchisee, today announced the issuance of its first Sustainability-Linked Bond (SLB), positioning the Company as the first in the Latin American restaurant industry to associate a financial instrument with environmental objectives.
“Sustainability is part of Arcos Dorados’ culture as well as our business strategy. As leaders in the private sector, we continually seek to balance our business activities with our socio-environmental impact. The issuance of this bond is an ambitious step that demonstrates our conviction that sustainability is not only the right thing to do, but it can also support a good financial strategy,” said Marcelo Rabach, Chief Executive Officer.
SLBs are debt instruments that include commitments from the issuer to meet certain ESG (Environmental, Social and Governance) targets, measured based on specific key performance indicators (KPIs), in exchange for more attractive interest rates. Arcos Dorados chose to reduce greenhouse gas (GHG) emissions throughout its operation, taking another step in the evolution of the Company’s constant and growing commitment to caring for the planet and the development of the communities in the region.
The goal established in the agreement is aligned with the Company’s previous commitment to reduce GHG emissions from its restaurants and offices by 36% and from its supply chain by 31% by 2030, both using 2021 as the base year.
Excess GHG emissions, mainly carbon dioxide, contribute to global warming, which is a major threat to the planet’s ecosystem. Driving a low-carbon economy is one of the priorities of the Company’s ESG platform, known as its Recipe for the Future, which is aligned with the Sustainable Development Goals (SDGs) established by the United Nations.
In this framework, starting in 2019, Arcos Dorados began measuring and auditing the “carbon footprint” related to its operation, which represents approximately 5.7% of its total GHG emissions. Since 2021, the Company also began measuring the carbon footprint of its suppliers, which account for more than 93% of its total GHG emissions. In other words, the KPIs chosen by the Company for this financial instrument represent almost 100% of its GHG emissions.
“We believe we have a responsibility to be an agent of positive change given our size and scale. Our commitment to reducing GHG emissions goes beyond our operations, which is why we went a step further with this bond issuance and involved our main suppliers with this commitment, thus generating a joint effort to reduce the carbon footprint of our entire operation in Latin America and the Caribbean”, said Gabriel Serber, Vice President of Social Commitment and Sustainable Development.
The issuance of the Sustainability Linked Bond will be accompanied by annual audits conducted by third parties to measure the KPIs established by the Company. In addition, as part of this transaction and in line with the Sustainability-Linked Bond Principles (SLBP), the financial instrument has the endorsement of Sustainalytics, the renowned global sustainability rating company.
“Sustainalytics considers reporting and verification commitments to be aligned with market expectations. Based on the above, Sustainalytics considers the Framework to be in alignment with the five core components of the Sustainability-Linked Bond Principles 2020 and the prospective achievement of the Sustainability Performance Targets to be impactful”, stated Sustainalytics in its report endorsing Arcos Dorados’ initiative.
With increasingly ambitious and challenging goals involving all aspects of its operation, Arcos Dorados continues to advance and strengthen its environmental commitments through its Recipe for the Future.
About Arcos Dorados
Arcos Dorados is the world’s largest independent McDonald’s franchisee, operating the largest quick service restaurant chain in Latin America and the Caribbean. It has the exclusive right to own, operate and grant franchises of McDonald’s restaurants in 20 Latin American and Caribbean countries and territories with more than 2,250 restaurants, operated by the Company or by its sub-franchisees, that together employ over 90 thousand people (as of 03/31/2022). The Company is also committed to the development of the communities in which it operates, to providing young people their first formal job opportunities and to utilize its Recipe for the Future to achieve a positive environmental impact. Arcos Dorados is listed for trading on the New York Stock Exchange (NYSE: ARCO). To learn more about the Company, please visit the Investors section of our website: www.arcosdorados.com/.
KEYWORDS: Arcos Dorados, McDonald's
