Client stories

Mastercard celebrates debut sustainability bond

Bringing 1 billion people and 50 million small businesses into the digital economy

Mastercard is a leading global payment solutions company that operates a global electronic network linking credit and debit card issuing banks with merchants. It serves more than 20,000 member financial institutions in over 210 countries and is the second largest payment system in the US after Visa.

The company recently pledged to reach net-zero emissions by 2050 by aiming to expand the use of onsite solar technology while also decarbonising its supply chain. Mastercard, which was the first in the payments industry to gain Science Based Targets initiative (SBTi) approval for its greenhouse gas (GHG) emissions goals, has already achieved its goal of only using renewable electricity and has committed to regrow 100 million trees over five years through the ‘Priceless Planet Coalition’.

As well as protecting the environment by managing its own carbon footprint the US tech firm’s sustainability strategy is also designed to create an inclusive society by bringing 1 billion people and 50 million small businesses into the digital economy by 2025.

Last year the company reached a global milestone of achieving financial inclusion for 500 million previously unbanked people. In 2020, Mastercard committed $250 million to support the recovery of small businesses globally affected by the COVID-19 pandemic and $500 million to help close the racial wealth and opportunity gap in the US.  It also founded the Center for Creative Growth to advance equitable and sustainable economic growth and financial inclusion around the world.

To align its ambition for sustainability with its financing strategy, Mastercard, which has some of  the highest ESG ratings - from ratings agencies MSCI and Sustainalytics  - when compared to its’ tech peers, has developed a Sustainability Financing Framework, covering seven green areas and four social areas which are all aligned with the UN Sustainable Development Goals (SDGs). The eleven areas include - amongst others - expenditures for green buildings and energy efficiency, renewable energy, eco-efficient and/or circular economy adapted products, as well as activities which are advancing equitable and sustainable economic growth and financial inclusion around the world.  

Debut sustainability bond to support carbon reduction projects and inclusive growth

After launching its last debt issuance, a $4billion three tranche transaction, in March last year, the payment company returned to the capital markets twelve months later with its inaugural Sustainability Bond. The $600million, 10-year bond was priced at 1.9% and was accompanied by a traditional $700million 30-year bond at a fixed rate of 2.95%.

The transaction, which NatWest supported as Active Bookrunner, offered investors a unique opportunity to participate in a new Sustainability Bond offering from a leading technology firm, further adding to the growing momentum amongst high profile US tech companies of adopting sustainable finance frameworks and launching inaugural sustainable debt issuances.  

The proceeds from Mastercard’s Sustainability Bond will go towards carbon reduction measures, supporting environmental choices for customers, and fostering inclusive growth.

“We are all in the sustainability business”

James Tayler, Head of US Capital Markets, NatWest, commented: “We’re delighted to have supported Mastercard in helping to launch its inaugural sustainability bond. The strong success of the transaction was testament to Mastercard’s highly credible and ambitious sustainability strategy and the fantastic job that the management team did in telling their story to investors.”

Dr Arthur Krebbers, NatWest, added: “We are very pleased with the very positive investor feedback Mastercard received for its debut sustainable debt issuance. Their commitment to sustainability mirrors our own ambition to be a sustainable, purpose-led bank that champions the communities we serve and helps them to thrive.”

The information provided in this article has been prepared by National Westminster Bank Plc (NatWest) for information purposes only and is subject to change from time to time. The information and views expressed should not be treated as advice or a recommendation of any kind. NatWest makes no representation, warranty, undertaking or assurance of any kind (express or implied) with respect to the adequacy, accuracy, completeness or reasonableness of the information provided and disclaims all liability for any use you, your affiliates, connected companies, employees, or your advisers make of it. NatWest accepts no liability whatsoever for any direct, indirect or consequential losses (in contract, tort or otherwise) arising from the use of this material or reliance on the information contained herein. However, this shall not restrict, exclude or limit any duty or liability to any person under any applicable laws or regulations of any jurisdiction which may not be lawfully disclaimed. Copyright 2021 © NatWest Bank Plc. All rights reserved.

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