Sweden. Epiroc

The sustainability-linked loan has been provided to support Epiroc AB in achieving its climate targets. The company aims to shift the mining industry to automation, electrification and digitalisation.

Epiroc has set three key performance indicators (KPIs) for their sustainability goals, which are linked to the interest rate margin of the loan:

• KPI 1: reduce absolute Scope 1 and 2 GHG emissions by 50% from the baseline year 2019 to 2030;

• KPI 2: reduce absolute Scope 3 GHG emissions from the use of sold products by 50% from the baseline year 2019 to 2030;

• KPI 3: achieve a product offering that includes emission-free alternatives for the full product range by 2030.

KPIs 1 and 2 have been validated by the Science Based Targets Initiative (SBTi) for the 1.5°C alignment pathway.

The target achievements will be reported annually, and NIB will follow up the selected key performance indicators with the client.

Epiroc offers equipment, services and solutions for the mining and construction industries, including for rock drilling, rock excavation, rock reinforcement, haulage, exploration, tunnelling, construction, quarrying, deconstruction, and recycling. The company has approximately 19,000 employees serving customers in around 150 countries.

Productivity:

Epiroc’s research and development (R&D) will contribute to the sustainability performance targets especially by focusing on the transition from diesel powered to battery-electric machines. This will enable customers to reduce their emissions.

The mining industry will benefit from lower costs as new product offerings are expected to reduce the need of ventilation, which normally accounts for 30 to 40 percent of operating costs.

Environment:

The Scope 1 and 2 emissions, associated with the company’s own operations and purchased electricity, heat and/or steam, account for approximately 1% of Epiroc’s total GHG emissions. The company has already managed to reduce its Scopes 1 and 2 emissions by 49% during 2019-2023. As Epiroc acquire companies in locations where the sourcing of renewable energy is difficult, it is important to ensure that the level is maintained.

The Scope 3 emissions account for more than 99% of Epiroc’s total emissions, with approximately 83% deriving from customers using their products. Epiroc’s target of halving the absolute emissions from sold products by 2030 is an industry leading example that will drastically reduce the impact on the environment.

For the KPI 3, Epiroc will offer a full range of emission-free alternatives by 2025 for underground, and by 2030, for surface operations.

Overall, the targets are rated as ambitious and supports the transition of an important sector. Epiroc will report on the progress annually in its Sustainability-Linked Finance Progress Report.