Second-Party Opinion Download

Sustainalytics is of the opinion that the Klabin Sustainability-Linked Bond Framework aligns with the Sustainability Linked Bond Principles 2020 and considers the KPIs to be relevant and material to the issuer and the SPTs to be impactful. This assessment is based on the following:

Selection of Key Performance Indicators (KPIs)

Klabin has selected three KPIs – (i) water consumption intensity, (ii) waste reuse, and (iii) reintroduction and/or reinforcement of wild species into the ecosystem – for the Sustainability Linked Bond (SLB). Sustainalytics considers the KPIs chosen to be relevant and material for Klabin, and further considers the KPIs to be clear and credible

Calibration of Sustainability Performance Targets (SPTs)

Klabin has established SPTs to reduce water consumption by 16.7% against a 2018 baseline (equal to 3.68 m3/t of product), increase total waste reuse and recycling by 3.2% (equal to 97.5% of all hazardous and non-hazardous waste) against a 2017 baseline, and to reintroduce or reinforce at least two extinct or threatened species against the initiation year of 2019. Sustainalytics considers the SPTs to be aligned with the Issuer's sustainability strategy. Sustainalytics further considers SPT 1 and SPT 2 as ambitious and SPT 3 as moderately ambitious. The SPTs contribute to SDGs 6, 12 and 15.

Bond Characteristics

Klabin has disclosed that failure to achieve any one of the SPTs will trigger the coupon rate to increase on the observation date as follows: 12.5 bps coupon increase if KPI 1 does not meet its stated target on increase water efficiency; 6.25 bps coupon increase if KPI 2 does not meet its stated waste reuse target; and 6.25 bps coupon increase if KPI 3 does not meet its stated target for species reintroduced and/or reinforced. All KPIs will be assessed against its SPT on the observation date of December 31, 2025.

Reporting

Klabin commits to report on an annual basis, or in the event of a material change, on its performance on the KPIs in its Sustainability-Linked Securities update included within its Sustainability Annual Report, which is aligned with market expectations.

Verification

Klabin commits to obtain a limited assurance from a reviewer with relevant expertise on a yearly basis, and in case of any date or period relevant for assessing the KPI performance leading to a potential coupon adjustment on the observation date. This verification will be performed until the trigger event date of the bond has been reached. The information will be publicly shared on the Company’s website. This is aligned with market expectations.