International food retailer Ahold Delhaize announced today the pricing of a €600 million sustainability-linked bond, with terms tied to the company’s performance towards sustainability goals including climate action and food waste.
The announcement marks the inaugural sustainability-linked bond issue for Ahold Delhaize, a leading user of innovative sustainable finance tools in the retail industry. The new issue follows the recent closing by the company of a €1 billion, sustainability-linked revolving credit facility. The company was the first retailer to issue a euro-denominated Sustainability Bond, in a €600 million financing in 2019.
Frans Muller, Chief Executive Officer of Ahold Delhaize, said:
“I am excited to issue our first Sustainability-Linked Bond today. It helps us accelerate the achievement of the ESG targets we set in our Healthy and Sustainable roadmap and is another important step for our organization to contribute to the 1.5-degree Paris agreement.”
Sustainability-linked securities have attributes including interest payments tied to an issuer’s achievement of specific sustainability targets. Ahold Delhaize’s sustainability-linked bond will adjust its coupon if the company does not achieve two Sustainability Performance Targets (SPTs) by 2025, including a reduction of Scope 1 and 2 CO2e emissions by 29% from a 2018 baseline, and a reduction of food waste by 32% from a 2016 baseline. The SPTs are aligned with Ahold Delhaize’s 2030 goals aiming to reduce Scope 1 and 2 CO2e emissions by 50% and food waste by 50%.
Natalie Knight, Chief Financial Officer of Ahold Delhaize, said:
“Sustainability-Linked Bonds represent the next phase of our ESG financing, where we bring our long-term commitments to tackle our carbon footprint and food waste directly to our investors. I am grateful for the trust our investors place in us and look forward to further partnering with them on our sustainability journey.”
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