Sainsbury’s today announced it has agreed to a £200 million corporate “green” loan to invest in ongoing carbon reduction and sustainability projects. While Green Bonds are now increasingly issued by institutions to support sustainability initiatives, the retailer says this is the first time that a commercial loan has been structured to do the same.
The creation of a conventional corporate loan underpinned with clear environmental commitments ensures that Sainsbury’s — already leading the charge on efficiency in retail with its ‘Triple Zero’ stores, opened last fall — will use the funds for environmental, sustainability and water-related projects. The structure of the loan is consistent with the Green Bond Principles 2014, the guidelines developed by a leading group of bond underwriters and endorsed by environmental groups to provide a clear framework for this emerging asset class for the benefit of investors and issuers.
Lloyds and Rabobank acted as Joint Green Arrangers and Rabobank acted as Sole Mandated Lead Arranger. The loan has been accredited “Green” by Sustainalytics, a leading independent provider of environmental, social and governance (ESG) research, analysis and support services.
Sainsbury’s CFO John Rogers said: “This £200 million Green loan — which is the first of its kind in the UK — demonstrates our commitment and leadership in carbon reduction and sustainability, and shows the value we attach to environmental improvements as demonstrated by our award-winning Project Graphite program.”
According to Rogers, Project Graphite is focused on improving energy-efficiency in Sainsbury’s existing stores and investing in onsite renewable energy, and it includes measures such as upgrading to energy-efficient LED lighting, producing renewable heat from ground source heat pumps and biomass boilers, and installing solar panels on roofs and gas stations.
“The green loan will be used to fund clean energy generation, energy-efficiency and water-saving projects over a period of two to three years. It will be independently measured and monitored by a third party to evaluate its use and its positive environmental impact, and we will publish progress on the various green investments and carbon emission savings on our corporate website.”
Jan van Nieuwenhuizen, Member of the Executive Board of Rabobank, said: “Sustainability is an essential element in Rabobank’s strategy. We understand the challenges faced by our Food and Agribusiness clients and are constantly evolving our products to meet their ambitions. This green deal is a first of its kind and further emphasizes how we collaborate with our clients to meet our joint sustainability aspirations. We are thrilled that Sainsbury’s chose Rabobank to help them invest in a more sustainable future for their business.”