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UK's The Co-op Raises £300 Million Through 'Sustainability Bond'

Published on May 30 2019 8:39 AM in Retail tagged: Sustainability / Co-op / Fairtrade

UK's The Co-op Raises £300 Million Through 'Sustainability Bond'

UK retailer The Co-operative has become the first to issue a sterling denominated Sustainability Bond, it said in a statement.

The retailer revealed that it has raised £300 million (€340 million) and will proceed to allocate proceeds exclusively on its work on supporting and promoting Fairtrade, including supporting Fairtrade producers and their communities.

Fairtrade

The Co-op's leadership on Fairtrade comes as some other major retailers are scaling back their investments, a key source of support for communities around the developing world, it said.

The company said that it intends to allocate the net proceeds of the Sustainability Bond issuance to the costs of bringing Fairtrade products to customers, marketing and promoting Fairtrade products and the wider Fairtrade movement.

The Sustainability Bond is a five year plan which will pay investors an annual interest of 5.125%.

The retailer plans on raising funds through the Sustainability Bond, which will allow it to access long-term funding at an attractive rate.

This will also enable global investors to increase their focus on investments that meet the UN's Sustainable Development Goals and key environmental and sustainability targets.

Sustainability Bond Framework

According to the statement, the Co-op has developed a Sustainability Bond Framework under which any subsequent bond issuance will allow the Co-op to locate funds to its spend on education, via its Academies Trust.

This provides access to responsibly sourced produces, alleviates water poverty and delivering energy efficient technology to lower emissions.

The framework has been reviewed by environmental and social governance experts Vigeo Eiris, which have issued a Second Party Opinion and have expressed their highest level of assurance on the Co-op's commitments and the bond's overall contribution to sustainability, according to the statement.

“The popularity of this bond demonstrates confidence in the Co-op’s growth strategy and in particular how we’ve placed sustainability at the heart of our future plans." said Steve Murrells, CEO, Co-op.

"Co-op was an early pioneer of Fairtrade and now with the support of like-minded investors we can grow it further, opening up new opportunities and creating value for our members as well as producers and communities in developing countries.” he said.

This issuance is the first in a series of planned re-financing that will see the Co-op raise funds to fuel its growth plans, within its debt ceiling of £900 million.

© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Helen Galgey. Click subscribe to sign up to ESM: The European Supermarket Magazine.

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