UK retailer Tesco has launched its first bond linked to the company’s commitment to reduce greenhouse gas emissions.
The bond, which Tesco claims is a 'first of its kind' to be issued by a retailer, is valued at €750 million with a 0.375% coupon and offers an 8.5-year maturity.
The bond is a testament to Tesco's commitment to sustainability, as it was one of the first businesses to set a zero-carbon goal in 2009 at a global level.
It was also the first FTSE 100 Company to set science-based carbon reduction targets on a 1.5-degree trajectory.
Alan Stewart, CFO, Tesco, said that pairing its "financial strategy to our long-term commitment to tackle sustainability is an important step in ensuring that this commitment is embedded across all our business operations."
Revolving Credit Facility
The move follows an announcement in October 2020 where Tesco established a £2.5 billion revolving credit facility, with interest linked to the achievement of three ambitious environmental targets.
The bond is aligned to an agreed Sustainability Performance Target (SPT) of reducing Scope 1 and 2 Group Greenhouse Gas (GHG) Emissions by 60% by 2025 against its 2015 baseline.
Tesco has taken a number of steps to become more eco-friendly and achieve its sustainability targets, including reducing group GHG emissions against a 2015 baseline, sourcing 97% of electricity from renewable sources, creating three new solar farms, introducing a new fleet of electric delivery vehicles in London, and removing non-recyclable plastic from packaging.
The group aims to become a net-zero carbon business in the UK by 2035.
© 2021 European Supermarket Magazine – your source for the latest retail news. Article by Conor Farrelly. Click subscribe to sign up to ESM: The European Supermarket Magazine.