Britvic announces sustainability-linked financial deal
Britvic has agreed its first sustainability-linked credit facility, allowing it to borrow up to £400 million over the next five years whilst linking the margin of the facility to its sustainability goals.
The five-year facility, which can be extended by a further two years, was co-ordinated by Rabobank and has been provided by a group of seven lenders. The facility is linked to the progress Britvic makes against three sustainability targets. The better Britvic performs against these targets, the further the margin will reduce.
Britvic has committed to reaching these targets by 2025 under the terms of its sustainable business strategy.
Britvic’s sustainability targets include:
- 50% of all plastic bottles in Great Britain and Ireland to be made of recycled plastic (rPET)
- 50% reduction in carbon emissions (when compared to 2017)
- 75% of the drinks portfolio globally to be either low or no sugar
In what is one of the first agreements of its kind in the UK, Britvic or the lenders will donate the proceeds from any change in margin to charitable causes. If Britvic meets two or three of its sustainability targets the margin will decrease and Britvic will pay any saving to charity. If Britvic meets one target the margin will remain unchanged. If Britvic fails to meet any of the three sustainability targets the margin will increase and the lenders will pay the difference to charity.
Sarah Webster, sustainability director at Britvic, said: “We’ve made progress against our sustainability ambitions, however there’s more to do and this is a significant commercial milestone in our journey. By linking financing to our goals, we can ensure that every penny we invest is done so with our sustainability targets in mind.”
Alastair Cameron, from Rabobank’s London-based loan syndications team, said: “Sustainability-linked financing has been a growing trend for several years but this facility, which will see Britvic donate the discount proceeds to charity, is one of the first of its kind in the UK market.
“Sustainability was the key theme of last year and it will continue to dominate the agenda in 2020. Linking funding to metrics like developing a healthier product portfolio and recycling more plastic packaging is one way corporates like Britvic can continue to show leadership to make business more responsible and sustainable.”
The business has also announced targets to reduce its carbon emissions and keep the global temperature rise to within 1.5°c. These targets were independently verified by the Science Based Target initiative. The targets follow an announcement in October 2018 to run all Britvic’s GB manufacturing sites on 100% renewable electricity.