Britvic has agreed its first sustainability-linked credit facility, allowing it to borrow up to £400 million over the next five years while 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 deal is linked to the progress Britvic makes against three sustainability targets: 50% of all plastic bottles in Great Britain and Ireland to be made of recycled plastic, 50% reduction in carbon emissions (when compared to 2017) and 75% of the drinks portfolio globally to be either low or no sugar. Britvic is aiming for these targets to be hit by 2025.
As part of the agreement, Britvic or the lenders will donate the proceeds from any change in margin to charitable causes.
“This financing agreement is part of our commitment to embed sustainability at the heart of our business and drive real behaviour change,” said Sarah Webster, sustainability director at Britvic.
“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 loan syndications team, added: “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.”
In November, Britvic entered into a long-term agreement with Esterform Packaging for the supply of recycled plastic (rPET), providing £5 million worth of investment towards the construction of a new rPET facility in North Yorkshire.
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