AB InBev announces $10.1bn sustainability-linked loan
The world's largest brewer has announced what it claims is the world's largest corporate sustainability-linked loan to date, priced at $10.1bn.
Budweiser and Corona’s parent company Anheuser-Busch InBev (AB InBev) signed for the Sustainability Linked Loan Revolving Credit Facility (RCF) this week, replacing its existing $9bn RCF.
The new facility incorporates a pricing mechanism that aligns rates with Ab InBev’s progress towards its 2025 sustainability targets around renewable energy procurement, sustainable packaging, water stewardship and decarbonisation.
Specifically, rates will be calculated in line with Ab InBev’s progress to source 100% renewable electricity through its RE100 membership; increase recycled content in PET packaging to a majority proportion; improve water efficiency in breweries globally and to reduce emissions in line with climate science.
On the latter, AB InBev has committed to reducing greenhouse gas emissions by 25% by 2025 against a 2017 baseline. The Science-Based Targets initiative (SBTi) is assessing this ambition, which covers emissions from Scope 1 (direct), Scope 2 (power-related) and Scope 3 (indirect) sources.
AB InBev claims that all of its sustainability targets are aligned with the UN’s Sustainable Development Goals (SDGs).
The firm’s new RCF has an initial five-year term with the option for a further two-year extension. It is being provided by a consortium of 26 financial organisations, of which ING and Santander are acting as Joint Sustainability Coordinators.
“We are excited by the further integration of sustainable finance principles into the capital markets and welcome the opportunity to embed these practices deeper into both our finance organization and the broader company,” AB InBev’s chief financial officer Fernando Tennenbaum said.
“Our business is closely tied to the natural environment, and it is imperative that we continue to strengthen our leadership in addressing the increasing threats of climate change. Our business and our communities depend on it.”
ING’s chief executive Steven van Rijswijk called the loan “an important milestone for both AB InBev and the beverage sector as a whole” in terms of sustainability.
Earlier this week, the world’s largest seafood firm, Thai Union, announced a new $400m loan package with interest payments linked to climate, sustainability and due diligence targets.
With businesses looking to contribute to the world’s economic recovery from Covid-19 and the growing net-zero movement, this approach is becoming more common in the corporate space.
January saw Asian real estate giant City Developments Limited (CDL) confirming a new green revolving credit facility totalling $470m that will be used to refinance it’s the Republic Plaza commercial property and future low-carbon projects.