Anglian Water issues £250m sustainability-linked investment framework

Anglian Water has unveiled its first sustainability-linked bond framework, worth £250m, that will enable investment into low-carbon initiatives and projects that improve climate resilience across the areas where it operates.

Anglian Water issues £250m sustainability-linked investment framework

Anglian Water has a commitment to become a net-zero business by 2030

The new bond framework will assist performance against the company’s interim carbon targets to reduce capital-based carbon emissions by 65% from a 2010 baseline and operational emissions by 30% from 2019 levels by 2025. It will also unlock investment into schemes that improve climate resiliency across the east of England.

Anglian Water’s chief executive Peter Simpson said: “This framework further amplifies our commitment to the environment and the reduction of our carbon footprint. Linking it directly to Anglian Water delivering these tough carbon targets demonstrates how determined we are as a responsible business to take the steps we need to invest in resilience for our region in the most sustainable way.

“Funds raised will enable us to address the three-fold challenges of water scarcity, climate change and environmental protection in the face of a growing population, but it also represents the pinnacle in responsible financing.”

Anglian Water has previously issued a Sterling Green Bond, which was used to support its sustainability initiatives. By the end of 2020, the company had invested £876m into 850 capital investment projects.

Anglian Water has a commitment to become a net-zero business by 2030, made under a sector-wide pledge also signed by the likes of United Utilities and Yorkshire Water.

In order to meet the 2030 goal, Anglian Water has said it will rapidly scale up wind, solar and low-carbon heat across both its operations and its supply chains, while driving further efficiencies.

The firm has reduced operational emissions by 35% between 2010 and 2020 and capital or embodied carbon by 58% within the same timeframe, by focusing on these areas.

Last year, the firm unveiled an 11.6MW solar array at one of its key operational sites, as part of its net-zero vision. The 42,000-module solar array was installed at the firm’s Grafham Water site in Huntingdonshire, Cambridgeshire.

Bonds boon

The water company is the latest to ringfence funds through dedicated bonds and loans tied to environmental performance.

Earlier this month, the world’s largest protein producer, JBS, announced the issuance of a $1bn sustainability-linked bond tied to net-zero targets, while technology firm HP has unveiled its sustainable bonds framework.

Screwfix and B&Q’s parent firm Kingfisher signed for a £550m revolving credit facility agreement (RCF) with interest rates linked to environmental and community targets. Building materials and design giant Kingspan also signed for a new €700m revolving credit facility with interest rates linked to environmental targets. Kingspan’s KPIs specifically relate to reducing emissions, promoting the circular economy and water stewardship.

Sustainability-linked loans are becoming increasingly commonplace, along with the boom in corporate green bond issuance. Additional announcements in 2021 come from the likes of AB InBevThai Union and Tesco, which is now also supporting suppliers to follow suit.

Matt Mace

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