Coca-Cola bottler raises €500m for sustainability schemes in green bond issue

The net proceeds of the green bond will be allocated toward projects which meet the eligibility criteria outlined in the group’s Green Finance Framework.

They will accelerate progress of the company’s NetZeroby40 and Mission 2025 commitments. These include circularity, energy efficiency, water stewardship, biodiversity and community programmes, innovation in sustainable packaging, and support of sustainable agriculture and procurement.

Coca-Cola HBC said this latest step is “further evidence” of its determination to “remain a leader” in sustainability.

Coca-Cola HBC’s chief financial officer Ben Almanzar said: “This milestone demonstrates that sustainability is embedded in every aspect of our business, including our financing strategy.

“The issue of the green bond reinforces our position as Europe’s most sustainable beverage company. Most of all, it was made possible by the unmatched commitment of our teams to achieve net-zero across our entire value chain by 2040.”

Green bond boom

Coca-Cola is not the only food and beverage giant to launch green bonds.

In July, PepsiCo issued a new $1.25bn green bond, with proceeds set to fund programmes scaling regenerative agriculture, reducing emissions and packaging waste and improving water stewardship.

The multinational announced the closing of the ten-year bond on Wednesday 20 July. It is the second green bond to have been issued by PepsiCo within three years; it closed its inaugural green bond, priced at $1bn, in late 2019.

And earlier this month, Compass Group announced it had raised proceeds of £250m and €500m respectively from the two bond packages.

Both were listed on the London Stock Exchange Main Market, appearing in a sub-category called the Sustainable Bond Market.

The bonds will replace an existing Eurobond from Compass Group that will reach maturity in January 2023.

Green bonds raise funds for new and existing projects which deliver environmental benefits, and a more sustainable economy.

‘Green’ can include renewable energy, sustainable resource use, conservation, clean transportation, and adaptation to climate change.

According to Linklaters, the amount of sustainability-linked bonds issued globally in 2021 was ten times higher than in 2020, with a total of $110bn raised. 2022, it is predicting, will be even stronger. $26bn was raised globally in the first quarter and a further $27bn in the second quarter. Linklaters has recorded that companies in Europe are the leading issuers of sustainability-linked bonds.

According to PwC, there has been an “ever-increasing” call from investors for greater transparency, disclosure, and standardisation of green bonds, to ensure proceeds are correctly used and requirements of end investors are met. At the same time, there is a concern that too onerous a level of requirements will deter investors.

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