Britvic signs for £400m sustainability-linked loan
Beverage manufacturing giant Britvic has signed for a £400m loan, whereby it will pay lower margins if it delivers progress against its plastics, emissions and nutrition targets.
The five-year credit facility will allow Britvic to benefit from lower margins if it successfully delivers against its 2025 targets to replace half of virgin plastic used to make bottles sold across the UK and Ireland with recycled content; to halve carbon emissions against a 2017 baseline, and to ensure 75% of its global beverage portfolio consists of no-sugar or low-sugar products.
If Britvic meets just one of these targets in full, its margin will remain unchanged. If it meets two or three, the margin will decrease and Britvic will donate any saving made against the original margin to charity.
On the flip side, a failure to meet any of the 2025 targets will see the margin increase. If this happens, Rabobank, which is coordinating the loan, will donate the difference between the original and the increased margin to charity.
Once the 2025 deadline has passed, Britvic is expected to re-evaluate its sustainability targets and update its strategy. The firm, which owns brands such as J20 and Robinsons, will then have the option to extend the loan term for a further two years.
Britivc’s sustainability director Sarah Webster said the financing agreement will “drive real behaviour change” among teams making financial decisions. Webster has more than two decades of experience across the investment and sustainability spheres of the beverage and consumer goods sectors.
“We’ve made progress against our sustainability ambitions, however there’s more to do and this is a significant commercial milestone in our journey,” Webster said. “By linking financing to our goals, we can ensure that every penny we invest is done so with our sustainability targets in mind.”
Britvic notably switched to 100% renewable electricity across its UK manufacturing portfolio in 2018 and is on-course to achieve zero-waste-to-landfill status this year.
Drinking in sustainability
In related news, Lucozade Ribena Suntory (LRS) has this month unveiled new factory infrastructure which will reduce the amount of water and energy used to make each bottle of its product by 40%.
Japanese parent firm Suntory Beverage & Food announced last year that it would invest £13m to bring a high-speed, ultra-efficient bottling line online at LRS’s Coleford factory in Gloucestershire.
The line, which was switched on last week, uses heat and pressurised air instead of water to clean bottles before they are filled. It is expected to reduce the factory’s annual energy and water consumption by almost 5%.
In what is a significant step towards achieving our ‘Growing for Good’ vision, we're delighted to declare our new £13M bottling line officially open! 🎉— LRSuntory (@LRSuntory) February 14, 2020
More on our water & energy-efficient line which enables us to create more lower-sugar drinks here 👉 https://t.co/Y4C9tZUtg7 pic.twitter.com/bxUP8jfnpg
Suntory Beverage & Food was founded on the promise of "Mizu To Ikiru", which translates directly to “living with water”.
At the Coleford factory specifically, LRS’s work to deliver against that promise has seen boreholes installed at the site, allowing 50% of the water consumed there to come directly from the firm’s own land. This minimises water wastage and reduces the company’s impact on external local natural resources. The factory is aiming to reduce its water consumption by 15% by 2030, against a 2018 baseline.
On energy, the Coleford site is ISO 14001 certified and is aiming to reduce its carbon footprint by one-quarter over the next decade.