Kingfisher enters £550m sustainability and community-linked loan

Screwfix and B&Q's parent firm Kingfisher has signed for a £550m revolving credit facility agreement (RCF) with interest rates linked to environmental and community targets.

Kingfisher is already working with partners including the Forest Stewardship Council, British Retail Consortium and the Rainforest Alliance to deliver its updated sustainability and community goals

Kingfisher is already working with partners including the Forest Stewardship Council, British Retail Consortium and the Rainforest Alliance to deliver its updated sustainability and community goals

The agreement lasts for three years and replaces two existing RCFs, which are due to expire in March 2022 and August 2023 respectively. There is the potential for two one-year extensions.

Under the loan agreement, Kingfisher will benefit from lower interest rates if it achieves KPIs aligned with its Responsible Business Plan, covering climate change, forestry and housing. The firm has been targeting a ‘net positive’ impact for people and the planet since 2015 and the updated Responsible Business Plan translates this long-term target into short and mid-term milestones.

Kingfisher’s climate ambitions centre around science-based targets, verified in line with the Paris Agreement’s 1.5C trajectory. It is aiming to cut Scope 1 (direct) and 2 (power-related) emissions by 22% by 2025 and to reduce Scope 3 (indirect) emissions by 40% within the same timeframe. The banks offering the loan will assess progress by the 2025-26 financial year.

On forestry, Kingfisher made headlines last year with a commitment to create more forests than it uses by 2025. It is working with Rainforest Alliance to deliver this goal. The loan will be linked to this ambition, plus a commitment to achieve 100% sustainably sourced wood and paper in products within the same timeframe. The current level for Kingfisher is 80.7%.

KPIs for housing, meanwhile, tie into the retailer’s commitment to help more than two million people with their housing needs in its communities of operation by the 2025-26 financial year. So far, 790,000 people have benefitted from schemes including financial and product donations.

Kingfisher’s chief financial officer Bernard Bot said the company is making “great progress” towards these goals, stating that the revolving credit facility agreement evidences a commitment to “integrate” sustainability across all business functions.

“Kingfisher has a long heritage as a responsible business,” the firm said in a statement. “Establishing a Responsible Business-linked credit facility further demonstrates our commitment to continuous improvement in areas that are material to all our stakeholders.”

Loan on me

The news from Kingfisher comes in the same week that building materials and design giant Kingspan 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. Aside from Kingfisher and Kingspan, 2021 has seen major announcements from the likes of AB InBevThai Union and Tesco, which is now also supporting suppliers to follow suit.

Sarah George



Comments

You need to be logged in to make a comment. Don't have an account? Set one up right now in seconds!


© Faversham House Ltd 2021. edie news articles may be copied or forwarded for individual use only. No other reproduction or distribution is permitted without prior written consent.