Whitbread issues green bonds totalling £550m

Hospitality giant Whitbread, which owns brands including Premier Inn, has priced two major green bonds at £300m and £250m respectively.

The move comes as the UK Government prepares to price its first sovereign green bond

The move comes as the UK Government prepares to price its first sovereign green bond

The period for the first, larger bond runs through to May 2027. The second, smaller bond is due in May 2031.

Funding raised through the bonds will be used to help deliver initiatives and infrastructure that will support Whitbread’s ‘Force For Good’ sustainability strategy. Updated in 2020 to reflect the impacts of the Covid-19 pandemic on the hospitality sector, the strategy includes a climate target to halve Whitbread’s carbon emissions intensity by 2025, against a 2018/19 baseline, and to deliver an 84% reduction by 2050. The firm claims that these moves will align the firm with the UK’s 2050 net-zero target.

Also detailed in ‘Force For Good’ are ambitions to eliminate unnecessary single-use plastic across the business by 2025; halve food waste by 2030; improve water stewardship, with a priority focus on water-stressed regions, and ensure human rights are being respected across the supply chain.

The way in which money raised through the bonds will be allocated in line with the Green Bond Framework published by the International Capital Markets Association. Whitbread has developed its own, similar Framework and achieved second-party approval from Sustainalytics. Whitbread has said in a statement that it will choose both new investments and refinancing activities in the coming months.

“We are particularly pleased that we have been able to reinforce Whitbread's long-term commitment to sustainability by establishing this Green Bond Framework and issuing these Green Bonds,” the firm’s group finance director Nicholas Cadbury said. “Whitbread is committed to being a force for good for all our stakeholders, including our people, customers, suppliers, in the communities in which we operate, and for the wider world around us.”

The announcement from Whitbread comes just days after it unveiled plans to install at least 600 electric vehicle (EV) chargers across its estate. It is delivering the roll-out, which it claims is the largest in the UK’s hospitality sector, in partnership with ENGIE and GeniePoint.

Green bonds boon

According to analysis from the Climate Bonds Initiative (CBI), global green bond issuance in 2020 reached a record high of $269.5bn.

Many economics experts had expected a slight downturn in issuance amid the backdrop of the recession caused by the pandemic. In the first half of the year, bonds with social sustainability requirements were faring better than “green” bonds, which typically focus purely on environmental sustainability.

Following this positive result, the CBI is forecasting that issuance could reach up to $450bn this year.

Sarah George



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