Britvic banks on sustainability with £400m loan facility linked to green goals.

Interest on the loan is dependent on Britvic driving progress towards its green goals to cut plastics and emissions by 2025

Soft drinks manufacturer Britvic has become the latest corporate to sign up for a sustainability-linked credit facility,  allowing it to borrow up to £400m over the next five years from a group of seven lenders coordinated by Dutch firm Rabobank, it announced yesterday.

The level of interest Britvic pays on the loan, which has the option to be extended by a further two years, is linked to its progress against three of Britvic's 2025 sustainability targets to ensure at least 50 per cent of its plastic packaging comes from recycled plastic, a 50 per cent cut in carbon emissions from 2017, and that 75 per cent of its global drinks portfolio is certified either low or zero sugar content. 

The more progress it makes towards the goals, the lower the interest Britvik will pay on the loan, although both the firm and its lenders have committed to donating the proceeds from any change in the interest to charitable causes.

"This financing agreement is part of our commitment to embed sustainability at the heart of our business and drive real behaviour change," said Sarah Webster, sustainability director at Britvic. "We've made progress against our sustainability ambitions, however there's more to do and this is a significant commercial milestone in our journey. By linking financing to our goals, we can ensure that every penny we invest is done so with our sustainability targets in mind."

Britvic - the compay behind brands such as Robinsons, Tango and J20 - was a founding member of the UK Plastic Pact in 2018, which committed the UK's biggest supermarkets, food manufacturers, and processors to eliminating single-use plastic by 2025 and ensuring all remaining plastic packaging is reusable, recyclable, or compostable by the same date. It's since directed investment towards recycling infrastructure in the UK, investing £5m in the construction of a new rPET facility in Yorkshire as part of a long-term supply deal with Esterform Packaging Limited.

Alastair Cameron from Robobank's London-based syndications team linked the deal to "a growing trend" in sustainability-linked financing.

"Sustainability was the key theme of last year and it will continue to dominate the agenda in 2020," he said. "Linking funding to metrics like developing a healthier product portfolio and recycling more plastic packaging is one way corporates like Britvic can continue to show leadership to make business more responsible and sustainable."

2019 was a boom year for sustainable finance, with overall issuance of sustainable debt products surging 26 per cent to $247bn, following analysis from Bloomberg New Energy Finance.

*Title photo : Britvic is to pay interest on the loan depending on its sustainability progress

18 February 2020

Business Green