Britvic secures US$520m sustainability-linked financing deal

UK – British soft beverages producer and UK distributor of Pepsi drinks, Britvic has agreed secured its first sustainability-linked credit facility that will see the company access £400 million (US$520m) over the next five years.

Under the financing deal, Britvic will link the margin of the facility to its sustainability goals.

The soft beverage company has set three sustainability goals targeting to ensure that 50% of all plastic bottles in Great Britain and Ireland are made of recycled plastic (rPET) by the year 2025.

The company also targets to reduce 50% of carbon emissions (when compared to 2017) and further ensure 75% of the drinks portfolio globally to be either low or no sugar by 2025.

Britvic has committed to reaching these targets within the timeline under the terms of its sustainable business strategy.

The company noted that the better it performs against these targets, the further the margin of the financing will reduce.

Sarah Webster, Sustainability Director at Britvic, said: “This financing agreement is part of our commitment to embed sustainability at the heart of our business and drive real behaviour change.

“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.”

The soft beverage producer revealed that the five-year facility was co-ordinated by Rabobank and has been provided by a group of seven lenders.

In what is one of the first agreements of its kind in the UK, Britvic or the lenders will donate the proceeds from any change in margin to charitable causes.

“Sustainability-linked financing has been a growing trend for several years but this facility, which will see Britvic donate the discount proceeds to charity, is one of the first of its kind in the UK market,” Alastair Cameron, from Rabobank’s London-based loan syndications team, said:

“Sustainability was the key theme of last year and it will continue to dominate the agenda in 2020.

“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.”

Btitvic said that this credit facility represents a significant step forward on the company’s journey to operate as a fully sustainable business.

As a founding signatory of The UK Plastics Pact in 2018, Britvic committed to strict targets which aim to transform the plastic packaging system in the UK and keep plastic in the economy and out of the environment.

Each year, Britvic is also investing £850,000 in UK recycling infrastructure through its 2018 commitment to only purchase domestic Packaging Recovery Notes (PRNs) from UK recyclers.

More recently, Britvic entered into a long-term agreement with Esterform Packaging Limited for the supply of recycled plastic (rPET), providing £5 million (S$6.5m) worth of investment towards the construction of a new rPET facility in North Yorkshire.

The business has also announced targets to reduce its carbon emissions and keep the global temperature rise to within 1.5°c.

These targets were independently verified by the Science Based Target initiative. The targets follow an announcement in October 2018 to run all Britvic’s GB manufacturing sites on 100% renewable electricity.

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