Coca-Cola HBC raises US$481m for sustainability scheme in green bond issuance

SWITZERLAND – Coca-Cola Hellenic Bottling Company (HBC), the world’s third-largest Coca-Cola anchor bottler in terms of volume, has raised €500m (US$481.15m) for sustainability schemes in green bond issuance.

A green bond is a type of fixed-income instrument that is specifically earmarked to raise money for climate and environmental projects including renewable energy, sustainable resource use, conservation, clean transportation, and adaptation to climate change.

These bonds are typically asset-linked and backed by the issuing entity’s balance sheet, so they usually carry the same credit rating as their issuers’ other debt obligations. ​

The Swiss company said the net proceeds of the green bond will be allocated toward projects which meet the eligibility criteria outlined in the group’s Green Finance Framework, helping it accelerate the progress towards NetZeroby40 and Mission 2025 commitments.

The commitments include circularity, energy efficiency, water stewardship, biodiversity and community programs, innovation in sustainable packaging, and support of sustainable agriculture and procurement.

Coca-Cola HBC’s chief financial officer Ben Almanzar said: “This milestone demonstrates that sustainability is embedded in every aspect of our business, including our financing strategy.

“The issue of the green bond reinforces our position as Europe’s most sustainable beverage company. Most of all, it was made possible by the unmatched commitment of our teams to achieve net-zero across our entire value chain by 2040.”

It is not only Coca-Cola HBC taking the step to furthering its determination to “remain a leader” in sustainability.

In July, PepsiCo issued a new US$1.25bn green bond, with proceeds set to fund programs scaling regenerative agriculture, reducing emissions and packaging waste, and improving water stewardship.

The multinational beverage company and the biggest competitor of Coca-Cola announced the closing of the ten-year bond on 20 July.

This was the second green bond to have been issued by PepsiCo within three years, after closing an inaugural green bond, priced at US$1bn, in late 2019.

Earlier this month, Compass Group also announced it had raised proceeds of £250m and €500m respectively from the two bond packages, both of which are listed on the London Stock Exchange Main Market, appearing in a sub-category called the Sustainable Bond Market.

The bonds will replace an existing Eurobond from Compass Group that will reach maturity in January 2023.

According to Linklaters, the amount of sustainability-linked bonds issued globally in 2021 was ten times higher than in 2020, with a total of US$110bn raised.

The firm is projecting the valuation of the bond to rise in 2022, considering that approximately US$26bn was raised globally in the first quarter and a further US$27bn in the second quarter.

Linklater’s data show that companies in Europe are the leading issuers of sustainability-linked bonds.

 

Even as many companies are making a run for the green bonds, PricewaterhouseCoopers (PwC) says there has been an “ever-increasing” call from investors for greater transparency, disclosure, and standardization of green bonds, to ensure proceeds are correctly used and requirements of end investors are met.

 At the same time, the multinational accounting firm gives concerned that too onerous a level of requirements will deter investors.

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