US – American multinational food company Pilgrim’s Pride has announced a US$1 billion sustainability-linked bond tied to the company’s Sustainability Performance Target (SPT) of reducing its greenhouse gas emissions by 30% by 2030.
Bloomberg reports that the interest rate on Pilgrim Pride’s new bond will climb 25 basis points if the company fails to prove through a third-party verification service that it hit its sustainability targets.
The new US$1 billion sustainability-linked bond can be interpreted as Pilgrim’s Pride attempt to put its money where its mouth is when promising improved practices.
With many consumers opting for brands with bright sustainability halos, corporations are announcing new pledges to reduce greenhouse gas emissions, improve animal welfare or boost worker conditions at an increasing rate.
In the month of March alone, major corporations such as coffee house giant Starbucks, American Meat Company JBS, and commodity trading giant Archer Daniel Midland have also made new sustainability pledges.
But some stakeholders are questioning the intent behind the announcements and whether they are truly altruistic or simply greenwashing.
For example, according to Greenpeace, none of the CPG companies that have made anti-deforestation commitments have shown significant progress on eradicating the practice from their supply chains.
Research is however, starting to show that sustainability-linked bonds can add some legitimacy to corporate initiatives while saving the borrowers money.
Maybe it’s time companies followed Pilgrim Pride’s lead and put their money where their mouth is. Saving the planet certainly requires more than lofty sustainability commitments from food manufacturers.
AeroFarms gears up for public listing
Meanwhile, vertical farming operator AeroFarms is looking at the stock market to raise funds to expand its retail distribution and market penetration.
To go public, the company has announced a merger with Spring Valley Acquisition, a publicly traded special purpose acquisition company (SPAC).
According to a statement from the vertical farming operator, the transaction with the SPAC will provide US$357 million in gross proceeds to AeroFarms and value the new company at US$1.2 billion.
In addition to fuelling growth and market penetration, Aero Farms notes that the funds from the merger will enable it construct additional farms, develop new farming technology and enter new product categories.
“Our business is at an inflection point where we will scale up our proven operational framework and begin our expansion plans in earnest,” Aero Farms CEO David Rosenberg said in a statement.
Founded in 2004, AeroFarms has built its business on producing leafy greens, and so far has grown more than 550 varieties.
AeroFarms says it achieves up to 390 times greater productivity per square foot annually versus traditional field farming while using up to 95% less water and zero pesticides.
With shoppers placing greater importance in how and where their food is produced, these attributes collectively could be lucrative marketing tools for AeroFarms.
The agricultural producer is the latest food manufacturer to turn to a SPAC. Hostess Brands, Utz Brands and AppHavest have all gone public this way, and biltong maker Stryve Foods is expected to hit the public markets following its own SPAC deal.
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