Friday, June 10 2022

Financial services firm Standard Bank and retailer Woolworths have successfully closed South Africa’s first sustainability-linked working capital facility worth R600 million.

The conclusion of the installation demonstrates Woolworths’ commitment to achieving bold sustainability goals and realizing its vision to be one of the world’s most responsible retailers, according to the parties.

The structure of the working capital facility aligns Woolworths financing decisions with its commitment to sustainability by offering discounted performance-based interest rates against a combination of sustainability performance targets.

Additionally, because sustainability-related finance links funding conditions to environmental, social and governance (ESG) outcomes, the facility supports and encourages responsible business behavior and the creation of shared value. The funding structure is also strongly aligned with Standard Bank’s Social, Economic and Environmental Impact Framework.

“This agreement is another example of our continued commitment to ensuring sustainability is embedded at the core of our business, particularly from a working capital perspective, which drives our day-to-day operational needs. We are committed to ensuring that all of our debt going forward is ESG-related wherever possible.

“Woolworths now has around 60% of our debt in line with our sustainability goals. This is our sustainability strategy in action and demonstrates our intention to make a meaningful difference for the greater good of the planet and its people,” said Woolworths Group sustainability manager. Feroz Koor.

While the second sustainability-related deal was with Standard Bank, but the first in South Africa, the bank stepped in as lender and sustainability coordinator to support Woolworths’ drive to ensure responsible management of environmental resources of the agreed key performance indicators for sustainability. These included Woolworths foods, private label fashion, beauty and home goods, and electricity consumption in company stores.

“As the first agreement related to ESG sustainability, a great deal of collaboration from internal stakeholders, such as our legal, credit and commercial teams, was required to draft the necessary ESG principles,” explains Standard Bank Consumer, Head of Sector. transactional products and services. Justin Dhunraj.

“With this pioneering achievement comes confirmation of Standard Bank’s ability to evolve and exceed new customer needs. Not only did the bank’s Corporate and Investment Banking and Transactional Products and Services (TPS) divisions negotiate uncharted waters with this deal by developing its own ESG model, but its innovative solution potentially propelled it to the forefront of industry,” says Standard Bank TPS Global Transaction Banker Tania Troskie.

“Going forward, our goal is to replicate similar ESG agreements with other clients, now that we have a solid base to work from,” she adds.

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