JOHANNESBURG, 17 JUNE 2021: Standard Bank has partnered with Woolworths Holdings Limited to execute the first sustainability-linked loan in the South African retail sector.
The R1.15 billion sustainability-linked loan is aimed at promoting the achievement of various sustainability targets, demonstrating Woolworths’ commitment to environmental, social and governance (ESG) principles and realising its vision to be one of the world’s most responsible retailers.
“Partnering closely with Woolworths to better understand their business and unpack their ESG strategy has allowed us to structure and execute a seamless, multidisciplined sustainable finance solution,” said Sasha Cook, Executive, Sustainable Finance at Standard Bank.
Sustainability-linked loans tie the terms of funding to ESG outcomes to support and incentivise responsible corporate behaviour and the creation of shared value. The structure of this facility aligns Woolworths’ financing decisions with its sustainability strategy, providing reducing interest rates depending on performance against a combination of sustainability performance targets. It is also very strongly aligned to Standard Bank’s own SEE (Social, Economic and Environmental) impact framework.
“We are very proud to conclude the first sustainability-linked loan in the retail sector in South Africa with Standard Bank. Woolworths has embedded sustainability deep into the fabric of our business and it influences almost every aspect of what we do. For many years, we have set ambitious sustainability goals and used them to inform our business strategy and internal decision-making. Linking our sustainability performance to the cost of funding is testament to our commitment to making a meaningful difference for the greater good of the planet and its people,” says Feroz Koor, Woolworths Holdings Limited Group Head of Sustainability.
Standard Bank acted as the lender, sustainability co-ordinator, and sustainability agent on the deal. The KPIs and sustainability performance targets (SPTs) agreed between Woolworths and Standard Bank, are linked to the terms of funding provided and will be assured by an independent party.
The selected KPIs cover both Woolworths’ food and fashion, beauty and home (FBH) businesses, with a focus on increasing local sourcing of FBH products, a continued focus on sustainability attributes in food products and the reduction in electricity usage in corporate stores.
The bank is playing a key role in pioneering sustainable finance in Africa and in 2021 to date, has funded and arranged a number of sustainability-linked debt instruments, both in the loan and capital markets. This includes a R1 billion sustainability-linked bond for Netcare and a R800m sustainability-linked bond for Investec Property Fund.
“Sustainability-linked debt instruments do not require proceeds to be ringfenced to specific green or social projects. Rather, they can be used for general corporate expenditure and funding terms are directly linked to the achievement of predetermined SPTs. Given this greater flexibility, the sustainability-linked category of funding instruments is expected to see significant growth in the coming years,” says Cook.
About Standard Bank Group
Standard Bank Group is the largest African bank by assets, operating in 20 African countries and 5 global financial centres. Headquartered in Johannesburg, South Africa, we are listed on the Johannesburg Stock Exchange, with share code SBK, and the Namibian Stock Exchange, share code SNB.
Standard Bank has a 158-year history in South Africa and started building a franchise outside southern Africa in the early 1990s.
Our strategic position, which enables us to connect Africa to other select emerging markets as well as pools of capital in developed markets, and our balanced portfolio of businesses, provide significant opportunities for growth.
The group has over 50 000 employees, more than 1100 branches and over 6500 ATMs on the African continent, which enable it to deliver a complete range of services across personal and business banking, corporate and investment banking and wealth management.
Headline earnings for 2020 were R15.9 billion and total assets were R2.5 trillion (about USD170 billion). Standard Bank’s market capitalisation as of 31 December 2020 was R209.4 billion (USD14 billion).
The group’s largest shareholder is the Industrial and Commercial Bank of China (ICBC), the world’s largest bank, with a 20.1% shareholding. In addition, Standard Bank Group and ICBC share a strategic partnership that facilitates trade and deal flow between Africa, China and select emerging markets.
For further information, go to http://www.standardbank.com
About Woolworths Holdings Limited
Woolworths Holdings Limited (WHL) is one of the top 40 companies listed on the JSE Limited Securities Exchange (JSE) with operations across the southern hemisphere.
The Group consists of three major operating divisions:
Woolworths Financial Services (WFS) is a joint venture between Woolworths and Barclays Africa Group, with Barclays Africa Group owning 50% + 1 share. The WFS board is constituted with directors from both WHL and Barclays Africa Group, with direction on credit policy, risk and funding aspects received from Barclays and direction on customer integration from Woolworths.
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