The deal, which can be extended by a further two years, links Britvic’s progress towards sustainability targets to the cost of the debt facility. The better Britvic performs against these targets the further the margin will decrease.
Britvic has committed to reaching these sustainability targets by 2025:
- 50% of all plastic bottles in Great Britain and Ireland to be made of recycled plastic (rPET).
- 50% reduction in carbon emissions (when compared to 2017).
- 75% of the drinks portfolio globally to be either low or no sugar.
Sara 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.”
If Britvic meets two or three of its sustainability targets the margin will decrease and Britvic will pay any saving to charity. If Britvic meets one target the margin will remain unchanged. If Britvic fails to meet any of the three sustainability targets the margin will increase and the seven lenders will pay the difference to charity.
Fruit Shoots, Robinsons and J2O are part of Britvic’s brand portfolio.
Alastair Cameron, from Rabobank’s London-based loan syndications team, added: “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.
“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.”
As a founding member of The UK Plastics Pact (2018) Britvic has committed to strict targets, which aim to transform the plastic packaging system in the UK. Britvic’s plastic bottles, glass bottles and cans are already 100% recyclable.