Woolworths becomes world’s first retailer to issue green bonds

From pv magazine Australia.

Woolworths has become the first supermarket in the world to issue green bonds, as part of its efforts to reduce its environmental impact. The bonds – certified by the London-based Climate Bonds Initiative (CBI) – will enable investors to support projects and assets that will deliver positive environmental outcomes, such as the installation of solar panels. According to The Australian Financial Review, the retailer plans to raise around $400 million by issuing the green bonds.

The supermarket chain recently intensified its sustainability efforts by monitoring and managing its energy consumption while reducing plastic packaging for fruit and vegetables. In February, the company announced its biggest solar installation to date – a 1.6MVa system – as part of the $57 million expansion of its Adelaide Regional Distribution Center. The $2.5 million solar array is expected to provide around one-fifth of the facility’s energy needs – enough green energy to power 300 homes.

In addition to deploying solar at its stores and distribution centers, Woolworths has also expressed interest in producing clean energy under power purchase agreements. The company recently appeared on a members list for the Business Renewables Center of Australia, an independent platform that connects corporate power purchasers with proposed renewable projects. The platform opened for business last month with 7 GW of clean energy on offer, with solar and wind technologies evenly represented.

The responsible course

Woolworths Group chief financial officer David Marr said the retailer continues to minimize its long-term impact on the environment, adding it has a responsibility as Australia’s largest retailer to lead in the space.

“We know the investment community is also looking to support companies committed to sustainability driven projects that minimize environmental impact,” Marr said. “The issuing of green bonds is another step in meeting our environmental commitment, while allowing our investors to support projects that are important to them.”

The retailer’s push into the green bond market has spurred the CBI to develop global criteria for low-carbon buildings, such as supermarkets, that could be applicable in multiple jurisdictions. The not-for-profit organisation has already developed the Climate Bonds Standard, which is used throughout the world by bond issuers, governments, investors and the financial markets. The standard provides clear, scientific criteria for selecting and monitoring assets and projects, in addition to verifying the environmental integrity and climate impact of investments.

“We applaud Woolworths for taking further steps to improve [its] environmental footprint via the issuing of the first certified green bonds by a supermarket,” said Sean Kidney, chief executive of the CBI. “Purpose-driven investors now have a further opportunity to put their money to work in mitigating long term environmental and carbon risks.”

The move comes hot on the heels of Australia’s first climate bond, which gives investors new ways to invest in solar and storage while adding momentum to the trend of “responsible investments” in clean energy assets. Clean Energy Finance Corp. (CEFC) invested $10 million in the $90.9 million green bond which was recently issued by Sydney-based financial services company FlexiGroup. CEFC noted the inclusion of energy storage receivables in the issuance as an important market development.