How sustainable finance is tackling food waste

Ahold Delhaize, one of the world's largest grocery retail groups, issues inaugural sustainability-linked bond tackling carbon emissions and food waste.

Global leader in sustainable food retail, Ahold Delhaize, already has a well-integrated Sustainable Finance strategy with both a sustainability bond and sustainability-linked RCF. Now, with its first ever sustainability-linked bond (SLB), Ahold Delhaize is accelerating its sustainability strategy to reduce its carbon footprints and food waste, ultimately enabling the transition to a low carbon economy. 


What is a sustainability-linked bond?

Sustainability-linked bonds embed an environmental, social and governance (ESG)-related key performance indicator (KPI) that issuers commit to achieve, accruing additional payments to bondholders should they fall short. Unlike green or sustainable bonds, the funds raised with this instrument are not tagged to a specific use of proceeds but for general corporate purposes. This type of bond aims to further underpin the key role that debt markets can play in funding and inspiring companies that contribute to sustainability from an ESG perspective.

This is also the first ever SLB from a food retailer to embed food waste targets into the structure, bringing a tangible and visible KPI to their investors. BNP Paribas was joint bookrunner on the €600 million transaction.

The United Nations estimates that globally food waste is responsible for 8-10% of global greenhouse gas emissions, and addressing food waste through sustainable finance innovations is an important aspect of the Ahold Delhaize SLB.

Around the world, Ahold Delhaize’s grocery retail brands serve over 54 million shoppers each week in the United States, Europe and Indonesia. This includes Stop & Shop, FreshDirect, GIANT, and Food Lion in the US, Albert Heijn, bol.com and Delhaize in Europe, and Super Indo in Indonesia, amongst others.
The SLB followsa robust framework that embeds two progressive Sustainability Performance Targets (SPT):

  • SPT / KPI 1: Reduction of Scope 1 and 2 CO2 emissions by 29% in 2025 from a 2018 baseline
  • SPT / KPI 2: Reduction of food waste by 32% in 2025 from a 2016 baseline

The Ahold Delhaize SLB centres on an ambitious climate strategy, whereby SPT1 aligns with Ahold Delhaize 2030 SBTI validated Goal to reduce absolute scope 1 and 2 GHG emissions and KPI 2 is measured according to the Food Loss and Waste Protocol.

Addressing food waste through sustainable finance innovations is an important aspect of the Ahold Delhaize SLB

The SLB, which has a 9-year maturity, is also in accordance with Ahold Delhaize’s recently published Sustainability-Linked Bond Framework, which follows the Sustainability-Linked Bond principles, as administered by ICMA.

In reference to the environmental importance of the SLB, Frans Muller, Chief Executive Officer of Ahold Delhaize, said, “It helps us accelerate the achievement of the ESG targets we set in our Healthy and Sustainable roadmap and is another important step for our organization to contribute to the 1.5-degree Paris agreement.” 

The company has developed a progressive environmental strategy, focussing on creating a healthy, low-carbon food system that secures sustainable diets for future generations.

The SLB attracted strong investor interest and Natalie Knight, Chief Financial Officer of Ahold Delhaize emphasised, “Sustainability-Linked Bonds represent the next phase of our ESG financing, where we bring our long-term commitments to tackle our carbon footprint and food waste directly to our investors. I am grateful for the trust our investors place in us.”

Ahold Delhaize’s approach also harnesses circular economy and waste prevention, and the company is a founding member of the World Resources Institute’s ’10x20x30 Food Loss and Waste Initiative’ which engages the world’s largest food retailers’ supply chains in the fight against food loss and waste.

cib_Delphine-Queniart-quote

Delphine Queniart, Global Head of Sustainable Finance & Solutions at BNP Paribas Global Markets, highlighted the innovation within the structure, “Ahold Delhaize demonstrates a truly holistic approach to their Sustainability-Linked Bond structure because they have offered investors scientific, transparent targets to tackle decarbonisation and reduce food waste, a core material part of their business.”

cib_Geert-Lippens-quote

Ahold Delhaize is headquartered in the Netherlands, and Geert Lippens, CEO & Country Head for BNP Paribas Netherlands noted, “This is a good example of our Dutch strategy where we make our worldwide expertise in sustainable finance available to our local clients. We are pleased we could contribute to Ahold Delhaize’s objectives to reduce carbon footprint and food waste across all their local markets. It will allow them to be front-runners in the decarbonisation of food retail sector. On top, the deal demonstrates our commitment to support clients in the Netherlands.”

Related solutions

ALiX

ALiX has the full power of Cortex FX in a conveniently small window on your desktop. ALiX is indisputably pixel for pixel the most powerful FX platform on the market. Understanding everything from a spot ticket to a complex option ALiX is there to save you both screen space and time.

ALiX on Symphony

Get seamless access to ALiX through Symphony – our latest evolution to streamline the way you interact with ALiX. Set up a chat with ALiX, request prices and execute trades – all on Symphony.

Americas

BNP Paribas has been present in the Americas for more than a century. We provide capital markets, securities services, financing, treasury and advisory solutions to corporates and institutional investors.

Asia-Pacific

BNP Paribas has a strong heritage in the Asia-Pacific region, having established our presence over 150 years ago. Today the bank offers one of the region’s most comprehensive branch networks and provides investors with products and solutions tailored specifically to their needs.

Brio

This platform offers clients the ability to conceptualise and test their investment strategies before connecting with their sales representative to proceed to transaction, specifically for Delta One and Quantitative Investment Solutions (QIS).

Commodity Derivatives

With a global footprint and over 30 years of expertise in the commodities market, we are one of the few banks in the world with a long term commitment to the growth of our commodity derivatives franchise bringing innovative and ground breaking solutions to clients worldwide.

Cortex ATS

The Cortex ATS is a non-displayed order book for listed equities that can be accessed by clients directly, or via any of BNP Paribas' equity execution products.

Cortex CD

Cortex CD is our online-cross commodity trading platform. It offers a wide range of hedging solutions for clients who are exposed to the price of physical commodities. The platform provides transparency and live pricing through its accessible interface and helps you track derivatives transactions on a wide range of energy and commodities.

Cortex Deposit

BNP Paribas’ corporate deposits platform, allowing you to quickly consult and securely trade deposits.

Cortex Equities

By harnessing the power of innovation, we continue to drive digital transformation and strengthen our electronic offerings for our clients by taking an agile approach.

Cortex Equities Americas

Cortex Equities connects you to the deep global pools of BNP Paribas' liquidity and our long-standing expertise to help you manage it.

Cortex FX

Cortex FX is BNP Paribas’ advanced multi-product FX trading platform

Cortex iX

Cortex intelligent execution (iX) is the cutting edge FX spot algorithm execution service from BNP Paribas

Cortex Listed

Our best-in-class Execution Management System for listed derivatives trading, powered by Fidessa

Cortex Plus

Cortex Plus is our online derivative structures platform, providing live pricing and simple click and trade execution.

Cortex Rates

Cortex Rates offers a comprehensive range of Fixed Income Interest Rates products and services

Cortex Secondary

Cortex Secondary is BNP Paribas’ secondary market trading platform.

EMEA

BNP Paribas has presence across most financial centres in Europe. Thanks to our strong local representation and long-standing relationships with governments and regulators we can offer unparalleled access to European, Middle Eastern and African markets.

Global Credit

Our combined Primary and Credit business enables us to realise synergies while maintaining strict boundaries between the public and private sides. We provide solutions to clients throughout the entire credit continuum from origination through execution to secondary market trading and post trade services.

Global Equities

Building on our long-established world-class Equity Derivatives business, BNP Paribas continues to diversify and scale our Equities offering. Clients can now access the combined strengths of our market-leading Prime Services and Cash Equities platforms.

Global Macro

Global Macro offers the full spectrum of products across FX, Rates and Commodities in both developed and emerging markets, from millisecond electronic trading supported by the most advanced AI platforms, through to long dated, high touch solutions.

Global Rates

We aim to be a top 3 house across both developed and emerging market rates. Our business has grown substantially and we operate a culture of “shared purpose”. Our focus is aligned around the social and economic outcomes of supporting our broad client base across Corporates and Institutional Investors.

IBOR

London Interbank Offered Rates (LIBORs) are being replaced by Risk-Free-Rates (RFRs) with the reform leading to multiple impacts on market participants, including changes in the way certain products and contracts operate

Markets 360

A radical new approach to strategy and economics to provide you with top quality views, focusing on evidence-based research and thought leadership. We bring economics and strategy together in thematic notes across asset classes, delivering what you need when you need it and continuously adapting to your needs.

Regulation

Effective regulatory strategy to anticipate and mitigate risks is the best protector of our business. As the regulatory landscape is continuously changing, BNP Paribas Global Markets is well placed to adapt to new regulatory challenges with agility and a focus on the future.

Smart Derivatives

Distributors of structured products face multiple challenges on a daily basis. Smart Derivatives is your digital one-stop-shop to manage the entire lifecycle of structured products and AMCs in one place. We have leveraged the best of our internal resources and partnered with fintechs to provide you with cutting-edge technologies.