Energy

Coca-Cola bottler and Rabobank partner on sustainability-linked finance plan for suppliers

Coca-Cola Europacific Partners (CCEP) has established a novel sustainability-linked finance scheme, designed to offer firms in the soft drinks bottler’s supply chain discounted financing rates if they meet key environmental and social goals.

CCEP described the financial program, to be overseen by specialist food and agri-bank Rabobank, as one of the first of its kind in the global beverage industry.

Announced Wednesday, the scheme is designed to offer incentives and rewards for CCEP suppliers which deliver sustainability improvements in their business, with the financing linked to a number of key performance indicators that, if met, will unlock incremental discounts against the initial funding rate, CCEP explained.

CCEP said the initiative would support its 2040 net zero emissions target, which also includes a goal to reduce greenhouse gas emissions across its entire value chain by 30 percent by the end of the decade, against a 2019 baseline.

Over 90% of the bottler’s emissions are attributed to its supply chain.

“We know how crucial it is that we work together with our suppliers to decarbonize our businesses, and are committed to providing the support and solutions they need to help them reduce emissions, aligned with our own sustainability goals,” said Ralph Peters, vice president of procurement at CCEP. “Our new supply chain finance program is another important step that will help us to take collective action — by implementing positive and impactful change and driving continuous sustainability improvements.”

Over 90 percent of CCEP’s emissions are attributed to its supply chain, and the firm said it had previously asked its suppliers to take three actions to make impactful carbon reductions in their businesses. These include setting and validating reduction targets with the Science Based Targets Initiative (SBTi), committing to using 100 percent renewable electricity across their operations, and sharing their carbon footprint data, all by 2023.

The new sustainability linked finance scheme aims to build on these ambitions, while also setting fresh KPIs for CCEP suppliers in order to help improve their overall ESG ratings, which it said would be assessed by sustainability ratings provider EcoVadis.

Initially launched in Germany, the financing program is then set to expand to the drinks giant’s suppliers across the rest of Europe, Australia and New Zealand, it said.

Rabobank has been tapped to provide initial funding to the program, while other banks are also expected to participate and grow the facility over time.

CCEP plans to partner with Rabo Foundation to support one of its farmer programs in Indonesia.

In addition, CCEP plans to partner with Rabo Foundation — Rabobank’s social impact fund — to support one of its farmer programs in Indonesia that promote the adoption of sustainable practices and farm inputs to increase yields and achieve better long-term economic strength.

“Coming up with solutions to help businesses achieve their sustainability targets runs to the heart of all of our financing initiatives and Growing a Better World Together strategy,” said Thomas Levin, managing director of coverage at Rabobank.

Zwier Smith, director of value chain finance at Rabobank, also welcomed the announcement of the program, adding: “We’re confident that by providing an enhanced sustainability-linked supplier finance program for CCEP, we can create a more responsible and sustainable food and beverages industry that everyone benefits from.”

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