Tesco launches first sustainability-linked bond


Tesco has announced to have launched its first bond that is linked to the company’s commitment to reduce greenhouse gas emissions.

The €750m bond with a 0.375% coupon offers an 8.5-year maturity and is reported to have been issued specifically to repurchase existing bonds.

The bond is reported to be aligned to an agreed Sustainability Performance Target of reducing Scope 1 and 2 Group Greenhouse Gas Emissions by 60% by 2025 against Tesco’s 2015 Baseline.

Alan Stewart, CFO of Tesco, commented on the announcement: “I’m delighted that we have issued our first sustainability-linked bond.

“Linking our financial strategy to our long-term commitment to tackle sustainability is an important step in ensuring that this commitment is embedded across all our business operations and ensures we are driving continuous improvement.

“We are proud to be making good progress on our journey to be a net zero carbon business in the UK by 2035 and for the entire Group by 2050.”

The retailer has reported an investor demand in excess of €5bn for the new bond.

The bond will be aligned to Tesco’s newly introduced Sustainability-Bond Framework, which follows the ICMA Sustainability-Linked Bond principles, and has been independently assessed by Sustainalytics.

More information about Tesco’s Sustainability-Linked Bond Framework is available on the retailer’s website.