Standard Bank and Woolworths join forces to successfully secure R600m sustainable finance deal

Standard Bank has partnered with Woolworths Holdings Limited to successfully complete South Africa’s first sustainability-linked working capital facility worth R600 million.

This partnership demonstrates Woolworths’ commitment to achieving bold sustainability goals and realizing its vision to be one of the world’s most responsible retailers.

The structure of this working capital facility aligns Woolworths’ financing decisions with its commitment to sustainability by offering discounted performance-based interest rates against a combination of sustainability performance targets.

As sustainability-related financing links financing conditions to ESG outcomes, it supports and encourages responsible corporate behavior and the creation of shared value. The funding structure is also very strongly aligned with Standard Bank’s Social, Economic and Environmental (SEE) Impact Framework.

“This agreement is another example of our continued commitment to ensuring sustainability is embedded at the core of our business, particularly from a working capital perspective, which drives our day-to-day operational needs. We are committed to ensuring that all of our debt going forward is ESG-related wherever possible.

Around 60% of our debt at Woolworths is now in line with our sustainability goals. This is our sustainability strategy in action and demonstrates our intention to make a meaningful difference for the greater good of the planet and its people,” says Feroz Koor, Head of Sustainability Group at Woolworths.

When the second sustainability-related agreement was concluded with Standard Bank, the bank stepped in as lender and sustainability coordinator to support Woolworths’ drive to ensure responsible stewardship of environmental resources of key performance indicators of durability (SPI) agreed. These included food, fashion, beauty and household goods from Woolworths, as well as electricity consumption in company stores.

Seamless integration leads to success

Acting as a leading transactional advisory bank through its Corporate and Investment Banking (CIB) and Transactional Products and Services (TPS) divisions, Standard Bank provided a transparent ESG funding solution to support Woolworths’ journey towards achieving of its strategic sustainability objectives.

“This landmark agreement is the first of its kind from TPS SA’s perspective,” said Justin Dhunraj, Sector Head: Consumer Products, Transactional Products and Services at Standard Bank. “As the first ESG sustainability-related agreement, great collaboration from internal stakeholders, such as our legal, credit and commercial teams, was required to draft the necessary ESG principles.”

Kerry Young, Senior Legal Officer: Transactional Products and Services at Standard Bank, credits the successful completion of this transaction, within tight timelines, to the unwavering dedication and support of all Standard Bank divisions and strong customer engagement in this process, as well as their clear vision of what they wanted to get out of it. “It’s always a pleasure to work with a committed partnership team to develop a first-to-market finance product while having fun doing it,” says Alana Shapiro, Group Treasury Manager at Woolworths.

Build on a solid foundation

With this pioneering achievement comes confirmation of Standard Bank’s ability to evolve and exceed new customer needs. Not only have the bank’s CIB and TPS divisions negotiated uncharted waters with this deal by developing their own ESG model, but its innovative solution has potentially propelled it to the forefront of the industry.

“The process of dealing with Woolworths was a true reflection of our partnership and our willingness to meet our clients halfway,” says Tania Troskie, Global Transaction Banker: Transaction Products and Services at Standard Bank. “Going forward, our goal is to replicate similar ESG agreements with other clients now that we have a solid base to work from.”

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