The new loan has a maximum maturity of three years, carries a variable interest rate based on EURIBOR, and an interest rate discount if ambitious sustainability performance targets are met.
Through the sustainability-linked mechanism, the Dutch multinational dairy cooperative commits to performance targets under three sustainability key performance indicators (KPIs) that include: a reduction of GHG emissions in its worldwide production and transport network, a decrease of GHG emissions on the dairy farms of its member farmers and increasing traceability to source key raw materials such as palm oil, soy, pulp and paper and cocoa.
The Amersfoort, Netherlands based group will have an interest rate margin reduction for each year it meets the sustainability KPIs, with an independent auditor providing validation.
FrieslandCampina says it is committed to being carbon neutral by 2050, supporting the Paris Climate Agreement. Through the agreement with ING, and the KPIs attached to that loan, the cooperative said it will also further its contribution to the UN Sustainable Development Goals (UN SDGs) 12, 13 and 17.
“We believe that incorporating sustainability metrics into every aspect of our business, from daily operations to corporate financing, is key to creating value for our stakeholders,” said Robert ter Borg, corporate director finance and reporting, FrieslandCampina.
“As one of the frontrunners in the sector, FrieslandCampina has not shied away from taking up its responsibility in the ESG challenges the dairy sector faces today and are foreseen for the future. By taking ownership and making itself accountable, [the company] not only shows commitment to address these challenges, but it also paves the way for other companies to follow. ING is very committed in supporting companies that deal with ESG risks and steer towards a lower environmental impact and this loan is a great example of that,” commented Kiran Sanchit, head of food and agri, EMEA, at ING.
