Arla’s bonds are going green
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- 11 May 2021
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Arla has issued its first green bonds to help finance the transition towards a climate friendly future.
Arla has set an ambitious science-based climate target of reducing CO2e emissions by 30% in 2030 and has an ambition of becoming carbon net zero by 2050. With a strong focus on sustainability across the entire value chain, Arla is exploring all opportunities to reduce its CO2e footprint and improve its green handprint.
Now, investors can support the transition by purchasing green bonds issued by Arla. The SEK 1.5 billion (EUR 148 million) proceeds from Arla’s green bonds will be allocated to green investments within the cooperative.
“Green bonds support our green thinking and is one more step towards a carbon net zero future. As one of the largest dairy companies in the world, we owe it to consumers and climate alike to take responsibility and play our part. As a cooperative we work hard to reduce greenhouse gas emissions across the entire value chain – from farm to fork – and are taking every step possible towards a green future,” says Chief Financial Officer at Arla Torben Dahl Nyholm, adding that the decision to issue green bonds is an integrated part of Arla’s financing strategy.
Arla has successfully issued a floating rate green bond at the Swedish bond market in Swedish kronor on May 7 2021 at a credit margin of 0,68%.
“Sweden has a large corporate bond market which, combined with the fact that Arla is a household name in Sweden, makes it very attractive for Arla to utilize this market,” explains Torben Dahl Nyholm.
With asset managers, banks as well as insurance and pension funds in the Nordic countries as primary investors, the bonds were immediately overbooked with banks receiving bids for more than SEK 4 billion (EUR 396 million) before the issuance was closed at the announced SEK 1.5 billion.
The EMTN (Euro Medium Term Note) bond program with a maximum value of 750 million Euros is registered on the Irish Stock Exchange Euronext Dublin where the bonds are also listed.
Nordea has acted as Sole Sustainability Structuring Advisor to Arla, and Nordea and SEB has acted as Joint Lead Managers on the transaction.
The proceeds from the issuance will be used in accordance with Arla’s Sustainable Financing Framework, which is supported by a Second Party Opinion from Sustainalytics. Examples of how the proceeds are allocated include efficient use of biogas, water treatment and recycling, energy optimisation on Arla’s 60 production sites as well as climate checks on farms.
Read more information about Arla’s Sustainable Financing Framework as well as second party opinion from Sustainalytics
Arla Foods is an international dairy company owned by more than 8,400 farmers from Denmark, Sweden, the UK, Germany, Belgium, Luxembourg and the Netherlands. Arla Foods is one of the leading players in the international dairy arena with well-known brands like Arla®, Lurpak®, Puck® and Castello®. Arla Foods is focused on providing good dairy nourishment from sustainable farming and operations and is also the world's largest manufacturer of organic dairy products.