Woolworths (ASX:WOW) to implement $700mil sustainability bonds

Supermarket giant Woolworths (ASX:WOW) has committed to $700 million in bonds to further its goals of reducing carbon emissions.

Woolworths set $350 million on six year notes and the other $350 million on ten year notes, both under its medium term note program. This comes after Woolworths issued 550 million euros in sustainability linked bonds earlier this month.

Today’s notes link to the group’s sustainability goals and are denominated to Australian and international institutional investors. The bond structure embeds a penalty if, at the end of FY25 and FY29, the group’s scope 1 and 2 emissions are not aligned with its 2030 carbon emissions reduction target.

The F25 and F29 emissions will be assessed against its progress towards the 2030 emissions  target, measured on a straight line basis and aligned with a Paris agreement scenario of limiting global warming to 1.5 degrees.

“Following the strong level of demand for our Euro sustainability linked bond transaction, we are pleased to have provided the Australian debt capital markets with a similar domestic offering. There was strong interest in the market reflecting the growing importance of sustainability in the debt capital markets,” said chief financial officer, Stephen Harrison.

Woolworths said they will use the notes for general corporate purposes, including establishing long-term funding of their recent investments in Quantium and PFD Food Services. Both bond transactions complete the intended capital market transactions that the group had previously announced in its FY21 results. 

Shares in Wooolworths (ASX:WOW) are trading 0.3 per cent lower at $38.19.