Pernod Ricard Raises €2.1 Billion Sustainability-Linked Loan, Advancing Green Commitments
Alcoholic beverage giant Pernod Ricard secures a €2.1 billion sustainability-linked loan, reinforcing its dedication to reducing emissions and enhancing water efficiency.
Alcoholic beverage giant Pernod Ricard has taken a significant step towards its sustainability goals by securing its first sustainability-linked loan of €2.1 billion. The French multinational announced the loan, which will refinance an existing credit facility set to expire next year, showcasing its commitment to reducing greenhouse gas emissions and improving water efficiency.
Under the terms of the loan, Pernod Ricard will benefit from preferential rates if it successfully achieves or surpasses its ambitious targets for greenhouse gas emissions reduction and water efficiency. The loan is directly tied to the company's science-based climate target aligned with the 2°C trajectory, aiming to reduce absolute Scope 1 (direct) and Scope 2 (power-related) emissions by 30% by 2030 compared to a 2018 baseline. Additionally, the loan is linked to the company's goal of reducing water intensity by 20% between 2020 and 2030.
Pernod Ricard has already made significant progress towards its sustainability goals, with a 15.6% reduction in Scope 1 and 2 emissions since 2010 and a 13.4% reduction in water production intensity since 2018. However, it is important to note that the majority of the company's emissions footprint (94%) falls under Scope 3, which includes indirect emissions. The new loan does not specifically address Pernod Ricard's commitment to halving Scope 3 emissions from purchased goods and services and upstream transportation by 2030.
The sustainability-linked loan has an initial maturity date of April 2028 and includes two one-year extension options. This latest financing initiative follows Pernod Ricard's issuance of two sustainability-linked bonds in 2022, totaling €1.85 billion.
Vanessa Wright, Chief Sustainability Officer at Pernod Ricard, expressed the company's commitment to reducing its environmental impact and protecting natural ecosystems, which are vital sources for the ingredients used in their iconic brands. Pernod Ricard owns well-known brands such as Beefeater gin, Absolut vodka, Malibu rum, and Jameson and Glenlivet whiskies.
Pernod Ricard joins a growing list of companies that have tied their sustainability performance to bonds and loans. Other notable firms, including Kingfisher, Kingspan, AB InBev, Thai Union, and Tesco, have also embraced similar financing models to support their sustainability objectives.
This milestone for Pernod Ricard underscores the growing trend of integrating sustainability into financial mechanisms, further driving the transition towards a more environmentally responsible and resilient future.