Co-op seals five year extension to £400m sustainability-linked revolving credit facility

The Co-op has extended its main £400m bank revolving credit facility for the next five years.

It said the sustainability-linked revolving credit facility underlines Manchester-based Co-op’s continued commitment to a more sustainable future and aligns with ambitious sustainability and social goals targets initiated within the original facility agreement and the wider Co-op member-centric Vision and Strategy.

Co-op’s Revolving Credit Facility provides a backstop liquidity source with access to additional funds should they be needed to support the group’s vision and growth strategy.

Six banks support Co-op in the extended facility, National Westminster Bank, Barclays Bank, Handelsbanken, Lloyds Bank, ING Bank and Santander. 

The five-year deal announced today underscores the growing financial strength of the group, it said.

The extended bank facility links the cost of borrowing for the group to specific Co-op ESG commitments.

In pursuit of Co-op’s commitment to achieve net zero status the business aims to have 79% of suppliers enrolled in the Science Based Targets initiative by end of 2030 (starting base 47%) and targeting a reduction of c.650 tonnes of food waste per year across stores and depots.

It also introduces a new metric focusing on proportions of both women and ethnic minorities at management levels with a goal to align both with ONS published UK population data.

As a starting base, around 47% of Co-op’s Scope 3 emissions are covered by suppliers adhering to the Science Based Targets initiative.

As part of the refreshed targets linked to this facility, the Co-op is working with its supply chain to increase that figure to 79% by the end of 2030.

Efforts to support suppliers in achieving this include building cross-sector partnerships, disseminating clear sustainability guidance to suppliers, working with farmers and growers to reduce emissions from primary production, and embedding sustainability goals into contracts and joint business plans, among other initiatives.

The group said it is committed to being a diverse and inclusive employer that represents the communities it serves: “We are proud to be the only major retailer to have a female Chief Executive Officer from an ethnic minority background, a female Chief Financial Officer and a female chair of our board.

“The new metric in our bank facility sees us targeting proportions of women and proportions of ethnic minorities at management levels with a goal to align with ONS published UK population data.”

Rachel Izzard, CFO at Co-op, said: “The successful extension of our credit facility out to 2029 underscores the improved financial position of our Co-op, the balance sheet strength we now have to fuel our sustainable profitable growth ambitions, and the collective confidence in our ongoing financial resilience.

“As a Co-op we are here to create sustainable value for our more than six million active member-owners and the communities in which we operate and source from.”

She added: “It is wonderful, and true to our Co-op heritage and values, to be able to weave our social value commitments into our longer term funding strategies. I would like to personally thank our partner banks for their shared commitment in supporting these important areas, which matter so much to our member owners.”