Huge demand for Africa’s first sustainability-linked bond
Not only is this bond the first of its kind in the healthcare sector in Africa, it is also Africa’s first sustainability-linked bond, and is a boost to the ESG drive that is picking up pace across the continent and especially among corporates in South Africa.
Africa ESG demand picking up pace
Demand for sustainability-linked loans, green bonds and social bonds is rising fast across the continent. This is demonstrated by the high level of interest the market has expressed for this particular transaction.
“We are encouraged by the overwhelming level of interest and demand the market has expressed for sustainable product offerings which was evidenced by the extent to which the bond was oversubscribed,” says Nigel Beck, Global Head Sustainable Finance at Standard Bank.
How does this sustainability-linked bond work?
The coupon rate of this innovative sustainability-linked bond is linked to Netcare’s achievement of certain pre-agreed sustainability performance targets, helping the group achieve its longer term goals.
Over the last year, Standard Bank has worked closely with Netcare and institutional investors on this sustainability-lined product offer, advising on meaningful sustainability performance targets aligned to Netcare’s corporate strategy.
Through the offering of the sustainability-linked bond, Netcare has been able to access a “deeper pool of liquidity at a compressed upfront pricing level, with the added incentive of a quantifiable future pricing benefit while investors are able to encourage positive forward looking sustainable corporate behaviour,” says Carl Wiesner, debt capital market transactor at Standard Bank.
Netcare leader sustainability in global healthcare
The bond will further help Netcare Group, which has close to 30,000 employees, achieve its long-term sustainability ambitions which includes targets to reduce its energy consumption, procure more renewable energy, reduce total carbon emissions, and improve its water efficiency across its hospital properties.
As of 2020, the company had already made significant progress with its sustainability programme, from its 24% reduction in energy intensity per bed since 2013, to its 37% reduction in scope 1 and 2 carbon dioxide emissions since 2013, and as a result is the only healthcare institution globally to have received gold awrads in each of the four categories in the International 2020 Health Care Climate Challenge Awards.
Dr Richard Friedland, Group CEO of Netcare says, “Our comprehensive environmental sustainability strategy developed in 2013 is firmly on track to meet our 10-year goals and targets."
Four CPG giants to fund sustainable accelerator programme
Breakthrough ideas can come from anywhere and anyone. That’s the premise behind the coming together of The Coca-Cola Company, Unilever and Colgate-Palmolive in the funding and support of world-leading brewer AB InBev’s 100+ Accelerator program.
These four consumer packaged goods multinationals will leverage both their size and resources to fast-track a shift toward sustainable solutions by mobilising some of the world’s sharpest thinkers to solve some of the world’s most pressing sustainability challenges.
The aim of this collaboration is to “supercharge adoption of sustainable solutions by funding the accelerating fantastic innovations that will change the world by making all of our businesses more sustainable”, says Tony Milkin, chief procurement, sustainability and circular ventures officer at AB InBev.
“Sustainable business is smart business, and we are working to solve huge problems that no one company can handle alone. With our combined global reach, we can accelerate progress towards a more sustainable future.”
What is the 100+ Accelerator program?
Originally launched in 2018, 100+ Accelerator is a global incubator program that aims to solve key supply chain challenges across water stewardship, circular economy, sustainable agriculture and climate action.
It offers size and scale to passionate entrepreneurs to help bring their solutions to market faster, and the program’s first two cohorts have already piloted 36 innovations in 16 countries, with participating startups raising more than US$200m to help them scale globally.
Among the established innovators are those already creating huge impact on sustainability, with projects including the first solar thermal plant in Africa, recycled electric vehicle batteries that store renewable electricity in China, and upcycling saved grains from the brewing process to produce nutritious foods in the US.
- The implementation of green cleaning solutions to reduce water and energy use in brewing operations in Colombia
- Solutions delivering traceability and insurance for smallholder farmers in Africa and South America
- The collection of more than 1,000 tons of glass waste in Brazil
- Piloting returnable packaging in the United States
- Recycled electric vehicle batteries that store renewable electricity in China
- The ability to upcycle saved grains from the brewing process to produce nutritious foods in the United States
- The first solar thermal system to be installed at an AB InBev plant
How will the new program work?
So, how does it work? Applications are invited from entrepreneurs or small businesses (deadline for cohort 3 is May 31 2021) and the partners will choose 20-25 ideas which are then provided with funding.
Project aligned with goals of the CPG multinationals
The participation by all three consumer packaged goods giants is in line with each of their own sustainability goals, with each passionate about transforming global supply chains towards a greener future, and knowledgeable that “we can achieve our purpose faster and more effectively with equally committed partners”, says Patricia Verduin, CTO of Colgate.
Since launching its World Without Waste sustainable packaging platform, Coca-Cola has actively engaged the startup community for inspiration and innovation and is an inaugural investor in Circulate Capital, a fund launched in 2019 focused on ventures, infrastructure and innovations preventing the flow of plastic into oceans.
The program’s social inequality component is also aligned with Unilever’s values. “This year, we made commitments to ensure that everyone who directly provides us with goods and services receives a living wage by 2030,” says Marc Engel, chief supply chain officer of Unilever. But that’s not all. “We’re increasing our spend with suppliers from underrepresented groups and committed to train 10 million young people.”