Budweiser APAC Signs $500M Sustainability-Linked Loan, with Interest Tied to Climate, Water, Other ESG Goals
Anheuser-Busch InBev subsidiary Budweiser Brewing Company APAC, the largest beer company in Asia Pacific, announced today the signing of its first sustainability-linked loan, a $500 million revolving credit facility with a bank consortium led by Bank of China.
Sustainability linked securities and loans are an emerging form of sustainable finance, with attributes including interest payments tied to an issuer’s achievement of key sustainability targets. The market for sustainability-linked debt is currently experiencing rapid growth, with a recent report from Moody’s Investor Service revealing that global sustainability-linked loans reached $97 billion in the first quarter of 2021, up 29% over the prior quarter.
According to the new agreement, interest rates on the three-year loan will be linked to the company’s achievement of ESG-related targets in key areas including climate action, water stewardship, circular packaging and smart agriculture, building up to Budweiser APAC’s 2025 Sustainability Goals. Specifically, the loan is linked to the company’s targets of achieving carbon-neutrality by 2021 in its Wuhan brewery, continuing its circular packaging practices to use 100% recycled materials, increasing water availability and quality within disadvantaged communities, and supporting agriculture through empowering its direct farmers.
Jan Craps, Bud APAC’s Chief Executive Officer and Co-chair of the Board, said
“This loan further demonstrates our unwavering commitment to integrating sustainability into all aspects of our business. As a purpose-driven company, we are confident of our ability to capitalize on this opportunity and achieve the performance-based incentive regarding ESG targets. We look forward to making our communities greener and our people healthier as we work towards a sustainable future.”