Convenience and snack food company Kellogg announced today the launch of its inaugural sustainability bond issue, with the pricing of a €300 million 8-year bond, with a 0.5% interest coupon. Proceeds from the issue will be used to fund sustainability initiatives at the company ranging from food security to climate action.
Kellogg’s inaugural sustainability bond issue comes as the sustainable finance market is experiencing substantial growth. According to a report issued by Moody’s Investors Service earlier this week, global sustainable bond issuance reached a record $231 billion in Q1 2021, more than triple the same quarter last year. Amazon also launched its inaugural sustainability bond issue this week, with a $1 billion offering.
The bond is being issued under Kellogg’s newly released Sustainability Bond Framework, which outlines eligible categories for use of funds raised, project evaluation and selection criteria, management of proceeds, and reporting requirements for sustainability bond issues. According to the framework, the bond may be used to finance projects within the categories of food security and sustainable food systems, renewable energy, energy efficiency, circular economy, environmentally sustainable management of living natural resources and land use, green buildings, and sustainable water and wastewater management. The company will report annually on the use of the proceeds until they are fully allocated, and on social and environmental impact metrics.
The framework received a second party opinion from Sustainalytics, on the alignment with both the Green Bond Principles and Social Bond Principles.
Steve Cahillane, Kellogg’s Chairman and Chief Executive Officer, said:
“Sustainability is an enabler to balanced growth. It supports our bottom line through cost savings initiatives and risk mitigation, while supporting our commercial strategies to deliver topline growth.”