Co-op raises £300m for Fairtrade through bond

In a first for a UK retailer, the Co-op has raised £300 million through a sustainability bond to support the Fairtrade Foundation.

Proceeds from the bond, which pays 5.125 per cent interest over five years, will go towardssupporting and promoting Fairtrade, including Fairtrade producers and their communities.

Co-opsaid it intends to allocate the net proceeds of the bond to the costs of shipping Fairtrade products, producing new ones and funding marketing.

The retailer said raising funds through a sustainability bond allows itto access long-term funding at an attractive rate and enables global investors to increase their focus on investments that meet the UN’s Sustainable Development Goals and key environmental and sustainability targets.

Thesupermarket chainhas developed a sustainability bond framework under which any subsequent bond issuance will allow theCo-opto allocate funds to its spend on education, via its Academies Trust, alleviating water poverty, providing access to responsibly sourced products and delivering energy-efficient technology to lower emissions.

The bond is the first in a series of planned re-financing that will see theCo-opraise funds to fuel its growth plans, within its debt ceiling of £0.9 billion.

Commenting on the bond, Co-op’s chief executive Steve Murrells said: “The popularity of this bond demonstrates confidence in theCo-op’s growth strategy and in particular how we’ve placed sustainability at the heart of our future plans.

“Co-opwas an early pioneer of Fairtrade and now with the support of like-minded investors we can grow it further, opening up new opportunities and creating value for our members as well as producers and communities in developing countries.”