General Mills has issued a $500 million “sustainability-linked bond” tied to its efforts to combat climate change.
The 10-year bond is linked to General Mills’ success in reducing greenhouse gas (GHG) emissions, including those generated directly by its own equipment or facilities, and those from utilities and other third parties used by General Mills. The company’s goal is to reduce GHG emissions by 30% across its value chain by 2030.
The interest owed to bond investors will increase if the company fails to reach interim GHG reduction targets by 2025. Company initiatives to reduce carbon emissions will include increasing energy efficiency within plants, buying renewable energy from utilities, and other innovations. Verification from a qualified third party on General Mills’ performance will be made public annually.
“Climate change and its effects are having an impact on our planet, people’s lives and on General Mills’ ability to live out our purpose of making food the world loves,” CFO Kofi Bruce said in a statement. “General Mills is focused on reducing emissions across our value chain, and we are making strategic financial investments connected to our sustainability goals to further advance and support this important work.”
General Mills claims this to be the first sustainability-linked bond issued by a “U.S. investment-grade consumer packaged goods company.” Earlier this year, it entered a revolving-credit facility similarly linked to GHG reductions.
