Kesko finances growth with a €300 million loan in which the interest is linked to sustainability targets

Press release / 07.10.2019 08:00

Kesko has made a financing agreement of €300 million, in which the interest margin will increase or decrease depending on Kesko’s ability to meet the sustainability targets set for its carbon footprint, food waste, and audits conducted in high-risk countries. Kesko will draw down €300 million now, and has the possibility to draw down more later on.

“Sustainability-linked financing has started to grow significantly in Europe this year, and this loan will spur K Group’s sustainability efforts. Mitigating climate change is very important to us, and we have been implementing related actions for years, for example, in the areas of energy efficiency and the purchasing of renewable energy. Kesko is the only Finnish trading sector company included in the esteemed Dow Jones Sustainability Indices, and this arrangement is an extension of our internationally recognised sustainability efforts,” says Kesko’s CFO Jukka Erlund.

The interest margin for the loans will increase or decrease depending on Kesko’s ability to meet three sustainability targets:

a) Reducing carbon dioxide emissions from Kesko’s own operations and purchased energy

b) Reducing food waste

c) Conducting social responsibility audits for suppliers in high-risk countries

The syndicated loan agreement comprises a three-year €300 million loan, and an additional €300 million conditional loan. The agreement may be extended twice, for one year at a time. OP Corporate Bank acted as the credit coordinator, with Nordea and SEB as other creditors.

Kesko has also agreed with Handelsbanken on a Revolving Credit Facility of €100 million linked to the same sustainability targets. The three-year facility may be extended twice, for one year at a time.

Obtaining financing linked to sustainability criteria and corporate sustainability targets linked to credit limit implement the objectives of Kesko’s sustainability strategy and its Science Based Targets commitment: to mitigate climate change, Kesko has committed to reducing its emissions by increasing the use of renewable energy and by improving its energy efficiency.

K Group is implementing actions to combat climate change on many fronts. For example, all electricity purchased by Kesko in Finland for K-stores and other Kesko properties comes from renewable sources, and K Group is the biggest producer and user of solar power in Finland. K Group is actively reducing emissions by optimising logistics and reducing energy use in stores, for example. Progress in K Group’s sustainability work will be detailed on the Kesko website and in the annual sustainability report, which is assured by an independent party.

Further information:

Matti Kalervo, Vice President of Corporate Responsibility, tel. +358 105 322 536, matti.kalervo@kesko.fi
Heikki Ala-Seppälä, Group Treasurer, tel. +358 105 322 528, heikki.ala-seppala@kesko.fi
Hanna Jaakkola, Vice President of Investor Relations, tel. +358 40 566 6070, hanna.jaakkola@kesko.fi

Kesko Corporation

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Kesko and K-retailers form K Group, whose sales total €13 billion. K Group is the third largest retail operator in northern Europe and it employs approximately 43,000 people. Kesko operates in the grocery trade, the building and technical trade and the car trade. Its divisions and chains act in close cooperation with retailer entrepreneurs and other partners. Kesko's net sales are €10 billion and it employs approximately 25,000 people. Kesko has some 1,800 stores engaged in chain operations in Finland, Sweden, Norway, Estonia, Latvia, Lithuania, Belarus and Poland. Kesko is a listed company and its shares are listed on Nasdaq Helsinki. The company's domicile and main premises are in Helsinki. Kesko is the world's most sustainable trading sector company (The Global 100 Most Sustainable Corporations in the World). www.kesko.fi