Pepsi Issues Its First ‘Green Bonds;’ These Align With UN Sustainable Development Goals

October 10, 2019 | ESG and Sustainability, News

Pepsi issued $1 billion in senior notes due 2049, at a coupon of 2.875%, payable semiannually.

This new debt offering is the first of Pepsi’s green bonds.

Pepsi will use the funds raised from the issue for purposes that align with U.N. Sustainable Development Goals or SDGs.

Pepsi announces key sustainability initiatives

According to a statement, the company appointed Simon Lowden as its first Chief Sustainability Officer.

Lowden will lead PepsiCo’s Sustainability Office, including the Global Sustainable Plastics team and Global Sustainable Operations team.

“PepsiCo is deeply committed to using our scale for good and advancing the purpose behind our sustainability agenda: to help build a more sustainable food system,” said Ramon Laguarta, PepsiCo Chairman and CEO.

[Related story: Park Square Capital: Private Credit Investors in Favor of ESG-positive Deals]

Pepsi’s green bonds:  2018 Sustainability Report

The six priority areas as per the Report are agriculture, water, packaging, products, climate, and people. Therefore, the proceeds of the green bonds would be used for the following objectives:

  • “Sustainable Plastics and Packaging” – reduce 35% of virgin plastic content across the beverage portfolio by 2025.
  • “Decarbonization of Operations and Supply Chain” – reduce absolute greenhouse gas emissions across the value chain by 20% by 2030, from a 2015 baseline
  • “Water Sustainability” – replenish 100% of the water consumed in its manufacturing operations and improve its operational water-use efficiency by 2025

[ Related Story: U.N.’s Interim Report on Harnessing Digitalization in Financing of Sustainable Development Goals (SDGs) ]

Globally, green bonds are in huge demand

Globally, new issues of green bonds this year could touch US$250 billion, up 20% from a year ago. Moreover, the type of green bond issuers now extends from “super sovereigns,” like the World Bank or Asian Development Bank, to corporations such as utilities, energy companies, automakers, even banks.  Among corporates, Apple has so far issued $2.5 billion in green bonds over time.

Moreover, currently, green bonds are in high demand across the world. “Investors are saying give me more, give me more,” said Sean Kidney, chief executive officer of the Climate Bonds Initiative in an interview. “There’s just not enough product.”

[Related Story:  MUFG First in Japan to Issue Aussie Dollar-Denominated Green Bonds]

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