Description financing model: Direct Corporate Financing

Direct Corporate Financing refers to capital provided directly to food & agri corporates through instruments like loans or bonds. Sustainable debt is a form of direct corporate financing offered by commercial lenders to corporates with strong credit profiles. These loans are linked to sustainability targets and help fund low-carbon, resilient supply chains

Applicability: Best suited for large borrowers with high credit ratings

Considerations: Scalability improves with appropriate loan discount levels, especially when linked to clear, measurable sustainability KPIs that enhance credibility and impact

Description of de-risking tool(s):

N/A

Case study description: 

In a row of sustainable finance issuances incl. a KPI-linked RCF, short-term commercial paper and bonds, Ahold Delhaize issued Green Bonds of €500M in the capital markets in April 2023 and 2024

1. Ahold Delhaize issued their €500M green bond in the capital markets
2. The proceeds of the Green Bond are mostly allocated to investments focused on scope 1 and 2 emission reduction
   • Green buildings (38% allocated)
   • Energy Efficiency (38% allocated)
   • Pollution Prevention & control (14% allocated)
   • Clean Transportation (8% allocated)
   • Renewable Energy (2% allocated)
3. Ahold Delhaize provides an impact report of their invested green projects
4. Investors are paid back once the bond matures (principal with 5-year maturity), with discounted interest rates (3.4/3.5% annual coupon) linked to sustainable use of proceeds

In 2024, GHG emissions in Ahold Delhaize’s own operations were reduced by 36% compared to 2018