Woolworths green bond flooded with orders as retailer looks to solar, efficiency

Supermarket giant Woolworths Group has raised $400 million from more than 90 investors in the first green bond issued by a big name Australian retailer, in an effort to fund the installation of commercial solar across its rooftops and energy-efficient lighting and fridges inside its stores.

The Climate Bonds Initiative certified green bond was issued by Woolworths last week and closed on Friday more than five times oversubscribed, after being flooded with orders over $2 billion.

As we have reported on RE, the green bond market has been taking off in Australia – and globally – over the past half-decade, as a way of allowing investors to easily prioritise ‘climate-smart’ investments, and for businesses to underwrite renewable energy generation.

Australia’s first green bond came courtesy of National Australia Bank in late 2014, a $150 million issuance aimed at funding a suite of wind and solar energy projects.

Since then, many more have followed, including from all of the other Big Four banks, by state and local governments, and by the federal government via the Clean Energy Finance Corporation.

Just last month, the CEFC tipped $10 million into a $90.9 million green bond issued by FlexiGroup, and designed to support Australia’s nascent home battery storage market, as well as rooftop solar.

In a statement last Wednesday, Woolworths Group CFO David Marr said the company, as Australia’s largest retailer, had a responsibility to lead in the sustainable business space.

“We know the investment community is also looking to support companies committed to sustainability driven projects that minimise environmental impact,” Marr said.

“The issuing of Green Bonds is another step in meeting our environmental commitment, while allowing our investors to support projects that are important to them.”

Sean Kidney, CEO of the Climate Bonds Initiative, applauded Woolworths for issuing what he said was the world’s first Green Bond by a supermarket.

“Purpose driven investors now have a further opportunity to put their money to work in mitigating long term environmental and carbon risks,” Kidney said.

“As a result of Woolworths’ commitment in this space, we have developed a global low-carbon buildings criteria for supermarkets, applicable in multiple jurisdictions.

“We hope their leadership will encourage other companies, both ASX listed and more widely, to invest further in projects and assets that deliver positive environmental and climate outcomes while also contributing to the development of green finance and Green Bond markets.”