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RaboBank partners with Coles Group to deliver sustainable finance

This week, food and agribusiness banking specialist, RaboBank, has partnered with Coles to help deliver sustainably linked loans (SLL). Coles Group announced on Wednesday its commitment to providing 1.3 billion dollars worth of loans to grow sustainable business. 

Sustainably linked loans

The 1.3 billion worth of loans is part of a larger move by the Coles Group to strengthen its sustainability commitments. 

SLL’s make up a part of Cole’s Full Sustainability Strategy, released in June. The Strategy outlines a roadmap to Coles becoming “Australia’s most sustainable supermarket”. Coles said, “Establishing the SLL further incentivises progress in these sustainability areas that are important to Coles and its stakeholders.” 

Commitment to growing a better world together

For RaboBank, this partnership represents the continuation of a long-standing commitment to fostering sustainable agricultural practice and entrepreneurship. RaboBank has experience in delivering sustainable finance around the world. However, this is the first time they have facilitated sustainable loans in the Australian market.  

Their sustainable finance framework has delivered funding to projects globally. These projects include renewable energy, green real estate, SME, healthcare and care facilities and Covid-19 crisis support to SMEs. 

Rabobank Australia CEO Peter Knoblanche said, “Many of our corporate food and agribusiness clients are developing clear ambitions and committing to long-term sustainability targets. Linking sustainability performance to the cost of capital is a way to support those companies that are meeting their ambitious commitments,

“And now we are very pleased to have acted as sustainability coordinator for the first time in Australia, working closely with Coles Group on its inaugural sustainability-linked loans.

“The strategies of both Coles and Rabobank showcase our joint commitment to growing a better world together.

“The sustainability targets Coles has committed to in this SLL underpin its strong corporate ambitions and goals.” Mr Knoblanche said.

RaboBank says they are committed to helping their clients to find sustainable solutions using financial solutions, networks and knowledge. RaboBank’s CEO Mr Knoblanche believes the Coles Group to be a leader in the market of sustainability strategy. 

Sustainable Finance 

Sustainable finance is a significant and growing financial market. The Australian Sustainable Finance Initiative (ASFI) was launched in 2020. The initiative partnered with Australia’s major banks, superannuation funds, insurance companies, financial sector peak bodies and academia. Together they developed a roadmap to sustainability through funding.  

Since that time, many industry leaders, now including Coles, have followed suit. According to the ASFI, sustainable finance aims to shape an Australian economy that prioritises human well-being, social equity and environmental protection. All while underpinning financial system resilience and stability.   

Coles Chief Financial Officer Leah Weckert said, “Coles believes that sustainable businesses are better businesses, and our Sustainability Linked Loans reflect our commitment to working with all our stakeholders to make positive changes.

“The SLL incentive structure is linked to our progress against company-wide sustainability goals with the delivery of those goals delivering improved cost of capital. It is therefore an effective tool for driving sustainability throughout our business.”

RaboBank is not alone in delivering these loans to consumers. Coles Group has also partnered with ANZ, BNP and Paribas to coordinate transactions.

Read More: Hope for 2021 harvest: Federal Government Ag visas

Read More: What is ‘sustainable’ investing? Buzzword or problem solver?

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Heidi Heck

Heidi Heck

Heidi Heck is a Journalist at Dynamic Business. She is a student at the University of Queensland where she studies Journalism and Economics. Heidi has a passion for the stories of small business, as well as the bigger picture of economics.

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